Barclays 2012 Annual Report Download - page 294

Employee benefits
The notes included in this section focus on the costs and commitments associated with employing our staff.
35 Staff costs
Accounting for staff cost
The Group applies IAS 19 Employee benefits in its accounting for most of the components of staff costs.
Short term employee benefits – salaries, and accrued performance costs, social security and the Bank Payroll Tax are recognised over the
period in which the employees provide the services to which the payments relate.
Performance costs – recognised to the extent that the Group has a present obligation to its employees that can be measured reliably and are
recognised over the period of service that employees are required to work to qualify for the services.
Deferred cash bonus awards and deferred share bonus awards are made to employees to incentivise performance over the vesting period.
To receive payment under an award, employees must provide service over the vesting period, typically three years from the grant date.
The period over which the expense for deferred cash and share bonus awards is recognised is based upon the common understanding
between the employee and the Group and the terms and conditions of the award. The Group considers that it is appropriate to recognise
the awards over the period from the date of grant to the date that the awards vest as this is the period over which the employees understand
that they must provide service in order to receive awards. The table on page 82 details the relevant award dates, payment dates and the
period in which the income statement charge arises for bonuses. No expense has been recognised in 2012 for the deferred bonuses granted
in March 2013, as they are dependent upon future performance rather than performance during 2012.
The accounting policies for share based payments and pensions and other post-retirement benefits are under Note 36 and Note 37 respectively.
2012
£m
2011
£m
2010
£m
Performance costs 2,425 2,527 3,350
Salaries 5,981 6,277 6,151
Other share based payments 105 167 168
Social security costs 685 716 719
Post-retirement benefits 590 727 528
Total compensation costs 9,786 10,414 10,916
Bank payroll tax 34 76 96
Other 627 917 904
Non compensation costs 661 993 1,000
Staff costs 10,447 11,407 11,916
2012
Total staff costs reduced 8% to £10,447m, principally reflecting a 5% reduction in salaries, a 19% reduction in post-retirement benefits and
reductions in performance costs. Salaries reduced by 5% to £5,981m reflecting a moderately declining average headcount. The post-retirement
benefits charge decreased 19% to £590m, primarily reflecting scheme closures and benefit changes in the US and Spain, and lower interest cost
for the UK Retirement Fund. The post-retirement benefits charge includes £311m (2011: £318m; 2010: £297m) in respect of defined contribution
schemes and £279m (2011: £409m; 2010: £231m) in respect of defined benefit schemes.
Performance costs reduced 4% to £2,425m, reflecting a 22% reduction in charges for current year cash and share bonuses and sales
commissions, commitments and other incentives of £1,202m, partially offset by a 23% increase in the charge for deferred bonuses from prior
years to £1,223m.
The Group incentive awards granted (which exclude charges relating to prior year deferrals but include current year awards vesting in future
years) were down 16% to £2.2bn. Investment Bank incentive awards were down 20% to £1.4bn.
barclays.com/annualreport292 I Barclays PLC Annual Report 2012
Notes to the financial statements
For the year ended 31 December 2012 continued