Barclays 2015 Annual Report Download - page 86

84 I Barclays PLC Annual Report 2015 home.barclays/annualreport
Governance: Remuneration report
Annual statement from the Chairman of the Board Remuneration Committee
cycle. The Committee approved the grant of a share ‘buy-out’ award to
compensate him for an unvested share award granted to him by a
previous employer which was forfeited as a result of him joining Barclays.
The award was made on terms aligned to the forfeited award. Jes Staley
satisfied, at the date of joining, the executive Directors’ shareholding
requirement of four times salary through his personal purchase of
2,790,000 Barclays shares.
During the four month period between Antony Jenkins’ departure as
Group Chief Executive and Jes Staley starting in the role, John McFarlane
served as Executive Chairman. He indicated to the Committee that he
did not wish his remuneration to be increased during that time, and
therefore his fee remained unchanged for the period during which he
served as Executive Chairman.
The Committee also approved compensation arrangements on Antony
Jenkins’ departure as Group Chief Executive during the year. Further
details can be found on page 101.
Bonuses for both of the executive Directors in role at the start of 2015
were determined against the financial, Balanced Scorecard and personal
measures set at the beginning of the year. The Committee approved a
pro-rated 2015 bonus award of £505,000 for Antony Jenkins. A 2015
bonus award of £701,000 was approved for Tushar Morzaria. Tushar
Morzaria took on significantly increased executive responsibilities in the
second half of 2015 and we regard this bonus as fully deserved in
recognition of his strong performance. Further details of the
Committee’s 2015 decisions for the executive Directors are set out on
pages 93 and 94.
During the year, we also reviewed the performance measures of our LTIP
to ensure they are appropriate given our strategy and align the interests
of executive Directors and shareholders. We have changed the financial
measures and given them an increased weighting of 70% for the award
to be granted in 2016 and added a comprehensive Risk Scorecard as the
new risk measure which will focus on Barclays’ management of principal
risks (including Conduct Risk). Before formal approval, we engaged with
shareholders on these changes. Tushar Morzaria is the only participant
in this LTIP cycle. Further details are set out on page 95.
Regulatory developments
The volume and pace of regulatory change has continued during 2015.
The PRA made revisions to the Remuneration part of its Rulebook
(formerly the UK Remuneration Code) which apply from 1 January 2016.
These include the seven, five and three year ‘tiered’ deferral
requirements for Senior Managers and different categories of Material
Risk Taker (MRT) respectively, and the potential extension of the
clawback period to 10 years for Senior Managers (under certain
circumstances). These changes, which apply globally to Barclays as
a UK-headquartered bank, further emphasise the competitive
disadvantages attributable to the lack of a global level regulatory
‘playing field’.
Further revisions to the Remuneration part of the PRA Rulebook are
expected during 2016 as a consequence of the European Banking
Authority’s (EBA) final Guidelines on sound remuneration policies.
The most significant changes include a prohibition on the payment of
dividends on deferred shares and an increase to a one year (from six
months) holding period for incentive awards delivered in shares to the
large majority of MRTs. The Guidelines apply from 1 January 2017. The
application of the Guidelines to UK firms, once confirmed by the PRA
and FCA, will contribute to changes to our Directors’ remuneration policy
in 2017.
Agenda for 2016
In line with legal requirements, we will be seeking shareholder approval
for our Directors’ remuneration policy at the 2017 AGM. As a Committee,
we will review our remuneration policy to ensure that future
arrangements are fully aligned to our strategy to accelerate delivery to
shareholders in a manner consistent with Barclays’ Values and also to
meet new regulatory requirements. This will be developed over the
coming months and we will engage constructively with shareholders
and regulators as we do so.
Our Remuneration report
We have provided an ‘At a glance’ summary of 2015 performance and
pay on the next page. The Annual report on Directors’ remuneration
provides further details.
The report has been prepared in accordance with the remuneration
disclosures required by the Large and Medium-sized Companies and
Groups (Accounts and Reports) (Amendment) Regulations 2013. The
Remuneration report (other than the part containing the Directors’
remuneration policy) will be subject to an advisory vote by shareholders
at the 2016 AGM.
On behalf of the Board
Crawford Gillies
Chairman, Board Remuneration Committee
29 February 2016