HSBC 2003 Annual Report Download - page 218

HSBC HOLDINGS PLC
Directors’ Remuneration Report (continued)
216
Base salaries with effect from April 2004 will
be:
W F Aldinger ............................................. US$1,000,000
Sir John Bond ............................................ £1,202,800
W R P Dalton ............................................ £521,500
D G Eldon ................................................. US$290,340
D J Flint ..................................................... £462,500
M F Geoghegan ......................................... £575,000
S K Green .................................................. £700,000
A W Jebson ............................................... £515,000
This represents an average increase from 2003
of 18.9 per cent.
As an International Manager, D G Eldon’s
current base salary, shown above, is calculated on a
net basis and will be subject to a separate review in
April 2004.
Annual cash bonus
Cash bonuses for executive Directors and members
of Senior Management are based on two key
factors: individual performance, taking into
account, as appropriate, results against plan of the
business unit or performance of the support
function for which the individual is responsible;
and Group performance, measured by comparing
operating profit before tax with plan. The
Remuneration Committee has discretion to
eliminate extraordinary items when assessing
bonuses, if the main cause did not arise during the
current bonus year.
Measurement against these key performance
factors may, exceptionally, result in discretionary
cash bonuses up to 250 per cent of basic salary. For
2003, bonuses have ranged from 60 per cent to
250 per cent of base salary, with all but two of the
executive Directors and members of Senior
Management receiving discretionary bonuses of
less than 110 per cent of base salary.
Long term incentive plan
The HSBC Holdings Restricted Share Plan 2000 is
the principal long-term incentive plan used to
reward the delivery of sustained financial growth
of HSBC Holdings. So as to align the interests of
the Directors and senior employees more closely
with those of shareholders, the vesting of
Performance Share awards is subject to the
attainment of a predetermined TSR target.
Awards
In recent years the Remuneration Committee has
adopted a policy that the face value of annual
awards of Performance Shares to executive
Directors and members of Senior Management will
not as a general rule exceed 100 per cent of
earnings (defined as base salary and bonus in
respect of the previous performance year).
Additionally, executive Directors and
members of Senior Management who participate in
the HSBC Holdings Restricted Share Plan 2000
have not received awards under the HSBC
Holdings Group Share Option Plan.
The Remuneration Committee has proposed to
the Trustee of the HSBC Holdings Restricted Share
Plan 2000 that the following conditional awards
should be made to executive Directors in 2004:
£000
Sir John Bond .................................................... 2,100
D G Eldon ......................................................... 750
D J Flint ............................................................ 1,040
M F Geoghegan ................................................. 780
S K Green .......................................................... 1,430
A W Jebson ....................................................... 1,040
Total .................................................................. 7,140
The Trustee to the Plan will be provided with
funds to acquire HSBC Holdings ordinary shares at
an appropriate time after the announcement of the
annual results. The 2004 conditional awards
proposed for executive Directors and members of
Senior Management in respect of 2003 will have an
aggregate value at the date of award of
£16.86 million.
Under the terms of his employment agreement
entered into at the time of the acquisition of
Household, W F Aldinger will receive an award of
US$5.5 million which will be used to purchase
Restricted Shares in HSBC Holdings. These
Restricted Shares are not subject to the TSR
performance conditions set out on pages 217 to
219. One-third of this award of Restricted Shares
will vest on each of the three anniversaries
following the date of grant.
C F W de Croisset, who retired from HSBC on
29 February 2004, has not received any awards of
Performance Shares under the HSBC Holdings
Restricted Share Plan since the acquisition of CCF
in 2000. Rather, in accordance with the
arrangements agreed with CCF in 2000, Mr de
Croisset received share option awards under the