HSBC 2011 Annual Report Download - page 258

HSBC HOLDINGS PLC
Directors’ Remuneration Report
Group Remuneration Committee // Members and advisers / Reward strategy > Overview / 2011 performance summary
256
Report of the Group
Remuneration Committee
Members and advisers .................................................. 256
HSBC’s reward strategy ............................................... 256
Regulation ..................................................................... 259
Executive Directors’ remuneration .............................. 259
Non-executive Directors ............................................... 268
Employee compensation and benefits .......................... 269
Pensions ........................................................................ 271
Share Plans ................................................................... 272
Group Remuneration Committee
Within the authority delegated by the Board, the
Group Remuneration Committee (‘the Committee’)
is responsible for approving the Group’s
remuneration policy. The Committee also determines
the remuneration of Directors, other senior Group
employees, employees in positions of significant
influence and employees whose activities have or
could have an impact on our risk profile and in doing
so takes into account the pay and conditions across
our Group.
No Directors are involved in deciding their own
remuneration.
Members and advisers
The members of the Committee during 2011 were
J D Coombe, W S H Laidlaw, G Morgan and
J L Thornton.
There were nine meetings of the Committee
during 2011. The table on page 238 gives details of
Directors’ attendance at these meetings.
The Committee has decided to not use advisers
except in exceptional circumstances. No external
advisers were used by the Committee during 2011.
During the year, the Group Chief Executive provided
regular briefings to the Committee and the
Committee received advice from the Group
Managing Director, Group Head of Human
Resources and Corporate Sustainability, A Almeida,
the Group Head of Performance and Reward,
T Roberts and the Group Chief Risk Officer,
M M Moses.
The Committee also received advice and
feedback from the Group Risk Committee on risk-
related matters relevant to remuneration and the
alignment of remuneration with risk appetite.
HSBC’s reward strategy
The quality and commitment of our human capital is
deemed fundamental to our success and accordingly
the Board aims to attract, retain and motivate the
very best people. As trust and relationships are vital
in our business our broad policy is to recruit those
who are committed to making a long-term career
with the organisation.
HSBC’s reward strategy supports this objective
through focusing on both short-term and sustainable
performance over the long-term. It aims to reward
success, not failure, and be properly aligned with
risk.
In order to ensure alignment between
remuneration and our strategy, individual
remuneration is determined through assessment
of performance delivered against both annual and
long-term objectives summarised in performance
scorecards and adherence to the HSBC Values of
being ‘open, connected and dependable’ and acting
with ‘courageous integrity’. Altogether, performance
is judged, not only on what is achieved over the short
and medium term, but also on how it is achieved, as
the latter contributes to the sustainability of the
organisation.
The financial and non-financial measures that
comprise the annual and long-term scorecards are
carefully considered to ensure alignment with the
long-term strategy of the Group.
Overview of remuneration
In order to ensure clarity over remuneration, there
are just four elements of remuneration, two of which
are performance related. These are:
• fixed pay;
• the annual bonus;
• the Group Performance Share Plan (the new
long-term incentive plan of the HSBC Share
Plan 2011); and
• benefits.
The Group Performance Share Plan (‘GPSP’)
was developed over 2010 and 2011 to incentivise
senior executives to deliver sustainable long-term
business performance. A key feature of the GPSP
is that participants are required to hold the awards,
once they have vested, until retirement, thereby
enhancing the alignment of interest between the
senior executives of the Group and shareholders.