Barclays Africa execs score another R156m for loyalty in selldown

Barclays Africa Group executives have been granted restricted share awards (RSAs) to the value of R156 million “to retain skills critical during the separation [from Barclays Plc] and beyond”. This is disclosed in the group’s 2017 integrated report, published on March 29.

The RSAs were awarded to 53 “key employees… including executive directors and prescribed officers” on October 1, 2017 with a two-year performance period. The published performance conditions are as follows:

• Individual performance rating of ‘strong’ or above through to the end of the performance period – this will be measured through key business and individual objectives, including a participant’s contribution to the separation;
• Participant remaining an employee of Barclays Africa or Barclays PLC and not being under notice when the payment, award or recommendation is made; and
• The employee not being under investigation or suspension when the award is made.

This follows the grant of the first tranche of RSAs related to the selldown in 2016. These, granted to 74 key employees, are worth R191 million and run until September 30.

Barclays Africa says “no further restricted share awards will be made in 2018”.

Group chief executive Maria Ramos, deputy chief executive: South Africa Banking David Hodnett, and financial director Jason Quinn received the same award of RSAs under this plan as in 2016. These are worth R8 million, R7 million and R3 million, respectively. Deputy chief executive: Africa Banking Peter Matlare (appointed on August 1, 2016) did not receive any restricted shares in 2016 or 2017. Prescribed officer Nomkhita Nqweni, chief executive: Wealth, Investment Management and Insurance received RSAs worth R3 million (the same as in 2016).

Excluding the executive directors and prescribed officer above, the mean value of the RSAs granted in 2017 to the other “49 key employees” is R2.755 million.

These are not the only incentives related to the separation from Barclays Plc. The group paid a total of R184 million in bonuses “related to the … selldown” during 2017. This is more than double the R82 million separate bonus pool related to the separation in 2016. In its Remuneration Report, Barclays Africa says:

“The separation bonus pool included additional highly-skilled resources specifically hired for the project, particularly in the IT function. 334 employees were dedicated full-time to the separation. The separation bonus is a temporary pool, which will cease once the separation has been achieved.”

The total incentives granted by the group in 2017 was R2.798 billion, of which R2.322 billion was the annual bonus pool (non-deferred and deferred). Out of the group’s 40 026 permanent employees, 37 358 received a bonus.

Source: Barclays Africa Integrated Report

Aside from the RSAs, the executives were also granted long-term incentive plan awards worth more than R90 million. These are measured over a three-year period on a number of financial and strategic criteria. Ramos was granted R24 million (159% of her fixed remuneration) under this plan, Hodnett was granted R21 million (175% of fixed pay), Matlare R19.5 million (195% of fixed pay), Quinn R14 million (264% of fixed pay), and Nqweni R14 million (187% of fixed pay). There were no long-term incentive awards between 2014 and 2016.

In 2017, shareholders raised a number of concerns around remuneration matters, including the fact that “success in separating from Barclays PLC should be a factor in the long-term incentive plan conditions”. In response, the group says “the 2017 long-term incentive plan metrics incorporate a strategic measure, which includes progress against organisational objectives such as the separation”.

A total of 24.25% of Barclays Africa shareholders voted against the non-binding advisory resolution on its remuneration policy at the 2017 AGM. In 2016, the number of votes against was 18.63%. In the Remuneration Report, it says: “We seek to improve this result and have made our comprehensive disclosure more transparent to enable active and extensive engagement with our shareholders.”

Given the selldown by Barclays Plc (Barclays Africa will “achieve regulatory deconsolidation” from its former parent in 2018), it says: “We are developing a new remuneration policy, which will underpin our strategy, entrepreneurial culture and risk management approach. The reward policy is being informed by issues raised by our institutional investors and changing regulatory landscape, and we will continue our active engagement with shareholders as this progresses.”

Hilton Tarrant can still be contacted at hilton@moneyweb.co.za

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