Barclays 2007 Annual Report Download - page 147

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Governance
Barclays PLC Annual Report 2007 145
Board HR and Remuneration Committee Members
During 2007, the Committee comprised both independent non-executive
Directors and the Chairman of the Board. Membership of the Committee
was as follows:
Sir Richard Broadbent (Chairman)
Marcus Agius
Leigh Clifford
Sir John Sunderland
The non-executive Directors who were Committee members were
considered by the Board to be independent of management and free from
any business or other relationship that could materially affect the exercise
of their independent judgement. The constitution and operation of the
Committee complies with the Provisions on the Design of Performance
Related Remuneration in the Combined Code adopted by the Financial
Reporting Council.
Marcus Agius was appointed as a member of the Committee with effect
from 1st January 2007.
The Chairman of the Committee presents a report of each meeting to the
full Board.
Advisers to the Committee
The Committee has access to independent consultants to ensure that it
receives independent advice. Advisers are appointed by the Committee for
specific work, as necessary, and are required to disclose to the Committee
any potential conflict of interest.
In 2007, Kepler Associatesawere re-appointed by the Committee to provide
independent advice to Committee members on remuneration matters.
Towers Perrin MGMC awere appointed to provide advice to the
Committee in 2007, primarily in relation to the provision of remuneration
for employees below Board level and in the global financial services
industry.
The Group Chief Executive, the Human Resources Director and, as
necessary, members of the Executive Committee, also advise the
Committee, supported by their teams. They are not permitted to
participate in discussions or decisions relating to their own remuneration.
The Human Resources Director is responsible for providing professional
support to line management in HR policy and operations and for
monitoring compliance with prescribed policy and programmes across
Barclays. The Human Resources Director is not a Board Director and is
not appointed by the Committee.
Remuneration Policy
Barclays policy is to use remuneration to drive a high-performance culture.
Executive Directors can expect outstanding remuneration if performance
is outstanding and below median remuneration for below median
performance. This philosophy applies to remuneration policies and
practices for all employees in the Group. The Committee considers
remuneration levels across the Group when determining remuneration
for executive Directors.
The aims of the Barclays Remuneration Policy are to:
– incentivise excellence in and balance between both short-term
(one year) and longer-term (three years plus) performance such that
Group financial goals and the goal of achieving top quartile total
shareholder return (TSR) are met and sustained;
– enable the Group to attract and retain people of proven ability,
experience and skills in the pools in which it competes for talent;
– encourage behaviour consistent with Barclays Guiding Principlesb
which leads to excellence and the appropriate balance in financial
performance, governance, controls, risk management, customer
service, people management, brand and reputation management;
– promote attention to maximising personal contribution, contribution to
the business in which the individual works and contribution to the
Group overall; and
– ensure, both internally and externally, that remuneration policies and
programmes are transparent, well communicated, easily understood
and aligned with the interests of shareholders.
The graph below shows the value, at 31st December 2007, of £100
invested in Barclays on 31st December 2002 compared with the value
of £100 invested in the FTSE 100 Index. The other points plotted are the
values at intervening financial year ends. The FTSE 100 Index is the index
of the 100 largest UK quoted companies by market capitalisation. It is a
widely recognised performance comparison for large UK companies such
as Barclays and this is why it has been chosen as a comparator to illustrate
Barclays TSR. The graph shows that, at the end of 2007, a hypothetical
£100 invested in Barclays on 31st December 2002 would have generated
a total return of £63, compared with a gain of £95 if invested in the FTSE
100 Index.
Remuneration for executive Directors
Remuneration for the executive Directors comprises:
– base salary;
– annual bonus including mandatory deferral into Barclays shares
through the Executive Share Award Scheme (ESAS);
– long-term incentives through the Performance Share Plan (PSP); and
– pension and other benefits.
Source: Datastream
Schedule 7A of the Companies Act 1985 requires that the graph shows TSR for the five
years ending with the relevant financial year.
Total Shareholder Return £
02
Year ended 31st December
03 04 05 06 07
100
136
131
158
181
195
100
118
167 181
226
163
FTSE 100 Index
Barclays PLC
Notes
aKepler Associates and Towers Perrin MGMC have given and not withdrawn their written
consent to the inclusion of references to their name in the form and context in which
it appears. Towers Perrin MGMC also provided remuneration benchmarking data to
Barclays Group companies during the year.
bBarclays Guiding Principles were introduced during 2005 and provide all parts of the
Group with a unifying set of values. They are: Winning Together, Best People,
Client/Customer Focused, Pioneering and Trusted.