Annual Financial Report - 25

RNS Number : 4122J

HSBC Holdings PLC

30 March 2010

 



Directors' 2009 remuneration

The remuneration of the Group Chairman and executive Directors of HSBC Holdings for 2009 was as follows:

	V H C Cheng				D J Flint				A A Flockhart				M F Geoghegan				S K Green				S T Gulliver
	2009		20081		2009		2008		2009		20081		2009		2008		2009		2008		2009		20081
£000
(Audited)
Salary .....................	769		534		700		700		662		229		1,070		1,070		1,250		1,250		800		533
Allowances2 ............	191		67		394		394		-		-		548		544		8		8		8		5
Benefits in kind2,3 ...	663		545		8		13		437		355		57		53		4		7		18		9
(Unaudited)
Bonus (deferred)4 ....	1,240		1,639		2,100		-		1,908		1,655		4,000		-		-		-		9,000		-
(Unaudited)
Total remuneration5 ................................	2,863		2,785		3,202		1,107		3,007		2,239		5,675		1,667		1,262		1,265		9,826		547
(Audited)
Total emoluments6 .	1,623		1,146		1,102		1,107		1,099		584		1,675		1,667		1,262		1,265		826		547
US$000
(Unaudited)
Total remuneration5 ................................	4,466		5,108		4,995		2,030		4,691		4,106		8,852		3,057		1,969		2,320		15,327		1,003
(Audited)
Total emoluments6 .	2,532		2,102		1,719		2,030		1,714		1,071		2,613		3,057		1,969		2,320		1,288		1,003

1  The comparative emoluments figures in respect of 2008 are for the period from the date of appointment of the Director (V H C Cheng, 1 February 2008; and A A Flockhart and S T Gulliver, 1 May 2008).

2  Allowances include an executive allowance paid to fund personal pension arrangements and a company car allowance. Following the categorisation of the company car benefit in 2009 as an allowance and not a benefit in kind, the comparative figures for 2008 for D J Flint, M F Geoghegan, S K Green and S T Gulliver have been adjusted accordingly.

3  Benefits in kind include provision of medical insurance, other insurance cover, accountancy advice and travel assistance. V H C Cheng and A A Flockhart receive housing and other benefits in kind that are normal within the location in which they are employed.

4  These deferred bonuses represent 100 per cent of the annual bonus in respect of 2009, all of which will be deferred into awards of HSBC Holdings Restricted Shares. See page 338 for further details of the deferral and vesting arrangements.

5  Total remuneration, pursuant to the UK Listing Rules, includes deferred bonuses.

6  Total emoluments, pursuant to the UK Companies Act 2006, exclude the annual bonus that has been deferred and is not receivable for at least a further 12 months.

The total of fees paid to each of the non-executive Directors of HSBC Holdings for 2009, being emoluments for the purposes of the Companies Act 2006, is as follows:

	2009		2008
(Audited)	£000		£000
S A Catz ..............................................................................................................................	65		43
M K T Cheung1 ..... ..............................................................................................................	89		-
J D Coombe ........................................................................................................................	105		105
J L Durán ............................................................................................................................	65		65
R A Fairhead .......................................................................................................................	135		127
W K L Fung2 ... ....................................................................................................................	132		122
J W J Hughes-Hallett ...........................................................................................................	105		105
W S H Laidlaw ....................................................................................................................	85		77
J R Lomax3 .........................................................................................................................	82		5
Sir Mark Moody-Stuart .......................................................................................................	125		125
G Morgan ............................................................................................................................	85		85
N R N Murthy .....................................................................................................................	85		45
S M Robertson ....................................................................................................................	115		115
J L Thornton4 ..... ................................................................................................................	1,040		89
Sir Brian Williamson ...........................................................................................................	95		95
Total ..................................................................................................................................	2,408		1,203
Total (US$000) ..................................................................................................................	3,756		2,206

1  Appointed a Director of HSBC Holdings on 1 February 2009. Includes fees as a non-executive Director and member of the Audit Committee of Hang Seng Bank Limited.

2  Includes fees as non-executive Deputy Chairman of The Hongkong and Shanghai Banking Corporation Limited.

3  Appointed a Director of HSBC Holdings on 1 December 2008. The comparative figure in respect of 2008 is for the period from the date of appointment.

4  Appointed a Director of HSBC Holdings on 1 December 2008. The comparative figure in respect of 2008 is for the period from the date of appointment as a Director. Includes fees as non-executive Chairman of HSBC North America Holdings Inc.

Pensions

(Audited)

V H C Cheng is a member of the Hong Kong Special Administrative Region Mandatory Provident Fund ('MPF') and received an executive allowance of 25 per cent of annual basic salary during 2009, less the mandatory contributions to the MPF by both the employer and employee, to fund personal pension arrangements (HK$2,313,000). During 2009, the mandatory employer contribution to the MPF in respect of Mr Cheng was HK$12,000.

D J Flint received an executive allowance during 2009 of 55 per cent of annual basic salary to fund personal pension arrangements (£385,000). From 1 February 2010 this executive allowance will be 50 per cent of annual basic salary.

A A Flockhart received employer contributions during 2009 of 40 per cent of annual basic salary into a personal pension plan (HK$3,200,000). From 1 February 2010 employer contributions will be equivalent to 50 per cent of annual basic salary.

M F Geoghegan received an executive allowance during 2009 of 50 per cent of annual basic salary to fund personal pension arrangements (£535,000). No employer contribution was made to the HSBC Asia Holdings Pension Plan in 2009. (In 2008, an employer contribution of £225,000 was made arising entirely from a bonus sacrifice in respect of 2007.)

S K Green ceased membership of the HSBC Bank (UK) Pension Scheme on 5 April 2006. Since 6 April 2006, Mr Green has been entitled to receive benefits from an Employer Funded Retirement Benefits Scheme which together with entitlements from the HSBC Bank (UK) Pension Scheme will provide benefits to Mr Green that will be broadly comparable to an accrual rate of one-thirtieth of pensionable salary for each year of pensionable service.

S T Gulliver received employer contributions during 2009 of 30 per cent of annual basic salary into a personal pension plan (£240,000). From 1 February 2010 employer contributions will be equivalent to 50 per cent of annual basic salary.

Defined Benefit Pension Arrangements

	Accrued         annual   pension at 31 December             2009		Increase in       accrued      pension        during            2009		Increase in        accrued       pension during 2009,    excluding any increase  for inflation		Transfer            value   of accrued   pension at                 31 December             20081		Transfer            value   of accrued   pension at 31 December             20091		Increase of transfer value      of accrued pension (less       personal contributions)          in 20091	Transfer     value (less         personal contributions) at 31 December	Transfer value         (less personal    contributions) at 31 December 2009 relating to increase in accrued pensions           during 2009,         excluding any  increase for                  inflation1
	£000		£000		£000		£000		£000		£000		£000
A A Flockhart2 ...............	270		163		6		4,644		4,863		219		100
S K Green ...............	711		424		42		17,716		19,119		1,403		1,121
S T Gulliver5 .	-		83		2		2,749		-		125		-

1  The transfer value represents a liability of HSBC's pension funds and not a sum paid or due to the individual; it cannot therefore meaningfully be added to annual remuneration.

2  A A Flockhart ceased accrual of pension benefits in the International Staff Retirement Benefits Scheme ('ISRBS') on 30 November 2008 and he has deferred commencement of his pension. The ISRBS retains a liability for a contingent spouse's pension of £131,655 per annum as at 31 December 2009.

3  A A Flockhart and S T Gulliver received increases for inflation to their accrued pensions on 1 January 2009 of 4.2 per cent, based on the increase in the UK Retail Prices Index over the year to 31 October 2008.

4  S K Green's total accrued pension received no increase in respect of inflation in 2009. The part of S K Green's pension payable from the HSBC Bank (UK) Pension Scheme receives an annual increase in line with the UK Government's statutory revaluation order for 2009, which is based on the increase in the UK Retail Prices Index over the last year to 30 September 2009. As this was negative, no increase was applied. The additional accrual of benefits is provided by the Employer Funded Retirement Benefits Scheme.

5  S T Gulliver ceased accrual of pension benefits in the ISRBS on 31 March 2006 and at that time deferred commencement of his pension. S T Gulliver commuted all his benefits out of the ISRBS on 31 May 2009 except for a contingent spouse's pension. A commutation lump sum of £2,743,437 was paid to S T Gulliver in lieu of his entire pension. The ISRBS retains a contingent spouse's liability pension of £63,563 per annum as at 31 December 2009. After 31 May 2009, S T Gulliver stopped accruing pension benefits, and as such he is no longer eligible to take transfers from the Scheme in respect of any spouse's liability.

The following table shows unfunded pension payments, in respect of which provision has been made, during 2009 to five former Directors of HSBC Holdings plc.

	2009 £		2008 £
B H Asher .............................	101,858		97,752
C F W de Croisset ..................	247,115		221,100
R Delbridge ............................	146,507		140,601
Sir Brian Pearse .....................	61,095		58,632
Sir William Purves .................	107,827		103,481
	664,402		621,566

The payments in respect of R Delbridge and Sir Brian Pearse were made by HSBC Bank plc as former directors of that bank. The payment in respect of C F W de Croisset was made by HSBC France as a former director of that bank.
Share plans

(Audited)

At 31 December 2009, the undernamed Directors held options and awards of Performance Shares and Restricted Shares to acquire the number of HSBC Holdings ordinary shares set against their respective names.

HSBC Holdings savings-related share option plans

(Audited)

HSBC Holdings ordinary shares of US$0.50

		Exercise price (£)											Adjust-
	Date of           award	At      1 Jan      2009		At    31 Dec       2009								At         1 Jan         2009	ment for rights        issue		Awarded during the          year	At      31 Dec         2009
						Exercisable
						from1		until
D J Flint .............	25 Apr 2007	7.0872		6.17602		1 Aug 2012		31 Jan 2013				2,310		340	-	2,650
A A Flockhart ....	25 Apr 2007	7.0872		6.17602		1 Aug 2010		31 Jan 2011				1,332		196	-	-3
A A Flockhart ....	29 Apr 2009	-		3.3116		1 Aug 2014		31 Jan 2015				-		-	4,529	4,529

The HSBC Holdings savings-related share option plans are all-employee share plans under which eligible HSBC employees may be granted options to acquire HSBC Holdings ordinary shares. Employees may make contributions of up to £250 (or equivalent) each month over a period of one, three or five years which may be used on the first, third or fifth anniversary of the commencement of the relevant savings contract, at the employee's election, to exercise the options. The plans help align the interests of employees with the creation of shareholder value and, as such, exercise of the options is not subject to any performance conditions. The options were awarded for nil consideration and are exercisable at a 20 per cent discount to the average market value of the ordinary shares on the five business days immediately preceding the invitation date. No options lapsed during the year. There are no performance criteria conditional upon which the outstanding options are exercisable and there have been no variations to the terms and conditions since the awards were made. The market value per ordinary share at 31 December 2009 was £7.088. The highest and lowest market values per ordinary share during the year were £7.612 and £3.0413. Market value is the mid-market price derived from the London Stock Exchange Daily Official List on the relevant date. Under the Securities and Futures Ordinance of Hong Kong, the options are categorised as unlisted physically settled equity derivatives.

1  May be advanced to an earlier date in certain circumstances, e.g. retirement.

2  Adjusted for rights issue.

3  Options lapsed on 29 April 2009 following closure of the associated savings-related account by the Director.

Awards of Performance Shares

HSBC Share Plan

(Audited)

HSBC Holdings ordinary shares of US$0.50

	Date of           award		Year in          which         awards        may vest		Awards         held at           1 Jan           2009		Awards vested during year1,2,3						Awards         held at        31 Dec               20092
											Adjustment     for rights            issue
							Number		Monetary           value
									£000
V H C Cheng ......................	6 Mar 2006	2009	2009		92,689		21,722		95		13,927		-3
	5 Mar 2007	2010	2010		180,739		-		-		27,156		218,035
	3 Jun 2008	2011	2011		130,852		-		-		19,661		157,852
D J Flint .............................	6 Mar 2006	2009	2009		185,378		43,444		191		27,854		-3
	5 Mar 2007	2010	2010		270,755		-		-		40,682		326,626
	3 Jun 2008	2011	2011		377,343		-		-		56,696		455,210
A A Flockhart ....................	6 Mar 2006	2009	2009		69,518		16,291		71		10,445		-3
	5 Mar 2007	2010	2010		120,395		-		-		18,089		145,238
	3 Jun 2008	2011	2011		128,675		-		-		19,333		155,227
M F Geoghegan ..................	6 Mar 2006	2009	2009		231,724		54,305		238		34,817		-3
	5 Mar 2007	2010	2010		615,351		-		-		92,458		742,334
	3 Jun 2008	2011	2011		886,755		-		-		133,237		1,069,746
S K Green ...........................	6 Mar 2006	2009	2009		289,653		67,881		298		43,521		-3
	5 Mar 2007	2010	2010		461,513		-		-		69,344		556,750
	3 Jun 2008	2011	2011		1,037,692		-		-		155,915		1,251,829
S T Gulliver ........................	6 Mar 2006	2009	2009		115,861		27,152		119		17,409		-3
	5 Mar 2007	2010	2010		133,725		-		-		20,092		161,319
	3 Jun 2008	2011	2011		56,063		-		-		8,423		67,631

Vesting of these awards of Performance Shares is subject to the achievement of the corporate performance conditions set out on pages 339 to 342. Interests in awards of Performance Shares are categorised under the Securities and Futures Ordinance of Hong Kong as the interests of a beneficiary of a trust. No awards of Performance Shares were made in 2009.

1  A part of the total shareholder return element of the performance conditions was met and the related part of the award vested on 8 April 2009, when the market value per share was £4.37, as follows: V H C Cheng, 21,394 shares; D J Flint, 42,788 shares; A A Flockhart, 16,045 shares; M F Geoghegan, 53,485 shares; S K Green, 66,856 shares; and S T Gulliver, 26,742 shares. Awards representing the fourth interim dividend for 2008 vested on 6 May 2009, when the market value per share was £5.39, as follows: V H C Cheng, 328 shares; D J Flint, 656 shares; A A Flockhart, 246 shares; M F Geoghegan, 820 shares; S K Green, 1,025 shares; and S T Gulliver, 410 shares. The market value per share on the date of the award, 6 March 2006, was £9.89.

2  Includes additional shares arising from scrip dividends.

3  The earnings per share element and part of the total shareholder return element of the performance conditions were not met and, under the terms of the Plan, the following awards were forfeited on 8 April 2009: V H C Cheng, 86,931 shares; D J Flint, 173,862 shares;
A A Flockhart, 65,199 shares; M F Geoghegan, 217,328 shares; S K Green, 271,659; and S T Gulliver, 108,664 shares. As a consequence, the fourth interim dividend for 2008 did not accrue on the forfeited shares.

Awards of Restricted Shares

HSBC Share Plan

(Audited)

HSBC Holdings ordinary shares of US$0.50

	Date of           award		Year in        which       awards   may vest		Awards     held on         1 Jan         2009		Awards made during year1				Awards vested during year2			Adjustment for rights issue			Awards held at      31 Dec            20092
							Number		Monetary value		Number		Monetary         value
									£000				£000
V H C Cheng	3 Mar 2008	2008	2011		86,158		-		-		-		-		12,945		103,936
	2 Mar 2009		2012		-		416,662		1,662		-		-		61,471		493,545
A A Flockhart ....	31 Oct 2007		2010		53,568		-		-		-		-		8,048		64,621
	3 Mar 2008		2011		12,488		-		-		-		-		1,877		15,064
	2 Mar 2009		2012		-		420,528		1,678		-		-		62,041		498,124
S T Gulliver .	6 Mar 2006		20093		150,421		-		-		153,1934		6114		-		-
	5 Mar 2007	2010	2009-20103		319,934		-		-		163,8744		6544		23,894		191,842
	3 Mar 2008	2011	2009-20113		480,237		-		-		161,3994		6444		48,345		388,157

Vesting of Restricted Share awards is normally subject to the Director remaining an employee on the vesting date. The vesting date may be advanced to an earlier date in certain circumstances, e.g. death or retirement. Interests in Restricted Share awards granted in 2007 and 2008 are categorised under the Securities and Futures Ordinance of Hong Kong as the interests of a beneficiary of a trust and interests in Restricted Share awards granted in 2009 are categorised under the Securities and Futures Ordinance of Hong Kong as the interests of a beneficial owner.

1  At the date of the award, 2 March 2009, the market value per share was £3.99.

2  Includes additional shares arising from scrip dividends.

3  33 per cent of the award vests on each of the first and second anniversaries of the date of the award, with the balance vesting on the third anniversary of the date of the award.

4  At the date of vesting, 2 March 2009, the market value per share was £3.99. The market value per share on the dates of the awards, 6 March 2006, 5 March 2007 and 3 March 2008, was £9.89, £8.96 and £7.90 respectively.

On behalf of the Board                                                                                                                                     1 March 2010

Sir Mark Moody-Stuart, Chairman of Remuneration Committee

 

END

 

 

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