Barclays 2013 Annual Report Download - page 97

This section sets out our plans for remuneration compliance with CRD IV in respect of the CRD IV pay ratio.
The CRD IV pay ratio of 2:1 is subject to a binding shareholder vote at the 2014 AGM.
CRD IV is EU regulation that has been effective from 1 January 2014. CRD IV’s remuneration provisions include a maximum ratio between variable
and fixed remuneration (CRD IV pay ratio) for Code Staff. Code Staff include senior management, risk takers, staff engaged in control functions
and any other employees whose professional activities have a material impact on Barclays’ risk profile.The maximum CRD IV pay ratio is either 1:1
(without shareholder approval) or 2:1 (with shareholder approval). The maximum ratio will apply to variable remuneration awarded in respect of
the 2014 performance year onwards.
Barclays had 530 Code Staff in 2013. While the number of impacted employees will still be a small proportion of total employees, we expect
this figure to increase in 2014 under the European Banking Authority’s new definition of Code Staff. The current estimate for 2014 is between
1,100 and 1,400 Code Staff.
As an EU headquartered bank, the CRD IV pay ratio applies to Barclays Code Staff globally. This is not the case for Barclays’ non-EU headquartered
competitors, for example US financial services firms. For these firms, the CRD IV pay ratio only applies to their EU operations. Accordingly, the CRD
IV pay ratio creates a competitive disadvantage for Barclays in the global market for talent, particularly in the US, Asia and Africa. 60% of Barclays'
Code Staff in 2014 are expected to be based outside the EU.
Shareholder approval and remuneration compliance with the CRD IV pay ratio
We will comply with CRD IV’s remuneration provisions in a simple and transparent manner. We have discussed our approach with the PRA and
with some of our major shareholders. Our approach is legally compliant and based on the following principles:
 We do not want to increase fixed cost more than required
 We need to retain flexibility in our remuneration structure
 We must have the ability to be competitive on remuneration in the global environment in which we operate.
Barclays is seeking shareholder approval at the April 2014 AGM for the maximum CRD IV pay ratio of 2:1. A 2:1 ratio will limit the transfer from
variable to fixed pay required to continue to pay our employees competitively.
Role Based Pay (RBP)
Consistent with developing market practice, our approach to CRD IV remuneration compliance for the small number of impacted employees is a
new class of fixed pay called RBP which has the flexibility to be decreased as well as increased. Salaries can typically only be adjusted upwards.
The key features of RBP are as follows:
 It reflects the breadth and depth of responsibility associated with senior positions at Barclays
 It is fixed but will be reviewed (typically annually)
 It is paid monthly in cash alongside salary with effect from 1 January 2014 (excluding executive Directors and Group Executive Committee
members who will be paid quarterly in shares (or share equivalents where local law makes this necessary) and certain other senior employees
who will be paid partly in shares and partly in cash). The decision to pay in cash reflects the current very high levels of deferral within Barclays
which are significantly in excess of regulatory requirements and the market
 It can go down as well as up in certain circumstances, for example, following changes to role, responsibilities or accountabilities, or external
factors, such as changes in business and economic environment, which may have a bearing on the role in terms of equivalent market
opportunities or the particular skill set required for a role
 It is not adjusted for performance (individual, business or Group) and is not salary for pension and benefits purposes (except where required
under local law).
As a result of implementing RBP with a ratio of 2:1 we expect a small increase in fixed costs (and decrease in variable costs) for 2014. RBP will
represent a relatively small proportion of total compensation costs.
barclays.com/annualreport Barclays PLC Annual Report 2013 95
Remuneration report
Remuneration and CRD IV
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