HSBC 2005 Annual Report Download - page 227

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Under the amendment agreement, Mr Aldinger
was entitled to receive, on termination of the 2002
employment agreement on 29 April 2005, the same
terms and benefits (summarised above) as if his
employment had been terminated by him for ‘good
reason’ or by HSBC Finance for reasons other than
‘cause’ or disability, except that he would not be
entitled to receive the 2005 restricted share award
(or cash equivalent) with a value to at least
US$5.5 million that he would have been entitled to
receive on or before 28 April 2005. Mr Aldinger did,
however, receive a payment of US$4.6 million in
lieu of salary and bonus in respect of the remainder
of the three-year period. The amendment agreement
also provided that the ‘non-competition’ provision in
the 2002 employment agreement for a period of one
year after termination of his employment, and certain
other restrictions, will continue to apply. Under this
provision he may not become associated with certain
competitive entities that are actively engaged in the
consumer lending business (including mortgage and
credit card lending).
Sir John Bond is employed on a rolling contract
dated 14 July 1994 which requires 12 months’ notice
to be given by either party.
D G Eldon, who retired as a Director on 27 May
2005, was employed on a rolling contract dated
1 January 1968 which required three months’ notice
to be given by either party.
D J Flint is employed on a rolling contract dated
29 September 1995 which requires 12 months’
notice to be given by the Company and nine months’
notice to be given by Mr Flint.
M F Geoghegan, who is to stand for re-election
at the forthcoming Annual General Meeting, is
employed on a rolling contract dated 25 May 2004
which requires 12 months’ notice to be given by
either party.
S K Green, who is to stand for re-election at the
forthcoming Annual General Meeting, is employed
on a rolling contract dated 9 March 1998 which
requires 12 months’ notice to be given by either
party.
A W Jebson is employed on a rolling contract
dated 14 January 2000 which requires 12 months’
notice to be given by either party.
Members of Senior Management are employed
on service contracts which generally provide for a
term of service expiring at the end of a period of up
to two years, or the individual’s sixtieth birthday,
whichever is earlier.
Non-executive Directors are appointed for fixed
terms not exceeding three years, subject to their
re-election by shareholders at subsequent Annual
General Meetings. Non-executive Directors have no
service contract and are not eligible to participate in
HSBC’s share plans. Non-executive Directors’ terms
of appointment will expire as follows: in 2006,
Sir John Kemp-Welch; in 2007, Lord Butler,
R K F Ch’ien, Baroness Dunn, R A Fairhead,
W K L Fung, S Hintze, Sir Brian Moffat,
Sir Mark Moody-Stuart and H Sohmen; in 2008,
J D Coombe and J W J Hughes-Hallett; and
in 2009, S W Newton, S M Robertson and
Sir Brian Williamson.
Other directorships
Executive Directors, if so authorised by either the
Nomination Committee or the Board, may accept
appointments as non-executive Directors of suitable
companies which are not part of HSBC. Approval
will not be given for executive Directors to accept a
non-executive directorship of more than one FTSE
100 company. When considering a non-executive
appointment, the Nomination Committee or Board
will take into account the expected time commitment
of such appointment. The time commitment for
executive Directors’ external appointments will be
reviewed as part of the annual Board review. Any
remuneration receivable in respect of an external
appointment is normally paid to the HSBC company
by which the executive Director is employed, unless
otherwise approved by the Remuneration
Committee.
Sir John Bond retains his fees as a non-
executive Director of the Ford Motor Company,
which are provided partly in the form of restricted
shares, which become unrestricted over a period of
five years. During 2005 the fees received were
US$80,000 in cash and US$120,000 deferred into
Ford common stock units. In addition, Ford provides
US$200,000 of life assurance and US$500,000 of
accidental death or dismemberment insurance. The
life assurance can be continued after retirement from
the Board or Sir John Bond could elect to have it
reduced to US$100,000 and receive US$15,000 a
year for life. The accidental death or dismemberment
insurance ends upon retirement from the Board.
W F Aldinger retained his fees as a non-
executive Director of Illinois Tool Works, Inc. and as
a non-executive Director of AT&T Corp. During the
period to his retirement as a Director of HSBC
Holdings on 29 April 2005, the fee received from
Illinois Tool Works, Inc. was US$53,000 in the form
of deferred stock and the fee received from AT&T
Corp. was US$52,803. In addition, AT&T Corp.