Barclays 2015 Annual Report Download - page 90

88 I Barclays PLC Annual Report 2015 home.barclays/annualreport
Governance: Remuneration report
2015 pay and performance headlines
The key performance considerations which the Committee took into account in making its remuneration decisions for 2015 are highlighted below:
 Group adjusted profit before tax was down 2% to £5,403m (2014: £5,502m) while the Investment Bank adjusted profit before tax was up 17% at
£1,611m (2014: £1,377m)
 Group statutory profit before tax was down 8% at £2,073m (2014: £2,256m)
 the CET1 ratio was up to 11.4% (2014: 10.3%)
 the leverage ratio was up to 4.5% (2014: 3.7%)
 Balanced Scorecard – progress has been made against the Balanced Scorecard in respect of 2018 targets. Full details of 2015 performance against
the eight key measures within the Scorecard are set out on page 11.
The pay outcomes and decisions can be summarised as follows:
 the Group compensation to adjusted net income ratio improved to 37.2% (2014: 37.7%). The Core compensation to adjusted net income ratio also
improved to 34.7% (2014: 35.7%)
 total compensation costs decreased 6% to £8,339m (2014: £8,891m). Total compensation costs in the Investment Bank were down 5% at
£3,423m (2014: £3,620m)
 total incentive awards granted were £1,669m, down 10% on 2014. Investment Bank incentive awards granted were £976m, down 7% on 2014
 there has been strong differentiation on the basis of individual performance to allow the Group to more effectively manage compensation costs
 average value of incentive awards granted per Group employee is £12,900 (2014: £14,100) and the average value of incentive awards granted per
Investment Bank employee is £46,500 (2014: £51,400)
 levels of bonus deferral continue to significantly exceed the minimum requirements in the Remuneration part of the PRA Rulebook and are
expected to remain among the highest deferral levels globally. 2015 bonuses awarded to Managing Directors in the Investment Bank were again
100% deferred.
2015 pay – Questions and answers
How do you justify a 2015 incentive pool of £1,669m?
The Committee remains focused on aligning pay to performance and setting pay at a level which is no more than necessary but is motivational to
ensure that we accelerate the delivery of shareholder value.
In line with our financial performance, the final 2015 incentive pool at £1,669m is down 10% on 2014.
The following chart illustrates the reduction in variable remuneration over the period from 2010.
Group
Investment Bank
£3,484m
(52%)
(63%)
£2,660m
2010
£1,378m
£2,378m
2013
a
2014
b
2015
£1,053m
£1,860m
£976m
£1,669m
Barclays incentive pools
£2,578m
2011
£1,737m
£2,168m
2012
£1,394m
Notes
a 2013 Investment Bank incentive pool has been restated from £1,574m to reflect the business reorganisation. The 2010, 2011 and 2012 Investment Bank incentive pools have
not been restated.
b Part of the reduction in incentive pools in 2014 was due to the introduction of Role Based Pay.
2015 incentives
This section provides details of how 2015 total incentive award decisions were made.