5th Mar 2014 17:32
LONDON (Alliance News) - Barclays PLC Wednesday revealed that it will increase fixed pay because it needs to remain competitive outside the UK amid new EU rules that put a cap on bonuses.
In its annual report Barclays said it will pay Chief Executive Antony Jenkins, "role based pay" of GBP950,000 in 2014, on top of his unchanged GBP1.1 million salary. His maximum possible bonus will fall to GBP1.9 million from GBP2.8 million, while the shares he could receive under Barclays' long-term incentive plan will fall to GBP2.9 million from GBP4.4 million. Jenkins waived his 2013 bonus.
Finance Director Tushar Morzaria will be paid an unchanged GBP800,000 salary and GBP750,000 in "role based pay." His maximum possible bonus falls to GBP1.4 million from GBP2.0 million and the maximum number of shares he can receive under the long-term incentive plan will fall to GBP2.1 million from GBP3.2 million.
Salary, pension, benefits and role-based pay will make up the fixed element of the total remuneration package, while the annual bonus and the long-term incentive plan will make up the variable remuneration. Role-based pay will be paid quarterly in shares which will be subject to a holding period with restrictions lifting over five years, set at 20% each year. Executive directors will be entitled to receive dividends on the shares.
The EU's new rules cap bonuses at 100% of salary or 200% with shareholder approval but the sector has been lobbying hard to have the rules changes, with the UK government launching a legal challenge to the rule.
Banks have argued that the bonus cap restricts their competitiveness in their operations outside of the EU, where the cap does not apply.
Barclays said it is seeking shareholder approval to pay a maximum ratio of variable to fixed pay of 2:1 in order, which it says will enable it to keep the rise in fixed costs to a minimum.
John Sunderland, who chairs Barclays' Remuneration Committee, said the immediate challenge had been to find the right balance.
"The immediate challenge for the board Remuneration Committee and board for 2013 was to find the right practical balance between the need to give shareholders a greater share of the income we generate, to bear down on costs, and to meet society?s expectations without eroding the long-term competitiveness of the investment bank, and thus damaging the interests of our shareholders. Whilst the conclusion reached was an extremely difficult one, we believe that it was the right decision for shareholders in the long term," Sutherland said in the report.
Barclays was hit with scathing attacks from commentators and the public alike after increasing its bonus pool to about GBP2.38 billion, from GBP2.17 billion in 2012.
Barclays shares were Wednesday quoted at 252.25 pence, down 0.3%.
By Samuel Agini; [email protected]; @samuelagini
Copyright © 2014 Alliance News Limited
Related Shares:
Barclays