Patience pays as Diamond grabs top Barclays job

By Steve Slater

LONDON (BestGrowthStock) – After 14 years at Barclays

building up its investment bank into a Wall Street power, Bob Diamond will have no fear that the last American chief executive at the bank lasted just a day in the job.

Six years after previously missing out on the top job, Robert E. Diamond — universally known as Bob — was on Tuesday named as the British group’s new chief executive.

He will take over from John Varley at the end of March, after a six-month handover period.

The affable and charismatic Diamond, who at 59 is five years older than Varley, is one of Europe’s best paid bankers and a lightning rod for criticism in Britain of the industry’s big pay awards.

That was one reason why the Concord, Massachusetts-born son of two teachers might be happy to have spent much of his time in the last two years in New York instead of London.

The power base of Barclays Capital shifted to New York after the opportunistic takeover of the U.S. operations of Lehman Brothers two years ago. That transformed BarCap, giving it the equities and advisory firepower for Diamond’s ambition to take on Wall Street powerhouses such as Goldman Sachs.

But Diamond will return to London as chief executive, giving the avid sports fan and former football linebacker more opportunities to watch London soccer team Chelsea instead of his beloved Boston Red Sox, Celtics and New England Patriot teams.

He often draws parallels between sports and business, and says he runs a meritocracy and rewards success, touring the dealing room and talking to the players.


Returning to London will also put Diamond back in the line of fire over his pay.

Diamond has not taken a bonus in the last two years, but was paid 21 million pounds in 2007 and received 26 million pounds last year after the sale of asset management arm BGI and owns Barclays shares worth 30 million pounds. Earlier this year the then senior government minister Peter Mandelson branded him the “unacceptable face” of banking.

But Diamond remains an Anglophile. After sealing the Lehman deal, he is reported to have played “God Save the Queen” over the tannoy of the bank’s trading floor.

He told reporters on Tuesday he was honored to get the top post. “The opportunity for anyone to be CEO of Barclays, with its 300 years of history, in the environment we work in today is tremendously motivating and challenging.”

The only other American to take the helm at Barclays was Mike O’Neill, a little known former U.S. Marine who was named CEO in February 1999. O’Neill’s lucrative pay packet was criticized at the time but a health scare meant he only attended the office for one day to unravel his contract.

Diamond has been the public face of BarCap since joining in 1996 and is credited with reviving it from the ashes of Barclays de Zoete Wedd (BZW) soon after arriving.

He became an investment banker almost by accident, only entering banking after two years as a lecturer in business at the University of Connecticut.

Both his parents were teachers and he retains close links to education through charities — his Diamond Family Foundation supports Colby college in Maine.

After being attracted to bond trading he joined Morgan Stanley and moved up the ranks during 13 years there. Four years followed at Credit Suisse First Boston (CSFB), which he left to join Barclays in 1996, reportedly after a row over his 1995 bonus, to become head of BZW’s Global Markets Division at a time when BZW was struggling to compete as a full-service investment bank.

A year later Diamond took over at the top of Barclays Capital, the renamed rump of BZW after the decision was taken to dispose of its equities and mergers and acquisitions (M&A) departments and concentrate instead on building up its debt markets and foreign exchange business.

Initially Diamond joined BZW on a two-year contract said to be worth at least 5 million pounds ($8 million) plus perks to make him one of Barclays’ highest paid executives and immediately set about building a new team with the help of a cheque book described at the time by one market commentator as “so large it had to be delivered via parcel post.”

Twelve years later Barclays was sufficiently confident of Diamond’s capabilities to buy at a knock-down price the U.S. business of Lehman Brothers, returning the group to equities and M&A work.

That made BarCap a “top tier” investment bank, and Diamond told Reuters on Tuesday group strategy will continue along the path it is already on.

“You’re going to see a more balanced group but a group that is like the Barclays of today — that’s a very well respected global universal bank. I think the biggest challenge is around execution, not strategy,” he said.

After missing out to Varley for the top job at Barclays in 2003 he was linked with other top bank jobs but stayed with the British bank despite persistent media speculation that he did not get on with Varley.

“We have a great relationship and I’m wondering what you guys are going to do after April when you can no longer ask how John and Bob are getting along,” Diamond said.

($1=.6507 pounds)

Patience pays as Diamond grabs top Barclays job