Open Cloze

Gap-fill exercise

Fill in all the gaps, then press "Check" to check your answers.
Lawyers In Barclays Bonus Battle

Investors in Barclays have warned that the bank a battle to fully withhold bonuses owed to Bob Diamond and Jerry del Missier, the two top executives quit the bank last week.

I understand lawyers acting Barclays have informed directors that the contracts of the former executive and chief operating officer are likely to enable them to walk with significant chunks of their bonuses the bank being fined £290m attempting to rig the interbank borrowing rate Libor 10 days .

It is partly for that that - as I disclosed last week - Alison Carnwath, the non-executive director chairs the Barclays remuneration committee, is understood to asked Mr Diamond to voluntarily waive approximately £18m deferred long-term and annual share awards triggered his resignation.

"Bob built Barclays' investment bank a world leader and that’s one factor being taken into by the lawyers," a source to the Barclays board told me. "A contract is a contract."

I'm told that the prospect withholding and clawing back elements of Mr del Missier's past bonuses is likely because of his involvement the instruction to Barclays employees to lower the bank's Libor submissions the strife-torn autumn of 2008.

Barclays have a clawback provision in the contracts of a large number of senior executives - who are judged to be 'code staff' by the City regulator - which it inevitable that the bank will be able to demonstrate that it effectively cancelled tens of millions of pounds bonuses even if it does not succeed restricting Mr Diamond's payoff to the contractual minimum.

Sir Michael Rake, the deputy chairman and favourite to the helm, briefed shareholders to expect a wide-ranging clawback effort a meeting on Thursday.

The 2011 Barclays annual report, published earlier this year, states: "Events that may lead clawback include employee misconduct, harm Barclays reputation, material restatement of Barclays financial statements, a material failure risk management or a significant deterioration the financial health of Barclays. Awards may be suspended where an employee is investigation for a regulatory or disciplinary ."

It's clear the events of the last ten days that many of these 'events' occurred, and I'm told that Marcus Agius, the chairman, wants to able to provide more detail the clawback plans when he appears the Treasury Select Committee on Tuesday.

In other developments relating the crisis Barclays, I've learnt that:

- easyJet, the budget airline, preparing to elevate Charles Gurassa, its deputy chairman, to top job if Sir Michael way to take the Barclays chairmanship.

- Sir Michael has told investors he will only agree to replace Marcus Agius as Barclays' chairman if he has the support of investors, regulators and senior politicians, I suspect that the endorsement of leading political figures will count little if other mis-selling scandals emerge after Sir Michael is installed the post.

- Barclays directors will early next week sift a list of names of potential candidates to head an independent inquiry the business practices and culture of bank. Contenders will include Sir David Walker, the author of a report bank governance reform; Sir Richard Lambert, former head of the CBI; Anthony Salz, respected City lawyer; and Lord Davies, former trade minister.

- BT is likely to begin searching a new chairman within weeks if Sir Michael looks likely to the Barclays role although he would not step from the telecoms group’s board until his replacement joined.

- The brief for Mr Diamond’s successor Barclays' chief executive will entail identifying a candidate who has a strong relationship with US and UK financial regulators.

Barclays was unavailable comment.


Adapted from: Sky News, July 7, 2012.