Sunday, 11 March 2012

Bob wants a sandwich

Bob Diamond. We'd have to event if he didn't exist wouldn't we? Somehow he has come to epitomize everything we don't like about the banking sector, and his pay packet provides the kind of enjoyable outrage usually only to be found by reading the Daily Mail.

The figures out over the last couple of days shouldn't surprise anyone who has been paying attention too much. The head of a big public company will earn a lot of money, and if that company is in the financial sector you can expect it to be bigger still.

But let's listen to the voices of moderation. Yes it's a lot of money, but these are rare cases, most people in banking don't earn a lot. Also, human capital is highly prized in the banking sector - one individual can make a massive difference, so you have to pay the going rate for the talent. And actually, when you look at the benefit delivered by Bob Diamond's stewardship of Barclays, it's a relatively small cost to pay, isn't it?

These are all valid points, so let's push it a bit wider. If Bob Diamond wants Barclays to give him a pony (the animal, not £25), surely this is a no-brainer. Cost-wise the impact is much smaller than a bonus or share-based incentive. They should just agree, and shareholders should back the decision. Similarly, if he asked for a day out at Alton Towers with six friends, the bank might even want to consider hiring the whole venue for the day (because I bet Bob hates having to queue for anything).

But what if Bob asked the CIO at one of his leading investors, a UK institution, to make him a sandwich, right now? Nothing fancy, but he wants a salad garnish and some crisps laid our fan-style. Surely if it's a choice between this and Bob leaving Barclays, even the UK, it must happen? OK, it's a power trip, and an embarrassing request to fulfill, but think about all the value he will generate. And really what's the big difference between that and him asking you to pay his tax bill for him?

The thing is you can make a fuss about this if you want, but whilst that might make you feel better now, in the long term you'll lose out because Bob will leave, taking that tax revenue with him. We need to show that the UK is open for business, rather than sending out the signal that aspiration will be punished.

So just belt up and make Bob's sandwich will you?

No comments: