HSBC 2015 Annual Report Download - page 317

HSBC HOLDINGS PLC
315
Strategic Report Financial Review Corporate Governance Financial Statements Shareholder Information
Shareholder context
The table below shows the outcome of the remuneration-related votes at the AGM held on 24 April 2015 and the last policy
vote at the AGM held on 23 May 2014.
Number of
votes cast For Against Withheld
Advisory vote on 2014 Remuneration Report 8,808,959,472 6,720,428,674
(76.29%)
2,088,530,798
(23.71%)
677,821,869
Binding vote on the Remuneration Policy 9,781,954,191 7,762,051,505
(79.35%)
2,019,902,686
(20.65%)
167,509,544
At the AGM on 24 April 2015, investors who voted against
the 2014 remuneration report expressed concerns with
the level of cash in lieu of pension and the structure and
measurement of performance outcome in the annual
incentive and GPSP scorecard. The Committee chairman
met with representative group of shareholders to discuss
these concerns.
Taking on board investor concerns, the Committee reduced
the cash in lieu of pension for executive Directors from 50%
of base salary to 30% of base salary from 1 January 2016.
This reduces the fixed pay of all executive Directors and
also the maximum variable pay potential for the executive
Directors due to the regulatory variable pay cap limiting
the variable pay to 200% of fixed pay.
We have also changed the approach to our long-term
incentive going forward so that awards are subject to
three-year forward-looking performance period in line with
FTSE practice. This change in approach brings clearer and
greater alignment between the scorecard outcome and
the achievement of our group strategic objectives, our
performance and shareholder value creation. The annual
and long-term incentive scorecards are provided below.
Implementation of remuneration policy in 2016 for executive Directors
The table below summarises how each element of pay will be implemented in 2016.
Operation and planned changes to policy
Douglas Flint Stuart Gulliver Iain Mackay Marc Moses
Element of pay
Fixed pay
Base salary £1,500,000 £1,250,000 £700,000 £700,000
Fixed pay allowance Nil £1,700,000 £950,000 £950,000
Pension 30% of base salary 30% of base salary 30% of base salary 30% of base salary
Benefits
Benefits Addition of post-departure benefits to support obligations under the Senior Managers Regime for up to
seven years from departure.
Variable pay
Annual incentive Not eligible • Awards delivered in shares, subject into a minimum six-month retention period.
• Maximum opportunity will be 213% of base salary.
Long-term incentive Not eligible • Awards made in shares, subject to a three-year performance period from
1 January 2017.
• Awards will vest pro rata over five years, with the first vesting in 2020.
• A retention period may be applied to ensure compliance with regulatory
requirements.
• Maximum opportunity will be 319% of base salary.
Annual bonus scorecards
The weightings and performance measures to apply to the
2016 annual incentive for Stuart Gulliver, Iain Mackay and
Marc Moses are disclosed. These align to the Group’s
strategic and financial objectives set out in June 2015.
The performance targets for the annual incentive are
commercially sensitive and it would be detrimental to the
interests of the Group to disclose them before the start of
the financial year. Subject to commercial sensitivity, we will
disclose the targets after the end of the relevant financial
year in that year’s remuneration report.