Banking StandardsLetter from Sir David Walker, Chairman, Barclays
I am writing in response to your letter of 4 April about the share releases that Barclays announced on 20 March 2013.
In respect of the timing of the relevant announcement, I welcome this opportunity to set out the facts and process that led to this particular timing. The public announcement covered share releases made on 18 March 2013 to Barclays Directors and Persons Discharging Managerial Responsibilities (PDMRs) and accompanied a much broader vesting of shares for colleagues at other levels in the group.
A large portion of the deferred share awards scheduled for release on 18 March 2013, were granted in March 2012. It was in March last year, therefore, that Barclays indicated the release date of 18 March 2013 in the formal award communication to employees.
In November 2012, the Employee Incentives Financing Committee, which arranges for the provision of shares for releases such as these, confirmed 18 March 2013 as the release date for all awards scheduled to be released in March 2013 (except those with a contractual release date of 5 March 2013) and that the required Regulatory News Service (RNS) announcement should be issued on Wednesday 20 March 2013. This was in accordance with our obligations under the Disclosure and Transparency Rules, requiring us to notify the market by no later than the end of the business day following receipt of the relevant information in respect of the release of shares (ie by no later than 20 March 2013). Following the release (on 18 March 2013), sufficient time is needed to allow for final numbers to be confirmed including the number of shares sold for the satisfaction of tax and social security liabilities. This timing was consistent with the release of information in previous years. A copy of the paper presented to the Employee Incentives Financing Committee in November 2012, confirming the release date of 18 March 2013 and the RNS date for 20 March 2013, is attached. All of these decisions were taken prior to the announcement, on 11 December 2012, that the date of the Budget was to be 20 March 2013.
Notification of the share release was made via an RNS announcement to the London Stock Exchange. Far from seeking to conceal the release of this information, we distributed it proactively, including emailing the press release to over 200 journalists. The story was covered in every national newspaper the following day. Against this background, the suggestion that the release of this information on the same day as the Budget was designed to minimise media attention is altogether without foundation.
The Board Remuneration Committee reviewed very closely 2012 remuneration for the Directors and PDMRs and the release of unvested deferred remuneration to them. As previously confirmed, Antony Jenkins, Chris Lucas and Rich Ricci did not receive a bonus award for 2012. The Directors and PDMRs were also impacted by the risk adjustments implemented by the Board Remuneration Committee in 2012. As noted in our 2012 Annual Report, the Board Remuneration Committee made risk adjustments in 2012 of £1.16 billion. This included a reduction of £860 million to the 2012 incentives pool to reflect risk and compliance events during 2012 (including LIBOR, PPI and interest–rate product sales). It also included a reduction of £300 million in unvested deferred and long term awards.
In respect of the awards made to Rich Ricci and Tom Kalaris, as you know, and for the reasons set out in my 2009 report on bank governance, referenced in my earlier letter of 14 March, we have and continue to eschew disclosure of further remuneration detail in respect of individual executives below board level. I can, however, confirm that the majority of the shares released to these two executives, as indicated in the announcement, related to:
releases of deferred share bonuses relating to the performance years from 2007 to 2011; and
releases of vested long term incentive awards relating to performance periods commencing in 2009.
The value of these releases as of 18 March 2013 was disclosed in the announcement, in line with the Disclosure and Transparency Rules.
19 April 2013
