HSBC 2015 Annual Report Download - page 306

Directors’ Remuneration Report (continued)
Annual report on remuneration
HSBC HOLDINGS PLC
304
2015 variable pay pool
This year’s variable pay pool is established by reference to
the Group’s reported profit before tax, which is adjusted
to exclude movements in the fair value of own debt
attributable to credit spread, the gains and losses from
disposals, and debit valuation adjustment. Reported profit
before tax includes the costs of fines, penalties and other
items of redress.
The Committee has taken into account all of the factors in
the previous table to determine the outcome below:
Variable pay pool outcome ($m)
Group
Global Banking
and Markets
2015 2014 2015 2014
Variable compensation
incentive pool as a %
of pre-tax profit
(pre-variable pay)1 16% 16%
12% 15%
% of variable pay pool
deferred2 15% 14%
26% 25%
1 The 2015 Group pre-tax pre-variable pay profit calculation as
described above.
2 The percentage of variable pay deferred for 2015 material risk-taker
population is 51%.
Relative importance of spend on pay
The chart below provides a breakdown of total staff pay
relative to the amount paid out in dividends.
1 Dividends per ordinary share in respect of that year. For 2015, this
includes the first, second and third interim dividends paid in 2015
of $5.9bn (gross of scrip) and a fourth interim dividend of $4.1bn.
2 Employee compensation and benefits in 2015 and 2014 includes
fixed pay, benefits and variable pay as outlined on page 16.
Pro-forma post-tax profits allocation
On a pro-forma basis, attributable post-tax profits
(excluding the movements in the fair value of own debt
and before pay distributions) for 2015 were allocated in
the proportions shown in the chart below. The overall
compensation benefits expense to net revenue was 33%
for 2015.
1 Inclusive of dividends to holders of other equity instruments and net
of scrip issuance based on an assumption of scrip take up for the
fourth quarter of 2015 of 20%. Dividends per ordinary share declared
in respect of 2015 were $0.51, an increase of 2% compared with
2014. The post-tax profits allocation figures shown in the Annual
Report and Accounts 2014 in respect of that year assumed a scrip
take up of 20%. The figures shown above in relation to 2014 have
been calculated based on an actual scrip take up of 52%.
2 Total variable pay pool net of tax and portion to be delivered by the
award of HSBC shares.
3,462
1,086
3,660
1,120
Group Global Banking and Markets
2015 2014
-5%
-3%
10,000
19,900
9,600
20,366
Ordinary dividends¹ Employee compensation
and benefits²
2015 2014
$m
4%
-2%
25%
59%
16%
2015
39%
46%
15%
2014
Retained earnings/capital Dividends
1
Variable pay
2