Barclays 2005 Annual Report Download - page 33

Barclays PLC
Annual Report 2005 31
2.4
Corporate governance
Barclays report on remuneration
Statement from the Chairman of the Board HR and Remuneration
Committee (the Committee)
The Committee provides governance and strategic oversight of
Barclays Human Resource activities with particular emphasis on talent,
remuneration and employee engagement.
Leigh Clifford and John Sunderland joined the Committee during 2005.
All Committee members are independent non-executive Directors.
The Committee meets a minimum of four times a year.
The focus of the Committee in 2005 was:
•the introduction of a revised long-term incentive plan, the
Performance Share Plan (PSP), which was approved by shareholders
at the Barclays Annual General Meeting on 28th April 2005;
•a formal review of compensation strategy for Barclays Global
Investors;
•the development of policies to manage the impact of the changes
to the tax treatment of pensions (known as A day in the UK); and
•talent management.
The Committee takes very seriously its commitment to good disclosure.
The majority of this report details the remuneration of the individual
Directors who served Barclays in 2005.
The following comments will provide context to the disclosures, and
demonstrate the strong pay for performance link inherent in the design
and operation of the Barclays remuneration plans:
•Barclays performed strongly in 2005 with profit before tax and
economic profit(a) up 15% and 12% respectively.
•Barclays Total Shareholder Return (TSR) for the five years to the end
of 2005 was 43%, compared with 6% for the FTSE 100 Index.
•Annual bonus levels vary by executive Director to reflect a
combination of performance of the Group, the businesses and the
individual.
•The main performance condition for executive Directors in the
Incentive Share Option Plan (the ISOP) is TSR relative to a peer
group of 11 other major international banks. This performance
condition is very stretching. The maximum number of shares under
option vests only if Barclays is ranked first in the peer group. For the
2002 grant under the ISOP, which vested in 2005, Barclays was
ranked fourth in the peer group(b). This was sufficient for only 25%
of the maximum number of shares under the TSR condition to vest.
The remaining 75% lapsed.
The Committee unanimously recommends that you vote to approve
the report at the AGM.
Signed on behalf of the Board
Sir Nigel Rudd
Board HR and Remuneration Committee Chairman
9th March 2006
Notes
(a) The definition of economic profit (EP) is set out as a footnote on page 7.
(b) The peer group for the 2002 ISOP was: Abbey National, ABN Amro, BBVA,
BNP Paribas, Citigroup, Deutsche Bank, HBOS, HSBC, Lloyds TSB, Royal Bank
of Scotland and Standard Chartered.