Barclays 2010 Annual Report Download - page 175

Table 7: Pension provision and other benefits
Accrued
pension
at 31st
December
2009
£000
Pension
accrued
during 2010
(including
increase for
inflation)
£000
Pension
accrued
during
2010
(excluding
inflation)
£000
Accrued
pension
at 31st
December
2010
£000
Transfer
value of
accrued
pension
at 31st
December
2009
£000
Transfer
value of
accrued
pension
at 31st
December
2010
£000
Increase
in transfer
value during
2010
£000
2010
cash in
lieu of
pension
£000
Age at 31st
December
2010
Completed
years of
service
John Varley 54 28 619 26 (5) 645 17,015 18,256 1,241 206
Robert E Diamond Jr 59 14 58 5 2 63 383 473 90 –
Chris Lucas 50 3 – ––––– – 191
* Sub-total calculated in accordance with Schedule 8 of the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008 (total of base salary,
annual performance incentive (cash), annual performance incentive (shares), pension cash
allowance and other benefits)
Other
benefits
2010
£000
Other
benefits
2009
£000
Sub-total*
2010
£000
Sub-total*
2009
£000
John Varley 54 23 2,460 1,123
Robert E Diamond Jr 268 134 2,318 384
Chris Lucas 25 19 1,699 832
Mr Lucas under the Barclays Long Term Incentive Plan (Barclays LTIP), for
which shareholder approval is being sought at the 2011 AGM. The amount
shown in Table 5 is the value at grant of the proposed awards (based
on 33% of the maximum number of shares subject to the award).
The 2011 Barclays LTIP awards are proposed to be in the form of awards
over Barclays shares. No consideration is payable by the executive Directors
to receive the awards. The 2011 awards will only vest if the performance
condition is satisfied after a three year period and subject to malus and
prudent financial control provisions. For 2011 awards, 50% of the Barclays
shares will be releasable at the end of the three year vesting period, and
50% of the Barclays shares (after payment of tax) will be subject to an
additional 12 month holding period.
The performance condition for the proposed 2011 awards has been
chosen to focus closely on execution of Barclays strategy which gives
primacy to return on equity. The proposed metrics for 2011 awards are
based on three weighted categories as follows:
– Financial (60%): the primary performance metric is 3 year average
RoRWA, and the secondary metric is PBT. RoRWA is a key driver of
RoE and reflects the level of regulatory capital held by the business.
PBT ensures absolute financial performance is considered
– Risk (30%): the performance metric is loan loss rate. This encourages
strong management of credit risk
– Sustainability (10%): performance is assessed by the Committee
against non-financial factors including customer satisfaction, employee
opinion surveys and Barclays relationships with its regulators
The calibration proposed for the performance condition metrics for the
2011 awards, and further details on the Barclays LTIP, are in the Notice
of Meeting for the 2011 AGM at www.barclays.com/investorrelations.
Pensions
Mr Varley ceased to be an active member of the Group’s non-contributory
UK defined benefit pension scheme from 31st March 2010. From 1st April
2010 Mr Varley receives a cash allowance of 25% of base salary in lieu of
membership of a Group pension scheme. Until 31st December 2010
Mr Diamond participated in the Group’s US defined benefit plans (the
US Staff Pension Plan (a funded arrangement) and the US Restoration Plan
(an unfunded arrangement)) which are both non-contributory.
Mr Diamond also participated in the Barclays Bank PLC 401K Thrift
Savings Plan and Thrift Restoration Plan, which are both defined
contribution plans. The company contributions paid in respect of 2010
amounted to £13,588 (US$21,000). With effect from 1st January 2011,
Mr Diamond receives a cash allowance of 50% of base salary in lieu of
membership of a Group pension scheme. Mr Lucas receives a cash
allowance of 25% of base salary in lieu of membership of a Group
pension scheme.
Table 7 includes the pension benefits of the executive Directors. Mr Varley
also has a defined contribution benefit of £599,568 (as at 31st December
2010) in respect of a previous transfer from a freestanding AVC arising from
his personal contributions only. Pension accrued during 2010 (including
increase for inflation) represents the change in accrued pension during the
year including inflation at the prescribed UK rate of 5%. Pensions paid from
the UK defined benefit pension scheme are reviewed annually and increase
by a minimum of the increase in the retail prices index (capped at 5%),
subject to the scheme rules. As a result of the closure of the UK defined
benefit scheme to future accrual from 31st March 2010, Mr Varley has a
negative pension accrued during 2010 when inflation is excluded. Pension
accrued for Mr Varley during 2010 includes a pro-rated deferred pension
increase that was granted on 1st October 2010. The increase in Mr Varley’s
pension transfer value during 2010 is primarily due to being one year nearer
to the assumed retirement age. The increase in Mr Diamond’s pension
transfer value during 2010 is also primarily due to being one year nearer
to the assumed retirement age. The other main factors for Mr Diamond’s
increase were a change in the assumptions used to calculate transfer
values and a fall in the average exchange rate since 2009.
Other benefits
Executive Directors are provided with benefits including private medical
insurance, life and income protection cover, the use of a company-owned
vehicle or the cash equivalent, use of a company driver where required
for business purposes, tax advice and accommodation when required
for business purposes. No executive Director has an expense allowance.
Table 7 includes the benefits received by the executive Directors.
Performance-linked remuneration
Each element of remuneration has a specific role in achieving the aims
of the Remuneration Policy. The combined potential remuneration from
annual performance incentive, deferred incentive awards and long term
incentive awards outweighs the other elements and is subject to individual
and Group performance, thereby placing the majority of potential
remuneration at risk. Table 8 shows the average proportions of fixed and
variable remuneration over the last 3 years. Table 8 incorporates salary
and benefits, the increase in transfer value of accrued pension or annual
cash in lieu of pension, annual performance incentive comprising cash and
share incentives, deferred incentive awards and the fair value of long term
incentive awards.
Table 8: Average fixed and variable remuneration over the last three years
Fixed Variable
Cash Shares
Executive Directors
John Varley 82% 9% 9%
Robert E Diamond Jr 9% 14% 77%
Chris Lucas 28% 9% 63%
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