Barclays 2007 Annual Report Download - page 148

146 Barclays PLC Annual Report 2007
Corporate governance
Remuneration report
The Committee reviews the elements of remuneration relative to the policies stated in this report and to the practice of other comparable organisations.
Remuneration is benchmarked against the markets in which we compete for talent. This includes benchmarking against other leading international banks
and financial services organisations, and other companies of similar size to Barclays in the FTSE 100 Index.
The component parts for each executive Director are detailed in the tables accompanying this report.
The Committee guideline that executive Directors should hold, as a minimum, the equivalent of one times their base salary in Barclays shares, including
shares held under award through ESAS, was met by all executive Directors.
Each element of remuneration is important and has a specific role in achieving the aims of the remuneration policy. The combined potential remuneration
from bonus and PSP outweighs the other elements, and is subject to personal and Group performance, thereby placing the majority of total remuneration
at risk.
Of the key elements of remuneration (salary, annual performance bonus, ESAS and PSP), salary made up a maximum of 30% of the 2007 remuneration
for executive Directors and 1.4% in respect of Robert E Diamond Jr’s arrangements, which reflects general practice in the investment banking and
investment management industry. The remaining proportion of the key compensation elements for executive Directors is at risk. The relative weighting
summarised in this paragraph does not include pension and benefits.
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.
Remuneration element Purpose Delivery Programme detail
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 – Typically 75% cash a– Based on annual business unit
bonus and ESAS goals at the Group, business division – Typically 25% performance, performance of the Group
and individual levels deferred Barclays as a whole and leadership contribution
shares under ESAS
– Annual
– Non-pensionable
PSPbTo reward the creation of above – Free shares – Discretionary awards
median, sustained growth in subject to a – Participation reviewed annually
shareholder value performance – Barclays performance over three years
condition determines the number of performance
– Annual awards shares eligible for release to each individual
that vest after – For awards made in 2007, and awards to
three years be made in 2008, EP threshold,
– Non-pensionable thereafter 50% under a TSR performance
condition and 50% under an EP
performance condition
PensioncTo provide market competitive – Deferred cash or – Non-contributory, defined benefit
post-retirement benefit cash allowance scheme and/or defined contribution
– Monthly scheme, or cash allowance in lieu of
pension contributions
Notes
aEligible executives may request that all or part of the cash bonus to which they would
otherwise become entitled, be granted in the form of an additional award under ESAS
or as a pension contribution by way of Special Company Contribution (Bonus Sacrifice).
For 2007 Robert E Diamond Jr received 43% of his annual bonus in cash and 57% as a
recommendation for an award of Barclays shares under Mandatory ESAS.
Changes to Group Chairman and executive Directors
Marcus Agius was appointed Group Chairman with effect from
1st January 2007.
Marcus Agius receives a fee of £750,000 (inclusive of Director’s fees). He is
also eligible for private health insurance. The minimum time commitment
is equivalent to 60% of a full time role. Marcus Agius is not eligible to
participate in Barclays bonus and share incentive plans, nor will he
participate in Barclays pension plans or receive any pension contributions.
The letter of appointment provides for a notice period of 12 months from
Barclays and six months from Marcus Agius.
Naguib Kheraj ceased to be an executive Director on 31st March 2007.
Naguib Kheraj was succeeded by Chris Lucas, who was appointed to
the position of Group Finance Director with effect from 1st April 2007.
The key terms of executive Directors’ service contracts are on page 149.
Base Salary
The annual base salaries for the current executive Directors are shown in
the table below:
Date of
As at As at previous
31st Dec 2007 1st April 2008 increase
John Varley £1,000,000 £1,100,000 1st Apr 2007
Robert E Diamond Jr £250,000 £250,000 1st Mar 1999
Gary Hoffman £625,000 £625,000 1st Apr 2006
Frits Seegers £700,000 £700,000 n/a
Chris Lucas £600,000 £650,000 n/a
In respect of John Varley and Chris Lucas, having regard to the levels of
salary and total compensation in comparable organisations, the Committee
approved an increase to base salary effective from 1st April 2008.
bPlease refer to Note 44 to the accounts for further information on PSP.
cPlease refer to Note 30 to the accounts for further information on the Group’s
pension plans.