Barclays bonuses could spark revolt

Barclays sparked controversy over proposed bonus packages for executives including chief executive Bob Diamond.

Paul Mumford, senior investment manager at Cavendish Asset Management, says: “A lot of the criticism over executive pay levels stems from the feeling that high levels of remuneration are awarded regardless of performance, which is a legitimate concern.

“However in this particular case we should remember that Barclays has actually put in quite a decent showing over the last few years. (article continues below)

“It avoided the quagmire of state rescue and its profits yesterday were very reasonable.”

Mumford says the argument remains for remuneration of workers to be alligned interests of shareholders.

He adds: “The problem with sky-high pay deals at the top is that they can run the risk of incentivising short-term risk taking over a few years, rather than long-term business building over the span of decades.

“Payment in shares can be a good way of aligning interests, but even this can become excessive and have the reverse effect.  The key here is moderation, as with much in the world of finance”