The current head of the investment arm of Barclays bank, Bob Diamond, is to be become the chief executive of the whole firm, earning a whopping annual salary of £1.35 million.

However, bonus payments and other long term incentives could top up his yearly income to £11.5 million a year.

The American banker will replace John Varley next year but experts are warning that his salary figure could lead to controversy.

Robert Peston, BBC business editor, said: “At a time when the economy remains weak, this package is likely to spark widespread criticism”.

Nevertheless, Mr Peston agreed with the choice to appoint Mr Diamond in the lofty position and cited his successful work at Barclays Capital as the reason behind it.

The bank said Mr Diamond’s “compensation arrangements have been benchmarked against a peer group of global universal banks, industrial companies and financial services institutions,” in an explanation of how the high salary figure was calculated.

The 59 year old banker has worked for Barclays for the past 14 years and said of the promotion: “I am honoured by the board’s confidence in me and greatly motivated by the challenge of leading Barclays during the critical period ahead”.

He added: “As a leading global universal bank, Barclays has the right model, the right strategy and above all the right people to deliver for all our stakeholders”.

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