HSBC 2012 Annual Report Download - page 361

359
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
Service contracts and exit payments
Our policy is to employ executive Directors on one
year rolling contracts although longer initial terms
may be approved by the Committee if considered
appropriate. The Committee will, consistent with
the best interests of the Group, seek to minimise
termination payments.
Director Contract date
(rolling)
Notice period
(Director & HSBC)
Compensation on termination by the company without
notice or cause
D J Flint 14 February 2011 12 months Payment in lieu of notice equal to fixed pay, pension
entitlements and other benefits.
A A Flockhart¹ 14 February 2011 12 months Payment in lieu of notice equal to fixed pay, pension
entitlements and other benefits. Eligible to be considered
for a variable pay award upon termination of employment
other than where the executive has resigned or the
Company has terminated the executive’s employment with
the contractual right to do so.
S T Gulliver2 10 February 2011 12 months Payment in lieu of notice equal to fixed pay, pension
entitlements and other benefits. Eligible to be considered
for a variable pay award upon termination of employment
other than where the executive has resigned or the
Company has terminated the executive’s employment with
the contractual right to do so.
I J Mackay 4 February 2011 12 months Payment in lieu of notice equal to fixed pay, pension
entitlements and other benefits. Eligible to be considered
for a variable pay award upon termination of employment
other than where the executive has resigned or the
Company has terminated the executive’s employment with
the contractual right to do so.
1 Service contract terminated on 30 April 2012 – the date of retirement as an executive Director.
2 The other benefits as part of the payment in lieu of notice do not include the accommodation and car provided in Hong Kong.
Exit payments made in year
A A Flockhart retired for health reasons as an
executive of the Group and from his position as
Chairman of Europe, Middle East, Africa, Latin
America, Commercial Banking on 30 April 2012.
A A Flockhart remained on the Board up to 31 July
2012 in a non-executive Director capacity. Upon
retirement on 30 April 2012, A A Flockhart received
no compensation for loss of office other than
contractual retirement benefits and was granted
good leaver status on his unvested deferred cash and
share awards as per the HSBC Share Plan rules.
Subject to the terms of the Plan, the awards will vest
in line with the vesting schedule at time of grant.
Share ownership guidelines
To ensure appropriate alignment with our
shareholders, we operate a formal share ownership
policy, expressed as a number of shares, for
executive Directors and Group Managing Directors.
The Committee considers that material share
ownership by executives creates a community
of interest between senior management and
shareholders.
Under the existing guidelines, the
shareholding is expected to be achieved within
five years of the executive’s appointment. All
executive Directors exceed the expected holdings.
Shareholding requirements for the Group executive
Directors and Group Managing Directors are set
out below. The Directors’ shareholdings at
31 December 2012 are also set out below. There
are no shareholding requirements for non-executive
Directors.