Barclays 2012 Annual Report Download - page 74

Remuneration report
Statement from the Chairman of the
Board Remuneration Committee
Dear shareholder
As Chairman of the Board Remuneration Committee I am pleased
to introduce the Directors’ Remuneration Report for 2012.
I hope that 2012 will be seen as a turning point in the way Barclays
approaches remuneration. For 2012 and in future we are taking a
different approach to the balance between Directors’ and employees’
remuneration, and returns for shareholders. We have been justifiably
criticised for failures to engage effectively with and explain our
decisions to shareholders and the wider public, as well as on some
occasions being criticised for the decisions themselves.
Reports of this kind tend towards standard disclosures and language.
It is true, but arguably not very illuminating, to say that our role as a
Committee is to ensure that Barclays is able to motivate, retain and
incentivise the people needed to deliver the Board’s strategy. We need
to go further, and explain that while discharging this role we must
also ensure that we pay no more than necessary to achieve Barclays
objectives, and that we eliminate undeserved remuneration and that
by doing so we protect and promote the interests of our shareholders.
We must do all this on the basis of transparent compliance and
engagement with our regulators.
On pages 74 and 75 we set out what we know will be some of our
shareholders’ most pressing questions and concerns. Our answers are
set out there and expanded upon in subsequent sections of this report.
Current Remuneration
Committee members
Chairman
Sir John Sunderland
Members
Sir David Walker
Simon Fraser
David Booth
Tim Breedon
2012 Remuneration
 While underlying financial performance has significantly
improved, we have materially reduced remuneration. Variable
remuneration has been reduced overall by 16% and fixed
remuneration by 7% year on year.
 Remuneration as a proportion of adjusted profit before tax
and adjusted net operating income is down significantly, as
are average individual bonus levels. We have made substantial
reductions in remuneration, including clawing back £300m
of unvested deferred and long term incentive awards and risk
adjustments of £860m to our 2012 incentives pool to reflect
the LIBOR investigation and other risk issues in 2012. Our
deferral rates significantly exceed FSA requirements.
 The Barclays Long Term Incentive Plan has been restricted
in 2013 to our most senior employees. The performance
condition will include financial and risk measures along with
other measures from a balanced scorecard. After vesting a
new two year holding period will apply to extend the plan to
five years in total. We have also introduced new shareholding
requirements for executive Directors and senior executives.
 These actions represent a major repositioning of Barclays
remuneration and demonstrate our determination to pay
no more than necessary, while remaining competitive.
Priorities for 2013
 We will continue to make sustainable reductions in
remuneration levels while retaining the talent needed
to execute the Board’s strategy.
 Performance assessments and performance related
remuneration will reflect both what and how business
results are achieved.
 We will maintain a frequent, frank and constructive dialogue
with our shareholders and regulators on remuneration
matters, as we have in 2012.
 Our new remuneration policy will protect and promote
shareholders’ interests.
barclays.com/annualreport72 I Barclays PLC Annual Report 2012