HSBC 2015 Annual Report Download - page 47

We are making changes to our
Directors’ remuneration policy
Our current remuneration policy was
approved by shareholders at the 2014
Annual General Meeting (‘AGM’) and
Pay Element Implementation in 2015 Proposed changes to policy for 2016
Fixed Base salary – Benchmarked on an annual basis
– Increases will not exceed more than 15% of
base salary levels as at 2013 during the term
of the policy
– Amounts have not changed since 2010
No change to policy:
– Increase will not exceed more than 15% of base salary levels
as at 2016 during the term of the policy
Fixed pay
allowance
– Fixed pay allowances introduced in 2014 to ensure the
total compensation package remains competitive as a
consequence of new regulatory requirements in 2013
– Granted in immediately vested shares, subject
to a retention period with 20% released after
one year and the remainder after five years
– Maximum fixed pay allowance for each
executive Director is 150% of base salary
– Granted in immediately vested shares,
subject to a retention period released pro-rata
over a period of five years
Pension – Cash allowance in lieu of pension of up to 50%
of base salary
– Reduced to a maximum of 30% of base salary
Benefits – Takes account of local market practice,
including but not limited to medical and
income protection insurance
– No change to current provided benefits
– Post-departure benefits introduced for up to seven years from
date of departure
Variable Annual
incentive
– Maximum is 67% of fixed pay (equal to
approximately 181% of base salary)
– Measured against an annual scorecard
– A minimum of 60% will be deferred and vest over
a three-year period
– Delivered in cash and shares, with a minimum
of 50% delivered in shares
– Maximum is 215% of base salary
– 100% delivered in shares subject to a retention period, with
the Remuneration Committee to have discretion to defer
a portion of the awards or apply a longer retention period
Long-term
incentive
– Group Performance Share Plan
– Maximum of 133% of fixed pay (equal to
approximately 381% of base salary)
– Measured against 2014 long-term scorecard
– Delivered in shares with a five-year vesting period
– Required to hold shares until retirement
– New long-term incentive plan
– Maximum is 320% of base salary
– Performance targets set annually for each three-year
forward-looking performance period
– Introduction of relative total shareholder return as a
performance measure
– Delivered in shares, subject to the outcome of the performance
conditions at the end of the three-year performance period, in
equal instalments between the third and seventh anniversary
of the grant date
– A retention period may be applied to ensure compliance with
regulatory requirements
Policy for executive Directors
was applied for 2015. Due to increased
regulatory requirements, we are putting
forward a new remuneration policy for
shareholder approval at the AGM this
year. For further details, see page 288.
The table below summarises how each
element of pay was implemented in
2015 and how it will change for 2016
if the new policy is approved.
For full details of the current
Directors’ remuneration policy,
see page 381 of the 2013 Directors’
Remuneration Report.
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HSBC HOLDINGS PLC
45
Remuneration