HSBC 2012 Annual Report Download - page 351

349
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
• Additionally, for annual incentive awards in
respect of 2012 for executive Directors, Group
Managing Directors and Group General
Managers, the deferred element of the 2012
incentive will be deferred for an extended period
of five years and will vest subject to satisfactory
completion of the Deferred Prosecution
Agreements and subject to the terms of the
GPSP.
• The Committee has further exercised its
discretion and reduced the performance outcome
of the 2012 long-term scorecard. For further
details see page 357.
• Clawback has been exercised by the Committee
during 2012 and 2013 principally in respect of
the US regulatory and law enforcement fines
and penalties.
Group
Global Banking
and Markets
2012 2011 2012 2011
US$m US$m US$m US$m
Total variable pay pool ................................................................. 3,689 4,223 1,266 1,210
% % % %
Variable compensation incentive pool as a percentage of
underlying pre-tax profit (pre-variable pay)1 ........................... 17 18 13 14
Proportion of incentive that is deferred ........................................ 17 16 28 27
1 The 2012 Group pre-tax profit pre-variable pay calculation is described on page 348. The 2011 Group pre-tax profit pre-variable pay
includes the add-back of restructuring costs incurred during the year, and the adjustment for movements in the fair value of own debt
attributable to credit spread.
Change in key metrics
(Unaudited)
The table and charts below show the percentage
change in profit, dividends and overall expenditure
on staff pay.
Underlying
profit Dividend
Overall
expenditure
on staff pay
% % %
Change:
2012 from 2011 ..... +18 +10 –3
On a pro forma basis, attributable profits
(excluding movements in the fair value of own debt
and before variable pay distributions) are allocated
in the proportions shown in the charts below.
Pro forma post-tax profits allocation
Retained
earnings
/
capital
60%
Dividends¹
29%
Variable pay²
11%
2012
Retained
earnings
/
capital
50%
Dividends¹
35%
Variable pay²
15%
2011
1 Inclusive of dividends to holders of other equity instruments and net of scrip issuance. Dividends per ordinary share declared in respect
of 2012 were US$0.45, an increase of 10% compared with 2011.
2 Total variable pay pool net of tax and portion to be delivered by the award of HSBC shares.
Role, membership and activities of the
Committee
Within the authority delegated by the Board, the
Committee is responsible for approving the Group’s
remuneration policy. The Committee also determines
the remuneration of Directors, senior employees,
employees in positions of significant influence and
employees whose activities have or could have an
impact on our risk profile and, in doing so, takes into
account the pay and conditions across the Group.
No Directors are involved in deciding their own
remuneration.
The members of the Committee during 2012
were J L Thornton (Chairman), J D Coombe,
W S H Laidlaw and G Morgan (retired as a Director
on 25 May 2012). R Fassbind was appointed a
member of the Committee on 1 March 2013.