Barclays 2015 Annual Report Download - page 30

28 I Barclays PLC Annual Report 2015 home.barclays/annualreport
201 11,079m
2011 – £10,523m
2012 – £9,759m
2013 – £9,616m
2014 – £8,891m
2015 – £8,339m
71,886 – £0-25k
53,000 – £25k-£100k
12,930 – £100k-£1m
323 – £1m+
Continued focus
on aligning reward
and performance
Distribution of 2015 remuneration to Group employees by banding
Barclays Group compensation costs
Running the Company well
…with a relevant and balanced
remuneration framework…
2015 incentives
The Board Remuneration Committee’s priorities are to ensure that
Barclays pays for sustainable performance, aligns remuneration with risk
and delivers a greater proportion of the income we generate to our
shareholders.
Performance and pay
The Committee’s 2015 pay decisions took full consideration of financial
performance, both on an adjusted and a statutory basis, and non-
financial performance including progress towards the 2018 targets
within the Balanced Scorecard. The Committee also recognised the need
to improve returns to shareholders and to accelerate delivery. We are
committed to moving this forward in a manner that is consistent with
Barclays’ Values to ensure that legacy events are not repeated.
Although there were improvements in the Core operating businesses
with Core adjusted profit before tax up 3%, Group adjusted profit before
tax was down 2% to £5,403m for 2015. Group statutory profit before tax
was down 8% at £2,073m. The Group’s capital position has continued to
strengthen with a CRD IV fully loaded Common Equity Tier 1 (CET1)
ratio of 11.4% and a leverage ratio of 4.5% at the end of the year. Cost
targets have been met and Barclays Non-Core has made significant
progress in reducing its risk weighted assets.
Against this background, the Group incentive pool for 2015 is again
significantly lower than in prior years, down by £191m or 10% in absolute
terms at £1,669m compared to the incentive pool of £1,860m for 2014.
Similarly, the 2015 Investment Bank incentive pool is down 7%, despite
the Investment Bank’s adjusted profit before tax increasing by 17%.
Total compensation costs are down 6%, and the compensation to
adjusted net income ratio is 37.2%, down from 37.7% in 2014. The Core
compensation to adjusted net income ratio is also down at 34.7%
(2014: 35.7%).
Risk and conduct
A central feature of our remuneration philosophy is that remuneration
must be aligned with risk, and with the conduct expectations of Barclays,
our regulators and stakeholders. The Group incentive pool outlined
above is after adjustments the Committee has made for both risk and
conduct events. In addition to specific risk and conduct events, we also
adjusted the incentive pool to take account of an overall assessment of
a wide range of future risks, non-financial factors that can support the
delivery of a strong conduct culture and other factors including
reputation, impact on customers, markets and other stakeholders.
We have a robust process for considering risk and conduct issues as part
of individual performance management reviews with outcomes reflected
in individual incentive decisions. Individuals who are directly or indirectly
accountable for risk and conduct events have had their remuneration
adjusted as appropriate. This includes reductions in current year bonus
levels and reductions in vesting amounts of deferred awards through the
application of malus. Further details can be found on page 89.
We remain focused on
paying for performance
while continuing to deliver
a greater share of the income
we generate to shareholders