Rich Ricci, Jerry del Missier and Bob Diamond took home paychecks of $15 million or more from Barclays bank last year, continuing a tradition of excessive pay in the UK. Bob Diamond, the CEO, made just shy of $28 million (£17.7 million), while Jerry del Missier and Rich Ricci, co-heads of Barclays Capital, made $17 million (£10.8 million) and $15 million (£9.7 million), respectively.

Of course this pales compared to what U.S. hedge fund managers make  - Raymond Dalio of Bridgewater Associates was paid an estimated $3 billion in 2011, Carl Icahn of Icahn Capital Management earned $2 billion. The top European hedge fund manager in 2011 was Alan Howard of Brevan Howard Asset Management, who earned $400 million last year. All told, the 40 highest paid hedge fund managers were paid a combined $13.2 billion in 2011, according to a Forbes magazine survey.

Such pay-outs make Goldman Sach’s vice president Greg Smith’s estimated salary of $500,000 look like pocket change.

The UK salaries have become public knowledge because of a pact made by the banking sector with the UK government, as part of Project Merlin signed in February 2011. The plan – named after the fictional wizard – was intended to boost bank lending for small businesses. The project has been a failure so far with lending falling every quarter instead.

Yet Project Merlin has been successful in revealing how well bankers are paid, often despite doing very badly for investors, he most scandalous revelation so far comes from the Royal Bank of Scotland (RBS), which received $70 billion (£45 billion) of taxpayer funds. Despite the fact that the loss-making bank is now effectively 83 percent state owned, RBS handed out shares worth almost $44 million (£28 million) to nine of its top executives in 2010. All told it paid out nearly $1.5 billion (nearly £1 billion) to its senior employees – even as it reported losses of $1.7 million (£1.1 billion) for 2010 and slashed pension payments to its employees.

Shareholders protested at the RBS annual meeting last April. "You should not be paying yourselves anything until the debt is paid off to the government and to the people," said one attendee, characterising the pay scales as "really obscene to the degree of greed and corporate theft."

And it's not just the average citizen who thinks salary levels are excessive. Three out of four financial workers in the City of London who responded to a survey by St Paul's Institute thought the wealth divide was too big.

In 2010, five of Barclays top managers also shared a payout of £110 million. That year, the bank's top two earners were also Jerry del Missier and Rich Ricci , who made over $15 million each last year. It needs to be noted that Ricci, del Missier and Diamond are not the highest paid people at Barclays. That distinction goes to company traders, whose salaries do not have to be revealed under UK rules (as opposed to bankers).

Perhaps one of the most curious facts to emerge from the banker’s pay scandals in the UK are the fact that some of the bankers are employed and paid outside the banks themselves. For example Stuart Gulliver, HSBC's highest paid banker, is not employed by the bank's main holding company despite taking over as chief executive but by a Dutch-based company called HSBC Asia Holdings. Part of his salary is paid into a Jersey-based defined contribution scheme called Trailblazer. And Bob Diamond, chief executive of Barclays, is seconded to the bank from a Delaware subsidiary known as Gracechurch.

The banks say that there is no tax benefit to the arrangement.

Barclays Bankers Bonanza

Executive pay is a hot topic, but one of ANZ's most senior executives says he is mystified that Australians love hearing about the millions paid to athletes and movie stars, but slam the remuneration of corporate leaders.

''We seem happy and even proud when our sports people make it onto the list of the top 20 paid people, or similarly when our entertainers make it on Hollywood's best-paid list,'' ANZ Australia chief executive Phil Chronican told an American Chamber of Commerce in Australia lunch yesterday.

''Yet for some reason when people are managing large complex businesses it is seen as excessive.''

Mr Chronican said the issue was not whether an executive was paid $1 million, $3 million, $5 million or more, but why.

''Just like sports people and entertainers, senior executives' careers do come to an abrupt end,'' he said.

Mr Chronican said the disclosure of the salaries of executives of listed companies was important for transparency.

''Maybe we should look to extend the disclosure to other groups who are in positions of power in their community, including those who are managing public superannuation savings.''

While acknowledging that for most Australians, "any level of executive pay looks high, even stratospheric", Mr Chronican, who earned a combined $2.2 million in compensation in 2011, said that the real issue was how big were the risks that bankers were hired to manage. "What returns do they earn shareholders? How do they serve customers? Are they good employers?"

In a wide-ranging speech, Mr Chronican, who oversees ANZ's domestic operations, said many Australians were not feeling the benefit of the mining boom, which had contributed to the change in consumer activity in recent years.

"Despite our strong economy, many Australians feel worried about our prospects in the face of uncertainty in Europe and many, particularly outside the fast lane of the mining and resource sector, feel they're not seeing the benefits," he said.

Although Australia continued to grow thanks to Asian demand for resources, the country was undergoing "a period of quite painful structural change", he said. Bank growth would be hit by slowing business and household credit demand, which remained at a 30-year low, while household savings were at a 30-year high.

The rising cost of banking would reduce shareholder returns from banks in the future, he said.

"Banking is going to be more expensive due to the higher costs of funds and higher regulatory requirements," he said.

Mr Chronican also noted an anomaly in overseas views of Australia and its real estate market.

"Overseas investors have a very odd set of views about Australian property prices," he said.

"They on one hand look at the stability and take a lot of comfort from it. The other is they cannot believe Australia was able to not have a property price collapse," Mr Chronican said.

ANZ Chief Mystified Over Anger At Executives' High Pay

Poor Phil Chronican just doesn’t get it.

What Phil & his ilk don’t understand is that a good many people are just as disgusted that a 16 year-old tennis player or the world’s dumbest ‘air-head’ celebrities can pull-down multi-million dollar payments, as they are at the exorbitant ‘rewards’ often received by our corporate high-flyers.

When I started my career some 40 odd years ago, the ‘rule of thumb’ that applied to executive rewards was that the CEO/Managing Director of an enterprise was never paid more than 12 times the level of pay received by the lowest-paid person in the enterprise. Where has that ratio gone?

Moreover, whilst the remuneration paid to some executives is clearly obscene, shareholder & community anger & resentment more often than not arises in situations or circumstances where the recipient has clearly failed to achieve their objectives whilst, more often than not, they have also destroyed significant shareholder value & many people’s lives in the process.

But I don’t blame Phil. The problem of excessive or unjustified remuneration exists only because of complacent shareholders who will not control their company boards or, in the case of some companies, largely controlled by institutions, the fact that there is an exclusive conclave of directors who network to serve their own interests ahead of those of the organisation.

Barclays is scrambling to head off a damaging revolt over the £17m pay package awarded to its chief executive Bob Diamond by changing the terms of his bonus for last year - just days before a crucial shareholder vote.

In an unscheduled announcement to the stock market that demonstrated its level of anxiety about a potential shareholder rebellion at next Friday's annual meeting, the bank also pledged to bolster dividends to try to address investors' concerns that it paid £2.1bn in bonuses last year - more than three times the £700m used to pay shareholders' dividends.

The surprise move came after the bank embarked on urgent canvassing of major investors earlier this week, asking them what could be done to limit the dissent prompted by Diamond's £2.7m bonus. There has also been investor anger over the decision to pay a £5.7m tax bill Diamond incurred when moving back to the UK from the US to become chief executive, after more than a decade running the investment bank Barclays Capital.

The bank will now more closely link Diamond's bonus to return on equity, which is the bank's net income after tax divided by shareholder equity. Diamond's return-on-equity target is 13% - well above the 6.6% achieved for 2011, a figure he described as "unacceptable".

Diamond will have half of his £2.7m share award for 2011 linked to the return on equity in three years' time. Only if the bank's return on equity is greater than its cost of equity (11.5%) will he take that half of the bonus. The same will apply to the £1.8m bonus awarded to finance director Chris Lucas. Until now, neither bonus had any performance criteria attached and would have been released, in shares, to both directors in three years' time.

The bank immediately won round Standard Life, which owns 2% of Barclays shares. Guy Jubb, the investor's head of corporate governance, said: "We now intend to support the remuneration report at next week's AGM."

However, it was far from clear that other investors had been convinced so easily and Barclays could face a tense week while shareholders lodge their votes not only for the remuneration report but also for the re-election of Alison Carnwath, the non-executive who chairs the remuneration committee. "Some are tempted to shift but most are not," one shareholder said. "It's a bit late to be doing this if the company thinks this is such a good idea - and also it does not address the fundamental issues on pay."

Investor advisory body Pirc kept its recommendation to vote against the remuneration report and Carnwath's re-election, arguing there should have been no bonus at all given the bank's performance. David Paterson, head of corporate governance at the influential National Association of Pension Funds, said it was a "positive step" but called on Barclays to "engage with shareholders after the AGM in order to address the fundamental concerns which many have about the structure of executive pay".

The Association of British Insurers, whose members control a fifth of shares on the stock market, declined to comment on the changes. Last week it issued an "amber top" alert to its members, highlighting its concerns about the bonuses of Diamond and Lucas. The ABI had previously pointed out that it was "business as usual" at the bank as the amount of revenues it had used to fund bonuses at Barclays Capital had remained static at 35% even though the bank had insisted bonuses were down 25% on the year.

The bank appeared to attempt to address this, saying that it was "fully committed to ensuring that a greater proportion of income and profits flow to shareholders notwithstanding that it operates within the constraints of a competitive market".

Barclays added that it had made no changes to the tax arrangements.

Lib Dem peer Lord Oakeshott said: "This shouldn't be enough to let them off the hook. What really sticks in the throat of taxpayers and investors is the blank cheque to cover his tax bills after his move from New York to London."

The changes followed week of shareholder meetings led by chairman Marcus Agius and were "recognising the strength of opinion expressed by some shareholders, via those meetings, and the executive directors' confidence in the future performance of the bank", Barclays said.

Sticking to its target for a 13% return on equity, the bank said: "Achieving this target of 13% return on equity will allow the portion of post-tax profits that are distributed as dividends to normalise at a level much higher than today, and Barclays intends to continue to make steady progress towards that as the return on equity improves. The combination of higher earnings and a higher dividend payout ratio will allow a significant increase in the absolute level of dividends received by shareholders".

Barclays Chief Bob Diamond Links Part Of Bonus To Improved Performance | Business

At some point in the future, historians will look back at this era as the time when America basically lost its collective mind.

The latest example is Ted Kelly, the recently retired chief executive officer of Boston's Liberty Mutual insurance company. Ask any official or business person across the state, and they'll sing Ted Kelly's praises: good guy, insanely smart, devoted to the common cause, all of that manifest in that Liberty Mutual grew at breakneck speed under his leadership and gave millions of dollars away.

There's something else, though, that came out this week. Mr Kelly had an annual compensation package of $US50 million for the past four years. Yes, there's a zero after the 5. That's just shy of a million dollars a week, $192,000 per working day, $24,000 an hour. To run an insurance company.

It calls to mind an anecdote in an award-winning Washington Post series last year. A newly promoted chief executive of Dean Foods got a pay package in the 1970s equal to $US1 million in current dollars, plus a Cadillac. He moved from a three-bedroom house into a four and joined the local country club. He declined future raises because he thought it would be bad for company morale.

It's not apparent that Mr Kelly had those same reservations. As a result, every Liberty Mutual policyholder, all those regular people making ends meet at kitchen tables, have paid for Mr Kelly to take $200 million out of the company, their company, over the past four years.

Every Massachusetts taxpayer is footing part of his salary, given that the state granted Kelly's company a $46.5 million tax break for a new headquarters in Boston. The whole thing is grotesque.

This is not a screed against the rich. There are precious few people who don't want to be part of that group. But there should be at least some rhyme or reason to who makes what. You're an entrepreneur, inventor, someone who founded a business taking enormous risk, you deserve what the open market will pay.

It's why there's admiration (and envy) rather than ill-will for the techie who made $400 million from the sale of Instagram. But $50 million to be an insurance executive, albeit a very good one? Was there no one else on the planet who could do it nearly as well for $10 million?

These boards, of course, are the real problem. Mr Kelly revealed this week that the Liberty Mutual directors are paid $200,000 a year, a figure never previously reported.

Enter NStar chief executive Tom May, a marquee character in the serial of overpaid executives. Mr May sits on the Liberty Mutual board, helping to set Mr Kelly's salary.

Meantime, a key Liberty Mutual official sits on the NStar board, which recently hiked Mr May's pay from $7.9 million to $9.2 million.

This isn't fair market value; it's a rigged game: executives hurling bundles of money at each other, then using the raises as benchmarks. Is there a synonym here for grotesque?

Corporate profits set a post World War II record last year, but workers' pay fell 2 per cent. Chieftains are swimming in millions while unemployment is historically high. We're in an era of princes and paupers, mansions and minions, with income inequality in the US rivalling developing countries such as Uganda and Cameroon and tax policies that favour the ueber-rich.

This article was first published at the Sydney Morning Herald