FT Alphaville " A Bobcession on bonuses (or daylight bobbery) "In the usual way," "strength of opinion," etc. Barclays, ahead of its April 27 AGM: In the usual way, Barclays has had extensive engagement with a number of major shareholders over the course of the past few weeks regarding the remuneration report that was published on 9 March 2012. Recognising the strength of opinion expressed by some shareholders, via those meetings, and the Executive Directors" confidence in the future performance of the bank, consistent with public commitments and shareholders" expectations, Bob Diamond, Chief Executive and Chris Lucas, Group Finance Director have volunteered to subject their 2011 bonus awards, which were awarded all in shares and fully deferred over three years, to a further condition. That condition is as follows: that one-half (50%) of their deferred bonus award that may vest in each year will not pay out until Barclays return on equity exceeds its cost of equity and, if that condition is not met, the potential pay out caught by it will be subject to lapse if it is not met within three years from the date of the award. It has been agreed to apply this further condition... Achieving this target of 13% return on equity will allow the portion of post-tax profits that are distributed as dividends to normalise at a level much higher than today, and Barclays intends to continue to make steady progress towards that as the return on equity improves. The combination of higher earnings and a higher dividend payout ratio will allow a significant increase in the absolute level of dividends received by shareholders. ...Flip the bit in bold around. You could read this as Bob secures protection for half his bonus - which, as they say, is a lot of money - even if cost of equity exceeds ROE. Related links: Strong opinions from PIRC re Barclays bonuses - PIRC Get Carnwath! - FT Alphaville This entry was posted by Joseph Cotterill on Thursday, April 19th, 2012 at 13:27 and is filed under Capital markets. Tagged with barclays, bob diamond, UK banks.