HSBC 2006 Annual Report Download - page 337

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HSBC Holdings Restricted Share Plan 2000
Performance Share awards made under the HSBC Holdings Restricted Share Plan 2000 (the ‘Restricted Share
Plan’)
Performance Share awards under the Restricted Share Plan were granted to Senior Executives from 2000 to 2004.
The aim of the plan was to align the interests of executives to the creation of shareholder value. This was achieved by
setting certain Total Shareholder Return targets against a peer group of major banks which must normally be attained
in order for the awards to vest. No further awards will be made under this Plan following adoption of The HSBC
Share Plan in 2005 other than from reinvested scrip dividends.
2006 2005
Number Number
(000’s) (000’s)
Outstanding at 1 January ................................................................................................................... 14,970 17,044
Additions during the year1 ................................................................................................................. 520 710
Released in the year ........................................................................................................................... (3,050) (2,455)
Forfeited in the year ........................................................................................................................... (112) (329)
Outstanding at 31 December ............................................................................................................. 12,328 14,970
1 Additions during the year comprise reinvested scrip dividends, and include nil shares awarded to employees of HSBC Holdings (2005:
321,279).
The weighted average remaining vesting period as at 31 December 2006 was 1.53 years (2005: 2.14 years).
Restricted share awards made under the HSBC Holdings Restricted Share Plan 2000
Restricted shares were awarded to eligible employees after taking into account the employee’s performance in the
prior year, potential and retention requirements. Restricted shares are also awarded as part deferral of annual bonus or
for recruitment purposes. Shares are awarded without corporate performance conditions and are generally released to
employees between one and three years after the award was made, providing the employees have remained
continuously employed by HSBC for this period.
2006
Number
2005
Number
(000’s) (000’s)
Outstanding at 1 January ................................................................................................................... 58,427 46,021
Additions during the year1 ................................................................................................................. 1,499 34,439
Released in the year ........................................................................................................................... (19,224) (21,007)
Forfeited in the year ........................................................................................................................... (2,032) (1,026)
Outstanding at 31 December ............................................................................................................. 38,670 58,427
1 Additions during the year comprise reinvested scrip dividends, and include 41,951 shares awarded to employees of HSBC Holdings
(2005: 384,797).
The weighted average fair value of shares awarded by HSBC for Restricted Share Awards in 2005 was US$15.88. No
awards were made in 2006.
The weighted average remaining vesting period as at 31 December 2006 was 0.84 years (2005: 1.09 years).
HSBC Holdings Group Share Option Plan
The HSBC Holdings Group Share Option Plan was a long-term incentive plan under which certain HSBC employees
between 2000 and 2005 were awarded share options. The aim of the plan was to align the interests of those higher
performing employees to the creation of shareholder value. This was achieved by setting certain Total Shareholder
Return targets which must normally be attained in order for the awards to vest. Options were granted at market value
and are normally exercisable between the third and tenth anniversaries of the date of grant, subject to vesting
conditions. Any options granted after May 2005 will be made under the Rules of The HSBC Share Plan.