LONDON BRIEFING: AS HOME to the popular Philharmonia Orchestra, the Royal Festival Hall on London's South Bank is one of the capital's favourite music venues.

But the scenes to be played out in the 2,500-capacity auditorium in a couple of days’ time will be anything but harmonious, as Barclays and its chief executive Bob Diamond face a shareholder revolt over pay.

Anger over excessive rewards for bankers, or indeed any lavishly rewarded corporate executive, is not a new phenomenon. And it’s something Barclays is familiar with, having suffered a 10 per cent protest vote against its remuneration report at last year’s annual meeting.

This year, however, that protest vote is expected to spiral to 15 per cent, or perhaps even as high as 20 per cent, as investors register their disapproval of the bank’s pay structures, notably the £17 million pay and bonus package enjoyed by “Diamond Bob,” already one of the world’s richest bankers.

Anger among institutional investors has been growing in recent weeks, fuelled by the revelation that Barclays – in other words, its shareholders – have picked up the tab for £5.7 million tax owed by its chief executive as a consequence of his move to London last year from New York, where he formerly ran Barclays’ investment banking arm.

The so-called “tax equalisation payments” were detailed in a contract between Diamond and Gracechurch Services Corporation, a Delaware-based subsidiary of Barclays.

Shareholders, however, only became aware of the arrangement relatively recently, heightening suspicions that Barclays was using the complexity of its pay structures to keep them in the dark. Certainly, many feel that the bank was less than upfront about the matter.

Barclays looks to have been taken by surprise by the extent of the potential revolt and was certainly spooked enough last week to make major concessions on Diamond’s £2.7 million bonus. As a result, half of the shares bonus awarded for 2011 will not now be paid unless the bank meets certain return on equity targets in three years’ time.

That still leaves the question of whether he should be paid a bonus at all – and the controversial £5.7 million tax payment.

Although Barclays dressed up last week’s unscheduled announcement as a “pre-agm update” it’s clear that, faced with a sizeable shareholder uprising, the bank blinked first. And the bonus concession was enough to win some shareholders over – Standard Life, for example, said it would withdraw its opposition to the remuneration report at Friday’s annual meeting.

Others remain disgruntled - and Diamond is not the only target of their ire. Some are gunning for non-executive director Alison Carnwath, the veteran investment banker who chairs Barclays’ remuneration committee. PIRC, the shareholder activist group, is advising investors to vote against Carnwath’s reappointment, holding her responsible for bonuses being awarded in the first place. Whether the protest vote comes out at 15 per cent or 20per cent, it won’t claw any more money back for Barclays shareholders, not for 2011, at least. But it should make the board, and the remuneration committee, think long and hard when they put together executive entitlements for 2012.

Barclays is not the only bank subject to mounting shareholder pressure - in the United States shareholders in Citigroup emphatically rejected chief executive Vikram Pandit’s $15 million pay package earlier this month.

And in Germany, Deutsche Bank (which went as far as denying shareholders a vote on the remuneration report for last year) is facing a protest on pay policies from an activist investor group led by the UK fund manager, Hermes.

Barclays’ remuneration report will be voted through, and it will be fascinating to watch Diamond’s performance – who can forget his appearance before MPs at Westminster last year, recalling his less-than-privileged youth as one of nine children, which taught him that if he wanted a new bike, he’d have to buy it himself?

But the whole episode is a serious embarrassment for the bank that likes to tout its “citizenship” credentials. Tomorrow ) Barclays will publish its 2011 Citizenship Report, detailing its environmental and social performance over the year. That report sits uneasily against Diamond’s £17 million pay package and the bank’s energetic tax avoidance operations.

At the same time, Barclays will report first quarter profits expected to be in the region of £2 billion, up from £1.66 billion, which the board no doubt hopes will put some investors in a better frame of mind.

Fiona Walsh writes for the Guardian newspaper in London