Barclays 2009 Annual Report Download - page 180

178 Barclays PLC Annual Report 2009 www.barclays.com/annualreport09
Corporate governance
Remuneration report
continued
Pensions
Chris Lucas receives a cash allowance of 25% of base salary in lieu of joining
a Group pension scheme.
John Varley is a member of the Group’s 1964 UK defined benefit pension
scheme. Following a review of UK pension schemes, in line with other
employees, he will cease to build up benefits in this non-contributory
defined benefit scheme with effect from 31st March 2010. At present
Mr Varley has a contractual entitlement to an unreduced pension of 60% of
pensionable salary should he retire at age 55, and a pension of up to two
thirds of his pensionable salary at the normal retirement age of 60. Mr Varley
has voluntarily chosen to give up this contractual entitlement with effect
from 1st April 2010 and a lesser amount will now be available, equating to
the benefit accrued up to 31st March 2010.
From 1st April 2010 Mr Varley will instead receive a cash allowance of
25% of his base salary in lieu of joining a Group pension scheme in line with
other executive Directors. No compensation was paid to Mr Varley for giving
up his contractual right to continue to accrue benefits in the defined benefit
pension scheme.
Mr Varley also has a defined contribution benefit of £596,568 as at
31st December 2009 in respect of a previous transfer from a freestanding
AVC, arising from his personal contributions only.
Robert E Diamond Jr participates in the Group’s US non-contributory
defined benefit arrangements which provide a benefit at age 65 of 1/60th of
final average pensionable pay for each year of service up to a maximum of
30 years. In line with current market practice, final average pensionable pay
includes salary and an element of bonus up to a current combined
maximum of US$350,000. The benefits are provided through the US
defined benefit plan (a funded arrangement) and the US Restoration Plan
(an unfunded arrangement). The scheme also provides a death in service
spouse’s pension of approximately 50% of the pension that would have
been payable had early retirement occurred on the date of death.
Mr Diamond also participates in the Barclays Bank PLC 401K Thrift
Savings Plan and Thrift Restoration Plan, which are both defined
contribution plans. The company contributions paid in respect of 2009
amounted to £18,786 (US$29,400).
Table 5 sets out the pension benefits of the current executive Directors.
Pension accrued during the year represents the change in accrued pension
during the year (including inflation at the prescribed rate of –1.6% (UK)).
Pensions paid from the UK defined benefit pension scheme are reviewed
annually and increase by a minimum of the increase in the retail prices index
(capped at 5%), subject to the scheme rules.
The transfer value for Mr Varley has been calculated in a manner
consistent with the approach used by the independent UK Retirement Fund
Trustee to calculate cash equivalent transfer values in compliance with the
transfer value regulations that came into force on 1st October 2008. During
2009, the UK Retirement Fund Trustee changed the transfer basis for all
members. The change reflected different mortality assumptions and a lower
discount rate. This contributed £3m of the increase in Mr Varley’s transfer
value during the year and this amount does not relate to an increase in the
pensions benefits accrued by Mr Varley (but the current actuarial
assessment of the value of those benefits). The remainder of the increase in
transfer value relates to Mr Varley’s additional year of pensionable service.
The transfer value for Mr Diamond has been calculated consistent with
the approach and assumptions appropriate to the US defined benefit plans
of which he is a member.
The transfer values disclosed do not represent a sum paid or payable to
the executive Directors, but rather they represent the present value of
accrued payments to be made under the pension schemes.
Other benefits
Executive Directors are provided with benefits including private medical
insurance, life and disability cover, the use of a company-owned vehicle or
the cash equivalent, tax advice and accommodation overseas when
required for business purposes. These benefits are available on similar terms
to each executive Director. No Director has an expense allowance.
Table 5: Pension provision Transfer Transfer
Pension value of value of
Accrued accrued Pension Accrued accrued accrued
pension during 2009 accrued pension pension pension Increase
at 31st (including during 2009 at 31st at 31st at 31st in transfer Annual cash
Age at 31st Completed December increase for (excluding December December December value during in lieu of
December years of 2008 inflation) inflation) 2009 2008 2009 the year pension
2009 service £000 £000 £000 £000 £000 £000 £000 £000
John Varley 53 27 572 47 56 619 12,328 17,015 4,687 –
Robert E Diamond Jr 58 13 45 13 14 58 280 383 103 –
Chris Lucas 49 2 – ––––– – 163
Table 6: Interests in shares of Barclays PLC
at 31st December 2009
At 1st January 2009 At 31st December 2009
Non- Non-
Beneficial beneficial Beneficial beneficial
Executive Directors
John Varley 593,266 – 622,418 –
Robert E Diamond Jr 5,866,965 – 8,333,810 –
Chris Lucas 76,038 – 101,697 –
Beneficial interests include shares held either directly, or through a nominee, spouse, or
children under 18. They include any interests held through Sharepurchase. Non-beneficial
interests include any interests in shares where the executive Director holds the legal, but not
beneficial interest. Note 42 provides further information on Directors’ and officers’
shareholdings. There were no changes to the interests of executive Directors in shares of
Barclays PLC in the period 31st December 2009 to 5th March 2010.
As part of the termination of EOP, Robert E Diamond Jr exercised his options over 100,000 BGI
Holdings shares. He then sold his newly acquired BGI Holdings shares and existing 200,000
BGI Holdings shares to Barclays Bank PLC for a net consideration of £26.8m, after deducting
aggregate option exercise costs of £6.0m.
Table 7: Indicative change in value of executive Director
total share interests Indicative
Indicative Indicative increase on
value at Indicative value at 31st total share
1st January change in December interest
2009 holdings 2009 2009
£m £m £m £m
Executive Directors
John Varley 2.5 – 4.8 2.3
Robert E Diamond Jr 23.5 (3.7) 40.0 20.2
Chris Lucas 0.7 0.8 2.6 1.1
Total share interests are beneficial interests plus share-based remuneration including any
initial or provisional allocations and vested awards under ESAS, PSP, ISOP and Sharesave.