HSBC 2011 Annual Report Download - page 263

261
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
The same deliberations and assessments with
regard to performance and adherence to HSBC
Values were undertaken by the Committee with
regard to the performance of AA Flockhart and
I J Mackay. These are summarised below.
A A Flockhart
The performance scorecard for A A Flockhart was
weighted 45% financial, 55% non-financial. In
aggregate, in assessing the quantum of the 2011
annual bonus against the theoretical maximum
opportunity of three times base salary, an overall
score of 66% of that maximum opportunity was
judged to have been achieved. The Committee
considered that performance against the financial
measures of Profit before Tax, Cost Efficiency and
Return on Risk-Weighted Assets had been met or
exceeded in CMB, Latin America and the Middle
East and North Africa. The performance in Europe
against these targets was below plan. Capital
Generation targets were met in Europe and Latin
America but were below target in the Middle East
and North Africa. The Committee considered that
good progress had been made against the non-
financial targets of Strategy Execution and People,
whilst the Project Merlin lending intentions had been
exceeded both in terms of total and SME facilities.
Notwithstanding strong management of the UK
business during the riots in the summer of 2011 and
the Middle East business during the political unrest
across the region, due to the incidence of the PPI
redress settlement and the mis-selling instances
uncovered at NHFA Limited, the Committee
determined that there could be no award under this
element of the scorecard.
I J Mackay
The performance scorecard for I J Mackay was
weighted 40% financial, 60% non-financial,
reflecting the nature of his responsibilities. In
aggregate, in assessing the quantum of the 2011
annual bonus against the theoretical maximum
opportunity of three times base salary, an overall
score of 52% of that maximum opportunity was
judged to have been achieved. The Committee
considered that performance against the financial
targets of Cost disciplines, Functional Operating
Costs and Capital and Liquidity Management had
been met or were in progress. The Committee
considered that performance against the non-
financial targets including People, Reporting and
Planning was in progress. With regard to
Compliance and Reputation, the incidence of the PPI
redress settlement, the mis-selling instances
uncovered at NHFA Limited and continuing legacy
legal and compliance issues in the US, the
Committee determined that there could be no award
under this element of the scorecard.
Annual bonus awards
2011 performance1 2010 performance
Non-deferred2 Deferred2 Non-deferred Deferred
Cash
Restricted
Shares Cash
Restricted
Shares Cash
Restricted
Shares Cash
Restricted
Shares
£000 £000 £000 £000 £000 £000 £000 £000
V H C Cheng3 ................ – – – – 142 142 213 213
D J Flint ......................... – – – – 560 560 840 840
A A Flockhart ................ – 770 – 1,156 362 362 542 542
S T Gulliver4 .................. – 862 – 1,294 – – – 5,200
I J Mackay ..................... – 434 – 652 12 12 18 18
1 The awards made in respect of 2011 performance will be delivered as described on page 259.
2 50% of the deferred and non deferred shares award are subject to a 6 month retention period.
3 Retired as a Director on 27 May 2011.
4 S T Gulliver requested that 100% of the award made to him in respect of 2010 performance be fully deferred in Restricted Shares
subject to the standard vesting and retention period.
Group Performance Share Plan
2010 awards
In determining the level of GPSP award granted on
23 June 2011, the Committee used the 2010
long-term performance scorecard detailed below.
The financial targets were commensurate with
the published targets for 2010. The assessment of
performance against the financial measures was
based upon the published outcome and the non-
financial performance represented the considered
view of the Committee.
In considering the overall performance against
the scorecard a simple approach was adopted. Each
measure in the financial targets section was given a
weighting of 15% of the total and each measure in
the non-financial section was given a weighting of
10%. Where individual targets consisted of a range,
a straight-line approach was applied, with 50%
weighting on entry to the range rising on a straight