Bob Diamond has been an outspoken defender of bankers' rights to enjoy fat bonuses, but the Barclays (NYSE: BCS) CEO has been forced to back down this week following the widespread criticism of his 2011 bonus, due to be voted on at next week's AGM.

Diamond was due to be given 2.7 million pounds' worth of shares in stages over the next three years. A performance condition has now been added onto half of this bonus, requiring Barclays to generate a return on equity exceeding its cost of equity. Should it fail to do this within three years, Diamond will lose half of his bonus, as will his CFO, Chris Lucas.

Given that Diamond's take-home pay was 25 million pounds in 2011, this doesn't seem an overly harsh condition to agree to. Indeed, given that Barclays' return on equity was 6.6% in 2011 and its cost of equity was 11.5%, you wonder whether he should be getting a bonus at all.

Dividend commitment
Barclays also made a second, and perhaps more important, concession in its statement on Wednesday, saying, "Barclays is 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."

This translates as a commitment to increase dividends, and it is of far more direct relevance to Barclays' shareholders than the size of Bob Diamond's bonus.

Are shareholders happy?
This protest has been led by insurer Standard Life (LSE: SL.L), which owns 2% of Barclays. Following the release of Barclays' statement yesterday, it instantly capitulated and promised to vote in favor of the remuneration report. This left me wondering whether the real target of its protest was the commitment to increase dividends.

However, the Association of British Insurers, whose members control 20% of the shares on the stock market, is less happy and has maintained its "amber top" rating on Barclays -- its second-highest warning, signifying possible breaches of corporate governance codes.

The ABI is particularly unhappy about the 5.75 million pound "tax equalisation payment" received by Diamond last year to prevent him from having to pay the tax consequences of his move from New York to London.

More banker-bashing
Barclays' climb-down under shareholder pressure is the latest in a series of concessions made by bankers on both sides of the Atlantic. Earlier this week, 55% of Citigroup (NYSE: C) shareholders voted against CEO Vikram Pandit's proposed $15 million bonus.

Goldman Sachs (NYSE: GS) is also coming under pressure from major institutional investor Sequoia Fund, which is unhappy about the pending re-election of James A. Johnson, the director in charge of Goldman's remuneration committee. Johnson is the former CEO of bailed-out U.S. mortgage lender Fannie Mae and has a reputation for backing overly generous pay packages.

In the UK, the biggest shareholder in RBS -- the government -- put enough pressure on its CEO, Stephen Hester, to persuade him to turn down his bonus earlier this year. Lloyds Banking Group was also moved to claw back some of its past bonuses as a result of the payment-protection insurance scandal.

A sign of things to come?
It's very hard for even a determined group of small shareholders to achieve any kind of change in corporate governance. In most cases, investors like you and I have two realistic choices: put up or sell up! We can only hope that institutional investors continue to find their voices and stand up for their interests -- and ours.