Bob Diamond has promised higher dividends and pledged to forgo parts of his bonus for 2011 until Barclays has improved profitability, in a last-minute attempt by the bank’s chief executive to fend off an investor rebellion over his pay package.

Barclays has come under pressure from many of its largest investors after it revealed that Mr Diamond’s take-home pay was £25 million for last year, including a £5.75 million payment to compensate him for a tax disadvantage while relocating from the US to Britain.

Investors had threatened to vote against the remuneration report and against directors on the remuneration committee at the annual general meeting next week as a protest against rising payouts to executives.

Mr Diamond and Chris Lucas, Barclays’ chief financial officer, yesterday promised to give up half of their deferred share bonuses if the bank’s return on equity does not exceed its cost of equity within three years of share payment coming due. – Copyright The Financial Times Limited 2012