HSBC 2002 Annual Report Download - page 176

HSBC HOLDINGS PLC
Directors’ Remuneration Report (continued)
174
£000
Sir John Bond .......................................... 1,100
W R P Dalton........................................... 750
D G Eldon................................................ 500
D J Flint ................................................... 750
S K Green ................................................ 750
A W Jebson.............................................. 750
Total......................................................... 4,600
No share options will be granted under the HSBC
Holdings Group Share Option Plan in respect of
2002 to the executive Directors listed above; they
have not received share option awards since the
HSBC Holdings Restricted Share Plan was
introduced in 1997.
No award under the HSBC Holdings Restricted
Share Plan 2000 will be made to C F W de Croisset
in respect of 2002. Mr de Croisset will instead
receive an award of options to acquire 206,000
ordinary shares of US$0.50 each under the HSBC
Group Share Option Plan. Taking account of market
practice in France, transitional arrangements will
gradually align share options awards in CCF more
closely with those elsewhere in HSBC. In this
respect only 50 per cent of the above-mentioned
award will be subject to the same TSR performance
conditions set out below for the HSBC Holdings
Restricted Share Plan 2000. Any future share option
awards he may receive will be wholly subject to
these performance conditions. In accordance with
the arrangements agreed at the acquisition of CCF in
2000, the HSBC Group Share Option Plan awards
made to Mr de Croisset in 2001 and 2002 were not
subject to performance conditions.
The 1998 Restricted Share Plan awards were
subject to performance conditions of earnings per
share, to be achieved in whole or in part, as follows:
• earnings per share in the year 2001 (the fourth
year of the performance period) to be greater
than earnings per share in 1997 (the base year
for the calculation) by a factor equivalent to the
composite rate of inflation ( a weighted average
of inflation in the UK, USA and Hong Kong)
plus 2 per cent, compounded over each year of
the performance period;
• earnings per share to increase relative to the
previous year in not less than three of the four
years of the performance period; and
• cumulative earnings per share over the four
years of the performance period, 1998 to 2001
inclusive, must exceed an aggregate figure
calculated by compounding 1997 earnings per
share by a factor equivalent to the annual
composite rate of inflation plus 2 per cent for
each year of the performance period.
On meeting all of these three primary tests, 50
per cent of the conditional awards would be
released to each eligible participant. A secondary
test would apply such that, if the cumulative
earnings per share over the performance period
exceeded an aggregate figure calculated by
compounding 1997 earnings per share by a factor
equivalent to the same annual composite rate of
inflation as described above, plus 5 per cent or
more, or 8 per cent or more, for each year of the
performance period, 75 per cent or 100 per cent
respectively of the conditional awards would be
released.
In accordance with the rules of the plan, as these
tests were not satisfied over the years 1998 to 2001,
the same tests are to be applied over the years 1999
to 2002. If the tests are not satisfied, the conditional
share awards will be forfeited.
From 1999, the vesting of awards has been
linked to the attainment of predetermined TSR
targets as set out below.
Particulars of executive Directors' interests in
shares held in the Restricted Share Plan are set out
on page 185.
The HSBC Holdings Restricted Share Plan
2000
Purpose
The HSBC Holdings Restricted Share Plan 2000 is
intended to reward the delivery of sustained
financial growth of HSBC Holdings. So as to align
the interests of the Directors and senior employees
more closely with those of shareholders, the HSBC
Holdings Restricted Share Plan 2000 links the
vesting of 2003 awards to the attainment of
predetermined TSR targets.
Total Shareholder Return (TSR) is defined as
the growth in share value and declared dividend
income during the relevant period. In calculating
TSR, dividend income is assumed to be reinvested in
the underlying shares.