HSBC 2012 Annual Report Download - page 353

351
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
Summary of remuneration policy
The following remuneration policy for Directors is
subject to a binding shareholder vote every three
years commencing with the 2013 financial year. The
section on service contracts and exit payments is
also subject to the binding vote and can be found on
page 359.
Purpose and link to strategy Operation and planned changes to policy Opportunity and performance metrics
Fixed pay
Takes account of experience and
p
ersonal contribution to the
individual’s role.
No fixed pay increases are proposed for executive
Directors in 2013.
n/a
Benefits
Takes account of local market
p
ractice.
Benefits include the provision of medical insurance,
other insurance cover, tax return preparation and
travel assistance. No changes were made to
HSBC’s benefits policy during the year.
n/a
Annual incentive1
D
rives and rewards performance
against annual financial and
non-financial measures and
adherence to HSBC Values
which are consistent with the
medium to long-term strategy.
Awards are delivered in the form of cash and shares
with the structure and deferral meeting the FSA
Remuneration Code requirements.
The total vesting period of deferred awards will be
no less than 3 years as mandated under the FSA
Remuneration Code. Where the total vesting period
is three years the share awards will be subject to a
six month retention period upon vesting.
Maximum incentive is three times fixed pay.
Performance is measured against an annual
scorecard, based on a mixture of financial and
non-financial measures. The scorecards vary by
individual. Further detail on each scorecard for
the most recent awards can be found on page 355.
The policy for determining awards is set out on
page 352.
Group Performance Share
Plan (‘GPSP’)1
Incentivises sustainable long-
term performance and alignment
with shareholder interests.
Award levels are determined by considering
performance up to the date of grant against
enduring performance measures set out in the
long-term performance scorecard.
The award is subject to a five-year vesting period
during which the Committee has the authority to
claw back all or part of the award. See page 353
for more details on clawback.
On vesting, the shares (net of tax) must be retained
until the participant retires.
Maximum award is six times fixed pay.
The long-term scorecard against which
performance will be assessed in 2013 is detailed
below. The 2013 scorecard remains consistent
with 2012. Overall performance is to be judged on
performance outcomes and adherence to HSBC
Values being a gating mechanism. See page 356
for further details.
Pension No pension changes proposed for 2013. n/a
Non-executive Director Non-executive Directors receive only fees and are
not eligible to receive benefits, pension or any
annual or long-term incentives.
The current fee, which was approved by
shareholders in 2011, is £95,000 per annum. A fee
of £45,000 per annum is payable to the senior
independent non-executive Director. In addition,
non-executive Directors received the following fees
for service on Board Committees:
• Group Audit, Group Risk, Group Remuneration
and Financial System Vulnerabilities
Committees:
– Chairman: £50,000
– Member: £30,000
• Nomination and Corporate Sustainability
Committees:
– Chairman: £40,000
– Member: £25,000
n/a
1 This approach applies to all executive Directors with the exception of the Group Chairman, D J Flint, who, from 2011, is not eligible for
an annual incentive and is not expected to be granted awards under the GPSP other than in exceptional circumstances.