Barclays 2005 Annual Report Download - page 35

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Each element of reward is important and has a specific role in achieving the aims of the remuneration policy. The combined potential
remuneration from bonus and PSP outweigh the other elements, and are subject to performance conditions, thereby placing the majority of total
reward at risk. The relative weighting of each of the key elements of executive Director remuneration (excluding pension and benefits) is shown
below. The composition of Robert E Diamond Jr’s compensation is shown separately. His arrangements reflect general practice in the investment
banking industry.
‘FIXED’ ‘AT RISK’
Annual
performance bonus
(Maximum) Performance Share Plan
Base salary Cash Shares (Maximum) Fair value
Chief Executive and typical executive Director 20% 37.5% 12.5% 30%
Robert E Diamond Jr 2% 49% 16% 33%
The purpose of each element of remuneration for executive Directors is summarised in the table below and discussed in greater detail in the
sections that follow.
Compensation element Purpose Delivery Policy
Base salary To reflect the market value of the •Cash •Reviewed annually, with changes typically
individual and their role •Monthly effective on 1st April
•Pensionable
Annual performance To incentivise the delivery of annual •75% cash Based on annual performance:
bonus goals, at the Group, business division •25% deferred •Group financial results (EP and PBT):
and individual levels Barclays shares 30-40% weighting
under ESAS •Business unit financial results (EP and PBT):
•Annual 30-40% weighting
•Non-pensionable •Leadership: 30-40% weighting
Performance Share Plan To reward the creation of above •Free shares •Discretionary awards
median, sustained growth in subject to a •Reviewed annually
shareholder value performance •Barclays performance over three years
condition determines the number of performance
•Annual awards shares released to each individual
that vest after •For awards made in 2005, EP threshold,
three years thereafter TSR performance scale
•Non-pensionable •No vesting if TSR ranking is at median or
below relative to the peer group
•For awards to be made in 2006, 50% under
a TSR metric and 50% using an EP metric
Pension To provide market competitive •Deferred cash •Normal retirement age 60
post-retirement benefit •Monthly •Closed non-contributory, defined
benefit scheme
or
Defined contribution scheme
or
Cash allowance in lieu of
pension contributions
Barclays PLC
Annual Report 2005 33
2.4