Barclays is set to unveil significant changes to its remuneration policies at its annual general meeting next month.
In its 2008 annual report, published this week, the bank highlighted proposals to revise its remuneration policy to accentuate risk management and the role of behaviours that determine it. The bank has revealed plans to increase the shareholding requirements for executive directors, as well as make 15,000 senior employees increase the proportion of their remuneration to be paid over multiple years.
Barclays will be engaging its shareholders in dialogue and consultation as it develops these proposals, which follow a review of remuneration conducted last year. An update on how the plans are progressing will be given at the bank’s next annual general meeting, which will be held in London on 23 April.
Barclay’s 2008 annual report stated: “The objective of the review was to assess how the pay for performance culture and alignment with shareholders could be strengthened further. As the review advanced it became clear that the mandate ought to be extended to incorporate a broader industry-wide review of remuneration.
“The review is continuing and will address detailed remuneration plans and proposals which will be developed during 2009. The challenge for the industry is to use this period to develop robust remuneration structures that balance commercial enterprise with risk in the interests of all stakeholders.”†
In 2008, Barclays delivered a profit of £6,077million, 14% lower than in 2007. Variable pay for the group reduced by 48% from 2007. Executive directors did not receive an annual performance bonus for 2008 or increase in salary for 2009.†
It was also decided that executive directors who have long-term performance shares due to be released in 2009 shall agree that these be deferred for a further two years and subject to additional financial performance over that period. Long-term awards in 2009 are 64% lower than last year,with no awards given to the chief executive and president.