Barclays 2012 Annual Report Download - page 88

Directors’ remuneration policy continued
Illustrative scenarios for executive Directors’ remuneration
The charts below show the potential value of the current executive Directors’ remuneration in three scenarios: ‘Minimum’ (i.e. fixed remuneration),
‘Maximum’ (i.e. fixed remuneration and the maximum variable remuneration that may be awarded) and ‘Mid-point’ (i.e. fixed remuneration and
50% of the maximum variable remuneration that may be awarded). For the purposes of these charts, the value of benefits is based on an estimated
annual value. The scenarios do not reflect share price movement between award and vesting.
A significant proportion of the potential remuneration of the executive Directors is variable and is therefore performance-related and at risk. At the
‘mid-point’ for the Group Chief Executive, 30% of total remuneration is fixed and 70% is variable, moving to 18% fixed and 82% variable at the
maximum. At the ‘mid-point’ for the current Group Finance Director 29% of total remuneration is fixed and 71% is variable, moving to 17% fixed
and 83% variable at the maximum.
Group Chief Executive
Total remuneration (£000)
LTIP
Bonus
Pension &
Benefits
Salary
Minimum Mid-point Maximum
9,000
7,500
6,000
4,500
3,000
1,500
0
Total 1,540
Total 5,115
Total 8,690
Group Finance Director
9,000
7,500
6,000
4,500
3,000
1,500
0
LTIP
Bonus
Pension &
Benefits
Salary
Minimum Mid-point Maximum
Total remuneration (£000)
Total 1,040
Total 3,640
Total 6,240
How shareholder views and broader employee pay are taken into account by the Committee in setting policy and making remuneration
decisions
The Committee Chairman and senior executives have engaged more extensively and more proactively with shareholders and shareholder
representative bodies during 2012 than ever before. The Committee Chairman has met with major shareholders and also with the Association of
British Insurers, the National Association of Pension Funds and ISS to discuss remuneration matters. The Chairman, Committee Chairman and the
Group Chief Executive also receive frequent comments from private shareholders either in writing or at events such as our Annual General
Meeting. We listen to all of these comments and we try to respond to all of them.
The Committee takes account of the remuneration of the broader employee base when it considers the remuneration of the executive Directors.
The Committee receives and reviews detailed analysis of remuneration proposals for employees across all of the Group’s businesses. This includes
analysis by corporate grade and by performance rating and details of proposed bonuses and salary increases across the employee population.
When the Committee considers executive Director remuneration it therefore makes that consideration in the context of a detailed understanding
of remuneration for the broader employee population.
Our approach to executive Director and wider employee remuneration during 2013 will be characterised by a focus on bearing down on costs and
ensuring the principles of our new remuneration policy are applied at all levels.
Comparison of executive Directors’ remuneration packages with remuneration packages for the broader employee population
The structure of total remuneration packages for executive Directors and for the broader employee population is similar. Employees receive salary,
pension and benefits and are eligible to be considered for a discretionary annual bonus. The broader employee population typically does not have
a contractual limit on the quantum of their remuneration.
The Committee approaches any salary increases for executive Directors on an exception-only basis. Incremental annual salary increases remain
more common among employees at less senior levels.
As with executive Directors, bonuses for the broader employee population are performance based. Bonuses for executive Directors and the
broader employee population are subject to deferral requirements. Executive Directors and other Code Staff are subject to deferral at a minimum
rate of 40% (for bonuses of no more than £500,000) or 60% (for bonuses of more than £500,000) but the Committee may chose to operate
higher deferral rates. For non-Code Staff, bonuses in excess of £65,000 are subject to a graduated level of deferral and in the Investment Bank,
2012 bonuses for Managing Directors are subject to 100% deferral. Executive Directors’ deferred bonuses may include deferred share bonuses
awarded under the SVP. 2012 deferred bonuses for the broader employee population will be awarded 50% under the SVP and 50% under the CVP,
which vest over three years in equal tranches. The terms of deferred bonus awards for executive Directors and the wider employee population are
broadly the same, in particular the vesting of all deferred bonuses is subject to continued service and subject to malus conditions.
The broader employee population is not eligible to participate in the Barclays Long Term Incentive Plan in 2013.
barclays.com/annualreport86 I Barclays PLC Annual Report 2012