Barclays 2015 Annual Report Download - page 85

home.barclays/annualreport Barclays PLC Annual Report 2015 I 83
Governance: Remuneration report
Annual statement from the Chairman of the Board Remuneration Committee
Dear Shareholders
I am pleased to introduce my first Remuneration report as Chairman of
the Board Remuneration Committee, having taken over from Sir John
Sunderland on 24 April 2015.
The Committee thought carefully about Barclays’ remuneration
philosophy during 2015, and we agreed a revised, simplified statement,
which articulates Barclays’ overarching approach to remuneration. This is
set out in full on page 86 and is the background to our 2015 decisions.
The 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.
Key remuneration decisions for executive Directors
2015 saw a change in Group Chief Executive. All of the associated
remuneration decisions were made in accordance with the Directors’
remuneration policy approved by our shareholders at the 2014 Annual
General Meeting (AGM).
We announced on 28 October 2015 that Jes Staley was to become
Group Chief Executive with effect from 1 December 2015. He was
appointed on a salary of £1,200,000 and Role Based Pay of £1,150,000
commensurate with market pay levels. He was not eligible for a 2015
bonus or a grant under the 2016-2018 long term incentive plan (LTIP)
‘The 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.’
Remuneration Committee members
Chairman
Crawford Gillies (member from 1 May 2014,
Chairman from 24 April 2015)
Sir John Sunderland (until 23 April 2015)
Members
Sir David Walker (until 23 April 2015)
Tim Breedon
Steve Thieke
Dambisa Moyo (from 1 September 2015)
Contents Page
Annual statement 83
At a Glance – Performance and pay 85
Remuneration policy for all employees 86
2015 incentives 88
Annual report on Directors’ remuneration 92
Additional remuneration disclosures 105
Directors’ remuneration policy (abridged) 108
The tables marked ‘audited’ in the report have been audited by
PricewaterhouseCoopers LLP
The Strategic Report Governance Risk review Financial review Financial statements Shareholder information