Barclays 2011 Annual Report Download - page 60

Remuneration report continued
Remuneration governance
The Committee determines the bonus pool by reference to a number of
quantitative and qualitative measures. In doing this the Committee is
informed by the remuneration governance frameworks and associated
financial metrics and remuneration ratios. The Committee receives input from
the Group Finance Director and the Chief Risk Officer on key financial and risk
matters. The Committee works closely with the Board Audit Committee and
the Board Risk Committee, and receives input on internal audit, compliance
and risk matters. This includes the Committee receiving a report from the
Board Risk Committee on the risk performance of the businesses in order to
ensure that the bonus pool properly reflects this performance.
The Committee reviews individual remuneration recommendations for
executive Directors, Code Staff and employees with total remuneration of
£1m or more. Remuneration decisions are directly linked to individual
performance, both financial and non-financial. Individual performance is
reviewed by line management through a formal assessment process,
which includes a review against objectives set at the start of the year. The
assessment includes reviewing individual behaviour against Barclays
guiding principles and applicable risk and control policies.
Bonuses above a threshold level (set annually by the Committee) include
awards in the form of deferred bonuses. The vesting of deferred bonuses
is dependent on future service and subject to clawback provisions. The
Committee reviews the operation of clawback provisions and may reduce
the vesting level of an unvested deferred bonus (including to nil). Events
that may lead to the operation of clawback provisions include employee
misconduct, harm to Barclays reputation, material restatement of Barclays
financial statements, a material failure of risk management or a significant
deterioration in the financial health of Barclays. Clawback provisions may
also result in suspension of deferred bonuses where an employee is under
investigation for a regulatory or disciplinary matter.
The risk and compliance functions play a key role in remuneration
governance. The risk function provides regular updates to the Committee
on risk adjusted business performance and it also provides input on the
remuneration governance frameworks, bonus pool proposals and new
incentive plan designs (including risk-adjusted metrics for use in long term
incentive plans) from a risk management perspective. The input of the
compliance function focuses on the assessment of individual employee
behaviour based on the operation of compliance controls. Remuneration
decisions for employees working in key control functions, including the
risk and compliance functions, are determined independently of the
businesses in which they work. The remuneration governance
arrangements described above apply to all employees in Barclays,
including Code Staff.
Executive Director remuneration
Table 4 shows the total remuneration for the executive Directors and
Table 5 shows their salaries.
Salary
The executive Directors’ salaries are unchanged for 2012.
Bonus
The maximum bonus opportunity for 2011 for executive Directors was
250% of salary, and it will remain the same for 2012.
The bonuses for 2011 for the executive Directors reflect the results for 2011
which were delivered amidst a challenging economic, market and regulatory
environment. The bonuses are deferred over a period of three years in
Barclays shares under the Share Value Plan (SVP). No consideration is
payable by the executive Directors to receive the award. SVP awards normally
vest in equal portions on the first, second and third anniversaries of grant
dependent on future service and they are subject to clawback provisions.
Long term incentive awards
The maximum value of long term incentive awards for executive Directors
for the 2012-2014 performance period is 500% of salary. Table 4 shows
the value at award of the proposed long term incentive awards for the
2012-2014 performance period for the executive Directors (based on 33%
of the maximum number of shares subject to the award). The long term
incentive awards will be granted under the Barclays Long Term Incentive
Plan. No consideration is payable by the executive Directors to receive the
awards. The awards are dependent on future service and vest subject to
performance conditions and clawback provisions. Further details on the
Barclays Long Term Incentive Plan (Barclays LTIP) are provided in the
additional material on Barclays approach to remuneration which is
available at www.barclays.com/investorrelations.
Table 4: Total remuneration (audited)
Bob Diamond Chris Lucas
2011
£000
2010
£000
2011
£000
2010
£000
Salary 1,350 250 800 763
Current year cash bonus 000360
Current year share bonus 01,800 0360
Deferred cash bonus 02,350 0540
Deferred share bonus 2,700 2,350 1,800 540
Total of salary and bonus 4,050 6,750 2,600 2,563
Long term incentive award 2,250 2,250 1,333 1,333
Total remuneration 6,300 9,000 3,933 3,896
Table 5: 2011 and 2012 salary
Salary at
31 December 2011
£000
Salary at
1 April 2012
£000
Date of
previous
increase
Bob Diamond 1,350 1,350 1 January 2011
Chris Lucas 800 800 1 April 2010
58 Barclays PLC Annual Report 2011 www.barclays.com/annualreport