Barclays 2004 Annual Report Download - page 32

30
Corporate governance
Barclays report on remuneration
the Board. They are included in the table of Directors’ interests in
ordinary shares of Barclays PLC on page 39. Non-executive Directors
do not receive awards in share or share option plans for employees,
nor do they accrue pension benefits from Barclays for their non-
executive services.
Non-executive Directors do not have service contracts. For each
non-executive Director, the effective date of their appointment, notice
period and the Group’s liability in the event of early termination are
shown in the table below:
Group
liability in the
Non-executive Appointment Notice event of early
Directors date period termination
TDG Arculus 1st Feb 1997 6 months 6 months’
fees
Sir Richard Broadbent 1st Sep 2003 " "
RL Clifford 1st Oct 2004 " "
Professor Dame
Sandra Dawson 1st Mar 2003 " "
Sir Andrew Likierman 1st Sep 2004 " "
Sir Nigel Rudd 1st Feb 1996 " "
SG Russell 25th Oct 2000 " "
Dr Jürgen Zech 30th Jul 2002 " "
Former Directors
Dame Hilary Cropper 1st Jun 1998 " –
Sir Brian Jenkins 25th Oct 2000 " –
Each appointment is for an initial six-year term, renewable for a single
term of three years thereafter. Details of non-executive Directors
standing for re-election at the 2005 AGM are set out on page 19.
Future Policy
The Committee intends to continue to review the existing
remuneration arrangements, as detailed in this Report during 2005
and will seek to ensure that Barclays reward programmes remain
competitive and provide appropriate incentive to perform. As usual,
there will be individual reviews of base salary, annual bonus (including
ESAS) and awards under the long-term incentive plans.
Mr Barrett’s base salary from 1st January 2005 has been reduced to
£650,000 p.a.. He will not be eligible for any performance bonus in
respect of the 2005 performance year. He will also not be eligible for
pension accrual or long-term incentive awards. Mr Varley’s base salary
from 1st September 2004 is £850,000 p.a. reflecting his role as Group
Chief Executive from that date.
A proposal has been submitted to shareholders to seek approval for a
new long-term incentive plan for Directors and other senior leaders
effective from 2005. The new plan is designed to drive outstanding
relative TSR performance. It includes performance shares rather than
share options. There is no performance condition re-test in the new plan.
Audited Information
As required by Part 3 of Schedule 7A of the Companies Act 1985, the
Group’s auditors, PricewaterhouseCoopers LLP, have audited the
information contained on pages 31 to 38.
Potential
Effective Normal compensation
date Notice retirement for loss
Directors(a) of contract period date of office
1 year’s
contractual
MW Barrett(b) 1st Sep 2004 1 year n/a remuneration
JS Varley 1st Sep 2004 1 year 31st Mar 2016 "
RJ Davis 1st Jan 2004 1 year 3rd Jun 2016 "
GA Hoffman 1st Jan 2004 1 year 20th Oct 2020 "
N Kheraj 1st Jan 2004 1 year 14th Jul 2024 "
DL Roberts 1st Jan 2004 1 year 11th Sep 2022 "
Former Directors
Sir Peter
Middleton(c) 1st May 1999 1 year n/a –
CJ Lendrum 15th Jun 1992 1 year n/a –
Notes
(a) Details of executive Directors standing for re-election at the 2005 AGM are
set out on page 19.
(b) There is no formal retirement date under Mr Barrett’s contract.
(c) Sir Peter Middleton’s service contract did not provide for a retirement date.
Barclays Capital and Barclays Global Investors
The Committee has established frameworks for the governance and
control of compensation in these businesses. Ranges have been set for key
financial and compensation ratios such as operating costs to net revenue,
compensation to pre-compensation Profit Before Tax and bonus
expenditure as a percentage of pre-bonus profits. The Committee approves
aggregate bonus and long-term incentive expenditure, and strategic
investment on new hires, in these businesses, taking account of these
agreed ratios. The Committee also approves individual compensation for
the members of the management teams in these businesses.
Non-executive Directors
The Board determines the fees of non-executive Directors, which are
reviewed annually.
The basic fee for a non-Executive Director is £50,000 p.a. with an
additional £15,000 p.a. paid to members of the following committees:
Board Audit, Board Risk, Board HR and Remuneration, and Board
Corporate Governance and Nominations. The Chairmen of the Board
Risk and the Board Audit Committees receive £25,000 p.a.. As Senior
Independent Director, Sir Richard Broadbent receives an additional
fee of £25,000 p.a.. As Deputy Chairman, Sir Nigel Rudd receives
£150,000 p.a. without any additional fee for chairing the Board HR
and Remuneration Committee or membership of the Board Corporate
Governance and Nominations Committee. Similarly, as Chairman,
Matthew W Barrett receives a salary of £650,000 p.a. from 1st January
2005, without any additional fee for chairing the Board Corporate
Governance and Nominations Committee.
The Board’s policy is that fees should reflect individual responsibilities
and membership of Board Committees. Barclays encourages its non-
executive Directors to build up a holding in the Company’s shares.
£20,000 of each Director’s basic fee of £50,000 is used to buy shares
in the Company. These shares, together with reinvested dividends, are
retained on behalf of the non-executive Directors until they retire from