HSBC 2003 Annual Report Download - page 220

HSBC HOLDINGS PLC
Directors’ Remuneration Report (continued)
218
For awards made in 2004 and thereafter, under
the HSBC Holdings Restricted Share Plan 2000
only, the initial performance period will be three
years from the date of grant. As before, if the upper
quartile performance target is achieved, an
additional award equal to 20 per cent of the initial
Performance Share award will be made and will
vest at the same time as the original award to
which it relates. However, regardless of whether
the upper quartile is achieved, full vesting and
transfer of the shares will not generally occur until
the fifth anniversary of the date of grant. If the
performance test is not passed at the third
anniversary, the shares will be forfeited.
As a secondary condition, options and awards
will only vest if the Remuneration Committee is
satisfied that HSBC Holdings’ financial
performance has shown a sustained improvement
in the period since the date of grant.
In determining whether HSBC has achieved a
sustained improvement in performance the
Remuneration Committee will take account of,
among other factors, the comparison against
history and the peer group in the following areas:
1. revenue growth;
2. revenue mix;
3. cost efficiency;
4. credit performance as measured by risk-
adjusted revenues; and
5. cash return on cash invested, dividend
performance and total shareholder return.
Awards will vest immediately in cases of death.
The Remuneration Committee retains discretion to
recommend early release of the shares to the plan
Trustee in certain instances, e.g. in the event of
redundancy, retirement on grounds of injury or ill
health, early retirement, retirement on or after
contractual retirement or if the business is no
longer part of HSBC Holdings. Awards will
normally be forfeited if the participant is dismissed
or resigns from HSBC.
Where events occur which cause the
Remuneration Committee to consider that the
performance condition has become unfair or
impractical, the right is reserved to the
Remuneration Committee to make such
adjustments as in its absolute discretion it deems
appropriate to make.
Pension
The pension entitlements earned by the executive
Directors during the year are set out on pages 224
and 225.