Barclays 2013 Annual Report Download - page 104

Remuneration policy for executive Directors continued
Element and purpose Operation Maximum value and performance measures
B. Variable Pay
Annual bonus
To reward delivery of
short-term financial
targets set each year, the
individual performance
of the executive Directors
in achieving those
targets, and their
contribution to delivering
Barclays’ strategic
objectives
While financial objectives
are important, the
Balanced Scorecard
(which also includes
Group financial targets)
plays a significant role in
bonus determination, to
ensure alignment with
Barclays’ strategy
Deferred bonuses
encourage long-term
focus and retention.
Delivery substantially or
fully in shares with a
holding period increases
alignment with
shareholders. Deferred
bonuses are granted by
the Committee (or
an authorised sub-
committee) at its
discretion, subject to the
relevant plan rules
Determination of annual bonus
Individual bonuses are discretionary and decisions are based on the
Committee’s judgement of executive Directors’ performance in the
year, measured against Group and personal objectives.
Delivery structure
Executive Directors are Code Staff and their bonuses are therefore
subject to deferral of at least the level applicable to all Code Staff,
currently 40% (for bonuses of no more than £500,000) or 60%
(for bonuses of more than £500,000). The Committee may choose
to defer a greater proportion of any bonus awarded to an executive
Director than the minimum required by the PRA Remuneration Code.
At least half the non-deferred bonus is delivered in shares or
share-linked instruments.
Deferred bonuses for executive Directors may be delivered in a
combination of shares or other deferral instruments.
Participants may, at the Committee’s discretion, also receive
the benefit of any dividends paid between the award date and
the relevant release date in the form of dividend shares.
Operation of risk and conduct adjustment and malus
Any bonus awarded will reflect appropriate reductions made to
incentive pools in relation to risk events. Individual bonus decisions
may also reflect appropriate reductions in relation to specific risk and
conduct events.
All unvested deferred bonuses are subject to malus provisions which
enable the Committee to reduce the vesting level of deferred
bonuses (including to nil) for any reason. These include, but are not
limited to:
 A participant deliberately misleading Barclays, the market and/or
shareholders in relation to the financial performance of the
Barclays Group
 A participant causing harm to Barclays’ reputation or where
his/her actions have amounted to misconduct, incompetence
or negligence
 A material restatement of the financial statements of the Barclays
Group or the Group or any business unit suffering a material down
turn in its financial performance
 A material failure of risk management in the Barclays Group
 A significant deterioration in the financial health of the Barclays
Group.
Timing of receipt
Non-deferred cash components of any bonus are paid following
the performance year to which they relate, normally in February.
Non-deferred share bonuses are awarded normally in March and are
subject to a six-month holding period.
Deferred share bonuses normally vest in three equal portions over a
minimum three-year period, subject to the provisions of the plan
rules including continued employment and the malus provisions
(as explained above). Should the deferred awards vest, the shares are
subject to an additional six-month holding period (after payment
of tax).
The maximum annual bonus
opportunity is 80% of fixed pay. For
these purposes, fixed pay is as set out
in the charts on page 100.
The performance measures by which
any executive Director bonuses are
assessed include Group, business and
personal measures, both financial
and non-financial. Financial measures
may include, but are not restricted to
such measures as net income,
adjusted profit before tax, return on
equity, CET 1 ratio and return on risk
weighted assets. Non-financial
measures are based on the Balanced
Scorecard. Personal objectives may
include key initiatives relating to the
role of the Director or in support of
Barclays’ strategic objectives. The
Balanced Scorecard is set out on
page 10 and may be updated from
time to time in line with the Group’s
strategy. In making its assessment of
any bonus, the Committee will
consider financial factors to guide
50% of the bonus opportunity, the
Balanced Scorecard 35%, and
personal objectives 15%. Any bonus
is discretionary and any amount may
be awarded from zero to the
maximum value.
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102 Barclays PLC Annual Report 2013
Remuneration report
Directors’ remuneration policy continued