HSBC 2009 Annual Report Download - page 345

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Directors and the Group Managing Directors. The
Committee considers that material share ownership
by executives creates a community of interest
between senior management and shareholders.
To demonstrate further alignment with
shareholders the share ownership guidelines
were significantly increased in 2008 and
will be reviewed during 2010 in light of the
recommendations in the Walker Review of corporate
governance.
Under the existing guidelines, the shareholding
is expected to be achieved within five years of the
executive’s appointment or three years from the date
of approval of amendments to the HSBC Share Plan
on 30 May 2008, whichever is the later. The
executive Directors and Group Managing Directors
are now required to build and retain the following
shareholdings:
Number of shares1
to be held
held at 31
December
2009
V H C Cheng .................................... 200,000 1,063,646
D J Flint ............................................ 200,000 155,326
A A Flockhart ................................... 200,000 846,817
M F Geoghegan ................................ 600,000 724,757
S K Green ......................................... 600,000 901,211
S T Gulliver ...................................... 200,000 3,311,056
Group Managing Directors ............... 125,000 –2
1 For the purposes of the guidelines, unvested awards of
Restricted Shares are included. Unvested Performance
Share awards are excluded.
2 All of the Group Managing Directors exceed the expected
holdings.
The Remuneration Committee monitors
compliance with the share ownership guidelines
annually. The Committee will have full discretion
in determining any penalties in cases of non-
compliance, which could include a reduction of
future awards of long-term incentives and/or an
increase in the proportion of the annual bonus that
is deferred into shares.
Service contracts
HSBC’s policy is to employ executive Directors on
one-year rolling contracts although longer initial
terms may be approved by the Remuneration
Committee if considered appropriate. The
Remuneration Committee will, consistent with
the best interests of the Group, seek to minimise
termination payments.
S K Green, M F Geoghegan, V H C Cheng,
D J Flint, A A Flockhart and S T Gulliver have
rolling service contracts with a notice period of
12 months for either party.
In the event of early termination of employment
other than for cause, of S K Green, M F Geoghegan,
V H C Cheng, D J Flint, A A Flockhart or
S T Gulliver, HSBC is entitled to make a payment
in lieu of notice equal to base salary, pension
entitlements and other benefits.
D J Flint, A A Flockhart and S T Gulliver will be
eligible to be considered for a bonus on termination
of employment by HSBC other than for cause.
S T Gulliver will also be eligible to be considered for
a bonus upon termination of employment by either
party within 12 months following a change of control.
On termination of employment by HSBC, other
than for cause (or termination by either party within
12 months following a change of control), S K Green
and M F Geoghegan will be eligible for a bonus
calculated as not less than the average of the
previous two years of bonus payments received,
pro-rated for any part-year worked to termination.
Dates of service contracts – executive Directors
Contract date
V H C Cheng ..................................... 29 August 2008
D J Flint ............................................. 14 October 2008
A A Flockhart .................................... 2 December 2008
M F Geoghegan ................................. 26 February 2010
S K Green ........................................... 28 February 2008
S T Gulliver ....................................... 5 September 2008
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 nor the chairmanship of such a
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 HSBC, unless
otherwise approved by the Remuneration
Committee. D J Flint has elected to donate his fees
as a non-executive Director of BP p.l.c. to charity.
S K Green was appointed to the Supervisory Board
of BASF SE on 30 April 2009 and has elected to
donate his fees to charity.
Non-executive Directors
Non-executive Directors are appointed for fixed
terms not exceeding three years, subject to their