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Exclusive: Fight Over £18m Diamond Bonuses

(c) Sky News 2012

I have learned that Barclays (LSE: BARC.L - news) directors are to ask Bob Diamond to waive about £20m in bonuses, paving the way for a battle that threatens to revive echoes of the row over Fred Goodwin's exit from Royal Bank of Scotland (LSE: RBS.L - news) (RBS).

I have it on unimpeachable authority from top Barclays shareholders that Alison Carnwath, chairman of Barclays' remuneration committee, will ask Diamond to forfeit his right to all previously-unvested share options that could accrue to him as a consequence of his resignation.

Investors tell me that Carnwath is due to hold discussions with fellow board members and with Diamond in the coming days to finalise the plans. Barclays said today that the chief executive’s payoff was not yet settled.

In total, there are about £18m-worth of share awards made to Diamond in previous years that had not vested prior to his resignation although to be clear, the value of the awards that he could be asked to waive could yet change depending upon some of the conditions attached to them.

Carnwath could not be reached for comment, but I'm told by investors that she will "fight tooth and nail" to restrict Diamond’s payoff.

Diamond’s contract states that he is entitled to a year’s salary as a payoff in certain circumstances (including the ones in which he stunned the City by quitting today). His basic pay for 2012 is £1.35m and I suspect that most shareholders would just about swallow him being paid off with that amount.

The controversy will relate to the share options that Diamond has been awarded in previous years, which have not yet vested but which will do so during his notice period. I'll list them here:

In 2011, Diamond was awarded a deferred share annual bonus worth £2.7m and a long-term incentive award, payable in shares after three years, of £2.25m.

In 2010, he was awarded a £6.5m annual bonus, all of which was payable in shares and £4.7m of which was deferred for three years. Diamond was also given a £2.25m long-term incentive award contingent on future performance.

In 2009, Diamond, who at the time ran Barclays Capital, the group’s investment bank, waived his annual bonus but was handed a deferred share award of £6m.

To be clear, some of these payments were in any event subject to performance conditions and to clawback before Diamond could actually cash them in.

The opinion of one major shareholder I've spoken to sums up the mood:

"If Bob doesn’t like it, he should sue."

I reported yesterday that Barclays directors and shareholders were keen for Diamond to repay some of the bonuses he earned during the period of LIBOR-rigging, but that request would only have been viable if Diamond had remained an employee of the bank.

The Barclays board will be under enormous pressure to limit Diamond's payoff and given the scandal that has engulfed the bank, it would be surprising if Diamond continued to feel entitled to receive those share options whose vesting was only triggered by his sudden exit.

If he does insist on his entitlement to those share options, it's safe to say he risks the same kind of public and political opprobrium which Fred Goodwin experienced over his pension pot when he was ousted from RBS in 2008.