Barclays 2009 Annual Report Download - page 181

www.barclays.com/annualreport09 Barclays PLC Annual Report 2009 179
Shareholding guideline
The Committee guideline provides that executive Directors should hold
Barclays PLC shares worth, as a minimum, the higher of two times base
salary or average of total remuneration over the last three years. Executive
Directors have five years from their appointment to meet this guideline and a
reasonable period to build up to the guideline again if it is not met because
of a share price fall. Table 6 shows the current executive Directors’ beneficial
and non-beneficial interests in shares. Table 7 shows the indicative change
in value of the executive Directors’ total share interests during 2009.
Performance-linked remuneration
Each element of remuneration is important and has a specific role in
achieving the aims of the Remuneration Policy. The combined potential
remuneration from annual performance bonus and PSP outweighs the
other elements, and is subject to personal and Group performance, thereby
placing the majority of potential remuneration at risk.
Table 8 shows the average proportions of fixed and variable pay over the
last three years.
Table 8: Average fixed and variable pay over
the last three years (or since joining) Variable
Fixed Cash Shares
Executive Directors
John Varley 79% 9% 12%
Robert E Diamond Jr 4% 23% 73%
Chris Lucas 30% 6% 64%
This incorporates salary and benefits, the increase in transfer value of accrued pension or
annual cash in lieu of pension, annual bonus comprising cash bonus and deferred share
awards including bonus shares, and the fair value of PSP awards.
Service contracts
The Group has service contracts with its executive Directors which do
not have a fixed term but provide for a notice period from the Group of
12 months and normally for retirement at age 65. Executive Directors’
contracts allow for termination with contractual notice from the Group
or, in the alternative, termination by way of payment in lieu of notice
(in phased instalments) which are subject to contractual mitigation.
In the event of gross misconduct, neither notice nor a payment in lieu
of notice will be given.
The Committee’s approach when considering payments in the event
of termination is to take account of the individual circumstances including
the reason for termination, contractual obligations and share and pension
plan rules.
The Committee is sensitive to stakeholder concerns regarding
contractual bonus payments to departing executive Directors. The executive
Directors’ service contracts will be reviewed in 2010 in the light of best
practice and regulatory and corporate governance developments. The
Committee does not intend to include similar contractual provisions in
relation to executive Director appointments going forward.
Details of current executive Director contract terms are shown in Table 9.
External appointments
The fees for external appointments held by executive Directors are shown in
Table 10.
Table 9: Contract terms Effective date Notice period
of contract from the Company Potential compensation for loss of office
Executive Directors
John Varley 1st September 2004 12 months 12 months base salary, bonus equivalent
to the average of the previous three years
and continuation of medical and pension
benefits whilst an employee
Robert E Diamond Jr 1st June 2005 12 months 12 months base salary, bonus equivalent
to the average of the previous three years
and continuation of medical and pension
benefits whilst an employee
Chris Lucas 1st April 2007 12 months 12 months base salary, bonus equivalent
to the average of the previous three
years up to 100% of base salary and
continuation of medical and pension
benefits whilst an employee
Table 10: Fees for external appointments held by executive Directors 2009 2008
Fees Fees
Director Organisation Fees retained Fees retained
John Varley British Grolux Investments Limited £8,061 £8,061 £7,788 £7,788
AstraZeneca PLC £95,000 £95,000 £83,333 £83,333
Any other positions held by the executive Directors do not attract fees.