Barclays 2014 Annual Report Download - page 89

barclays.com/annualreport Barclays PLC Annual Report 2014 I 87
Pension
Executive directors are paid cash in lieu of pension contributions. This is market practice for senior executives in comparable roles.
2014 Annual Bonus outcomes
(i) Antony Jenkins
The Committee considered Antony Jenkins’ performance against the financial and non-financial measures which had been set to reflect the strategic
priorities for 2014. A summary of the assessment for Antony Jenkins against his specific performance measures is provided in the following table.
Antony Jenkins
Performance measures Weighting Target 2014 Assessment Outcome
Financial
Adjusted profit before tax 20% £5.14bn – £5.92bn £5.5bn 100% 20%
Adjusted Costs (ex CTA) 10% £17.11bn – £16.24bn £16.9bn 100% 10%
CET1 ratio (fully loaded basis) 10% 10.1% – 10.6% 10.3% 100% 10%
Leverage ratio 10% 3.0% – 3.5% 3.7% 100% 10%
Balanced Scorecard – 5 Cs
2018 targets are set
out at page 11
Steady progress
on all targets
Customer & Client
Colleague
Citizenship 35% 22%
Conduct
Company
Personal objectives/contribution 15% See below Judgemental
assessment
11%
Total 100% 83%
Final outcome after the exercise of
Remuneration Committee discretion 57%
In aggregate, the performance assessment resulted in an overall outcome of 83% of maximum bonus opportunity being achieved.
Notwithstanding the performance assessment outcome of 83%, the Committee subsequently used its discretion to reduce the overall outcome
by 26% to 57%. The adjustment was considered appropriate in the context of an holistic assessment which recognised that, amongst other
factors, while there has been solid financial performance and steady progress has been made on strategic repositioning, statutory profit before
tax continues to be impacted by material conduct issues and there remains significant further work to be done to improve overall returns. This
adjustment therefore also incorporated consideration of executive accountability for the significant group-wide conduct issues that impacted
Barclays in 2014 which included, for example, the ongoing Foreign Exchange trading investigations. The resulting 2014 bonus is £1,100,000 (57%
of maximum bonus).
The considerations and rationale for the outcome of each component are set out below.
Financial (50% weighting)
The approach adopted for assessing financial performance is based on driving balanced performance outcomes across a range of measures. In
line with this, performance is initially assessed against a target range for each financial measure with a binary outcome i.e. below range (zero) and
within range (100%). Each financial measure has a weighting allocated, the total of which equals 50% of maximum bonus opportunity. After this
the Committee is required to apply discretion, considering all relevant factors, to ensure that the final outcome is appropriate.
As each financial target has been met or exceeded, a formulaic assessment of the current outcomes against financial measures implies a full 50%
weighting (prior to the application of Committee discretion). There has been sustained and consistent progress made towards our 2016 Transform
targets and Barclays has met all 2014 Transform financial and capital targets. Higher Group and Core adjusted profit before tax were driven by
focused cost saving initiatives. Significant Non-Core run down throughout the year contributed to strengthening of Group capital and leverage
ratios. Group adjusted profit before tax increased 12% to £5,502m. CET1 ratio increased to 10.3% (2013: 9.1%) demonstrating progress towards
the 2016 Transform financial target in excess of 11%. The leverage ratio increased to 3.7% close to the 2016 Transform target to exceed 4%.
Balanced Scorecard (35% weighting)
Each of the five “Cs” of the Balanced Scorecard was assessed. This year the Balanced Scorecard was cascaded throughout the organisation and
now forms part of the framework against which employees are assessed. Barclays has published its 2018 targets on page 11. There has been
steady progress across the Balanced Scorecard towards our 2018 targets. There was however deterioration in the sustained engagement metric
and the Relationship Net Promoter Score. The move in both metrics is predominately due to changes Barclays has undergone during 2014 with
the Strategy Update affecting a structural change in the company. Citizenship initiatives are on track or ahead of target. Progress has been made
on the company metric especially in our fully loaded CRD IV CET1 ratio metric where recent European Banking Authority and Bank of England
stress tests highlighted Barclays capital strength and resilience to stress scenarios.
Based on an assessment of performance against 2014 Balanced Scorecard milestones, the Committee has agreed a 22% outcome out of a
maximum of 35%.
Personal objectives (15% weighting)
Antony Jenkins has shown strong leadership throughout the year and has been fully committed to delivering on the Transform financial targets
and on improving the control environment across the organisation during 2014. Progress against the Transform targets provides strong evidence
that the decisive reshaping of the business announced in the 2014 Strategy update is working. Antony Jenkins’ commitment to Barclays’ Values,
both personally and in continuing to promote their importance throughout the organisation is highly commendable. Progress in embedding
cultural change has continued and changes made are being recognised both internally and externally as illustrated in the Conduct measures in
our Balanced Scorecard. He has strengthened the Executive Committee and the Senior Leadership Group. The Committee judged that 11% of a
maximum of 15% was appropriate.
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