HSBC 2007 Annual Report Download - page 381

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award, shares are released to the employee on a sliding scale from 30 to 100 per cent of the award, depending on the
scale of achievement against the benchmarks, providing that the minimum criteria for each performance measure has
been met and subject to the Remuneration Committee being satisfied that HSBC’s financial performance has shown a
sustained improvement in the period since the award date. The shares vest after three years to the extent that the
vesting conditions are satisfied.
2007 2006
Number Number
(000’s) (000’s)
Outstanding at 1 January ................................................................................................................... 10,367 5,077
Additions during the year ................................................................................................................... 3,263 5,312
Forfeited in the year ........................................................................................................................... (1,312) (22)
Outstanding at 31 December ............................................................................................................. 12,318 10,367
The weighted average fair value of shares awarded by HSBC for performance share awards in 2007 was US$13.24
(2006: US$13.31).
Restricted share awards
Restricted shares are awarded to other employees on the basis of their performance, potential and retention
requirements, to aid recruitment or as a part-deferral of annual bonuses. Shares are awarded without corporate
performance conditions and generally vest between one and three years from the date of award, providing the
employees have remained continually employed by HSBC for this period.
2007 2006
Number Number
(000’s) (000’s)
Outstanding at 1 January ................................................................................................................... 43,420 5,106
Additions during the year ................................................................................................................... 52,790 41,440
Released in the year ........................................................................................................................... (8,781) (1,685)
Forfeited in the year ........................................................................................................................... (8,173) (1,441)
Outstanding at 31 December ............................................................................................................. 79,256 43,420
The weighted average fair value of shares awarded by HSBC for restricted share awards in 2007 was US$17.92
(2006: US$17.65).
Share options
Share options were granted in 2005 under The HSBC Share Plan to employees in France on the basis of their
performance in the previous year. The share options are subject to the corporate performance conditions, which
consist of an absolute earnings per share measure and a TSR measure based on HSBC Holdings’ ranking against a
comparator group of 28 major banks. The options may vest after three years and are exercisable up to the tenth
anniversary of the date of grant, after which they will lapse.
2007 2006
Number
Weighted
average
exercise
price Number
Weighted
average
exercise
price
(000’s) £ (000’s) £
Outstanding at 1 January .............................................. 628 8.84 628 8.84
Forfeited in the year ...................................................... (104) 8.79 – –
Outstanding at 31 December ........................................ 524 8.85 628 8.84
No options were granted in 2007 (2006: nil). The weighted average remaining contractual life of options outstanding
at the balance sheet date was 2.4 years (2006: 3.3 years). The exercise price range of options outstanding at the
balance sheet date was £8.79 - £9.17. None of these options were exercisable at the balance sheet date.