Barclays 2014 Annual Report Download - page 83

barclays.com/annualreport Barclays PLC Annual Report 2014 I 81
Remuneration structure
Employees receive salary, pension and other benefits and are eligible to be considered for an annual bonus. Employees in some customer-facing
businesses participate in incentive plans including plans based on customer feedback and other measures of the quality of service they provide to
customers. Remuneration of PRA Material Risk Takers (MRTs), formerly known as Code Staff, is subject to the 2:1 maximum ratio of variable to
fixed pay. A total of 1,277 (2013: 530) individuals were MRTs. Capital Requirements Regulation disclosures on MRTs are set out on page 170 in
Barclays 2014 Pillar 3 report. Some senior employees receive Role Based Pay (RBP).
Barclays was accredited in 2014 as a UK Living Wage employer, which recognised the Bank’s commitment to ensure that all its employees and
those employees of third party contractors who provide services to us at our sites, are paid at least the current London or UK Living Wage. This is a
commitment which we have also extended to all our UK employed apprentices.
Further information on remuneration structure is provided below.
Fixed remuneration
Salary Q Salaries reflect individuals’ skills and experience and are reviewed annually in the context of annual performance assessment.
They are increased where justified by role change, increased responsibility or where justified by the latest available market
data. Salaries may also be increased in line with local statutory requirements and in line with union and works council
commitments.
Role Based Pay
(RBP)
Q A small number of senior employees receive a class of fixed pay called RBP to recognise the seniority, breadth and depth of
their role. RBP was introduced in 2014 to enable Barclays to remain competitive for global talent, given the CRD IV 2:1
maximum ratio of variable to fixed pay which came into effect in 2014.
Pension and
benefits
Q The provision of a competitive package of benefits is important to attracting and retaining the talented staff Barclays needs to
deliver Barclays’ strategy. Employees have access to a range of country specific company funded benefits, including pension
schemes, healthcare, life assurance and Barclays share plans as well as other voluntary employee funded benefits. The cost of
providing the benefits is defined and controlled.
Variable remuneration
Annual bonus Annual bonuses reward and incentivise the achievement of Group, business and individual objectives, and the demonstration of
individual behaviours in line with Barclays’ Values and Behaviours.
The ability to recognise performance through variable remuneration enables the Group to control its cost base flexibly and to
react to events and market circumstances. Bonuses remain a key feature of remuneration practice in the highly competitive and
mobile market for talent in the financial services sector. The Committee is careful to control the proportion of variable to fixed
remuneration paid to individuals.
Bonus deferral levels are significantly in excess of PRA requirements.
For MRTs, the deferral rate is a minimum of 40% (for bonuses of up to £500,000) or 60% (for bonuses of more than £500,000).
For non-MRTs, bonuses over £65,000 are subject to a graduated level of deferral.
2014 bonuses awarded to Managing Directors in the Investment Bank are 100% deferred.
Deferred bonuses are generally delivered in equal portions as deferred cash under the Cash Value Plan (CVP) and deferred
shares under the Share Value Plan (SVP), each typically vesting in annual tranches over three years subject to the rules of the
plans and continued service.
Deferred bonuses are subject to malus provisions which enable the Committee to reduce the vesting level of deferred bonuses
(including to nil) at its discretion. Events which may lead the Committee to do this include, but are not limited to, employee
misconduct or a material failure of risk management.
Clawback applies to any variable remuneration awarded to a MRT on or after 1 January 2015. Barclays may apply clawback if at
any time during the 7 year period from the date on which variable remuneration is awarded to a MRT: (i) there is reasonable
evidence of employee misbehaviour or material error, and/or (ii) the firm or the business unit suffers a material failure of risk
management, taking account of the individual’s proximity to and responsibility for that incident.
Share plans Alignment of senior employees with shareholders is achieved through deferral of incentive pay into the SVP. We also encourage
wider employee shareholding through the all employee share plans. 83% of the global employee population (excluding Africa)
are eligible to participate.
The Strategic Report Governance Risk review Financial review Financial statements Shareholder information