HSBC 2001 Annual Report Download - page 146

HSBC HOLDINGS PLC
Report of the Directors (continued)
144
There are four key components of executive
Directors remuneration:
iSalary
In 2001, all executive Directors salaries, which
had been consistently below market for some
time, were raised substantially. Average
increases for UK-based executive Directors in
2002 will be 2.45 per cent of basic salary.
ii Annual Cash Bonus
Cash bonuses for executive Directors and
members of Senior Management are based on
two key factors: individual performance taking
account of, as appropriate, results against plan
of the business unit or performance of the
support function for which the individual has
responsibility; and Group performance
measured by operating profit before tax against
plan. The Remuneration Committee has
discretion to eliminate extraordinary items when
assessing bonuses, if the main cause did not
arise during the current bonus year.
Commencing in 2002, combining these two
key performance factors will result in cash
bonuses ranging from 35 per cent to 250 per
cent of basic salary (against Group performance
ranging from within 10 per cent of plan to 50
per cent above plan).
iii Long Term Incentive Plan (LTIP)
Executive Directors and members of Senior
Management have been eligible to receive
conditional awards of Performance Shares under
the HSBC Holdings Restricted Share Plan and
the HSBC Holdings Restricted Share Plan 2000
since 1997.
Full details of the 2002 conditional awards
to executive Directors, together with vesting
arrangements, are set out on page 146.
It is the Remuneration Committees current
intention that the annual value of awards to
executive Directors and members of Senior
Management will not as a general rule exceed
100 per cent of earnings (defined as base salary
and bonus in respect of the previous
performance year).
In appropriate circumstances, executive
Directors and members of Senior Management
may receive awards under the HSBC Holdings
Restricted Share Plan 2000 and the HSBC
Holdings Group Share Option Plan. Participants
in these plans are also eligible to participate in
the HSBC Holdings savings-related share option
plans on the same terms as other eligible
employees.
In line with prevailing practice in France
and arrangements made at the time of the
acquisition of CCF, C F W de Croisset will
receive an award of options to acquire shares
under the HSBC Holdings Group Share Option
Plan, instead of an award under the HSBC
Holdings Restricted Share Plan 2000; particulars
are set out on page 146.
iv Pension Arrangements
The pension entitlements earned by the
executive Directors during the year are set out
on pages 149 and 150.