Barclays owns up on BZW pay

Head of former investment banking subsidiary did receive pounds 5m for 13 months' work

BARCLAYS, which sold its investment bank BZW last year, will reveal on Wednesday that it paid Bill Harrison, the former BZW chief executive, about pounds 5m during his 13-month tenure.

The bank's 1997 annual report will show Mr Harrison made a salary of about pounds 1m in nine months last year, according to a source familiar with the remuneration package. However, it will also show that he did not receive a pounds 5m departure bonus, as has been rumoured.

Barclays decided last October to sell BZW because it could not justify the capital expenditure it needed to compete with global businesses being created by mergers, such as Salomon Smith Barney.

Mr Harrison, who joined in September 1996, resigned when the announcement was made and has since become vice-chairman of Deutsche Morgan Grenfell at what is described by Deutsche as a much lower package.

"The pounds 5m figure that has been quoted in some papers is almost on the button if it describes what he received for joining, working here and for leaving," said the source.

Mr Harrison's pay outraged shareholders at last year's annual general meeting. It also raised eyebrows in the City, where Mr Harrison is known as "Atilla the Brum" because of his rough management style and Birmingham accent.

The pounds 5m in earnings breaks down as: pounds 2.85m in salary and bonuses in 1996; pounds 150,000 in an executive share award scheme from 1996; about pounds 1m worth of options awarded in 1996, assuming the share price is about pounds 17; and about pounds 1m in salary and benefits in 1997.

Barclays previously said the pounds 2.85m it paid Mr Harrison in the last four months of 1996 comprised pounds 100,000 in salary, pounds 1.5m in benefits and pounds 1.25m in cash bonuses.

Martin Taylor, Barclays chief executive, has said the bonuses were designed to compensate Mr Harrison for those he lost by leaving his former job with Robert Fleming.

The 1996 annual report shows Mr Harrison was awarded 133,000 options that can be exercised at pounds 9.07 each, although it did not state their value. The source said they are worth pounds 1m at a share price of pounds 17. The shares stood at pounds 16.18 on 31 December and closed on Friday at pounds 18.36.

Mr Taylor hired Mr Harrison, 49, to build BZW into a global investment bank, impressed by his reputation for driving employees and shaking up organisations.

In the weeks after Mr Harrison joined, the former deputy chief executive, Donald Brydon, resigned, and entire teams of bankers were dismissed to make way for new ones hired from rivals.

Mr Harrison was lured away from Robert Fleming, where he was head of investment banking. Before joining Robert Fleming in 1993, he had spent eight years at Lehman Brothers.