HSBC 2007 Annual Report Download - page 378

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Notes 8 and 9
376
Summary
2007 2006 2005 2004
US$m US$m US$m US$m
Defined benefit obligation ............................................ (1,038) (1,106) (1,004) (982)
Fair value of plan assets ............................................... 146 133 107 79
Net deficit ..................................................................... (892) (973) (897) (903)
Experience gains/(losses) on plan liabilities ................ 15 (12) 19 (15)
Experience gains/(losses) on plan assets ...................... (6) (1) 1 –
Gains/(losses) from changes in actuarial assumptions . 94 (25) (63) 20
Total net actuarial gains/(losses) .................................. 103 (38) (43) 5
Actuarial gains and losses represent experience adjustments on plan assets and liabilities as well as adjustments
arising from changes in actuarial assumptions. Total cumulative net actuarial gains recognised in equity at
31 December 2007 were US$27 million (2006: US$76 million cumulative losses).
The actuarial assumptions of the healthcare cost trend rates have a significant effect on the amounts recognised. A
one percentage point change in assumed healthcare cost trend rates would have the following effects on amounts
recognised in 2007:
2007 2006
1% increase 1% decrease 1% increase 1% decrease
US$m US$m US$m US$m
Increase/(decrease) of the aggregate of the current
service cost and interest cost ...................................... 14 (10) 8 (6)
Increase/(decrease) of defined benefit obligation ........ 110 (100) 103 (111)
HSBC Holdings
Employee compensation and benefit expense in respect of HSBC Holdings’ employees in 2007 amounted to
US$257 million (2006: US$193 million). The average number of persons employed by HSBC Holdings during 2007
was 595 (2006: 505).
Employees of HSBC Holdings who are members of defined benefit pension plans are principally members of either
the HSBC Bank (UK) Pension Scheme or the HSBC International Staff Retirement Benefits Scheme. HSBC
Holdings pays contributions to plans in accordance with schedules determined by the Trustees following consultation
with qualified actuaries.
Directors’ emoluments
The aggregate emoluments of the Directors of HSBC Holdings, computed in accordance with Part I of Schedule 6 of
the Companies Act, were:
2007 2006 2005
US$000 US$000 US$000
Fees .................................................................................................................. 2,626 2,660 2,100
Salaries and other emoluments ........................................................................ 7,929 7,774 12,869
Bonuses ............................................................................................................ 8,938 10,705 13,264
19,493 21,139 28,233
Gains on the exercise of share options ............................................................ 13 3 17
Vesting of Long-Term Incentive awards ......................................................... 4,563 18,975 24,221
In addition, there were payments under retirement benefit agreements with former Directors of US$1,183,960 (2006:
US$996,098). The provision at 31 December 2007 in respect of unfunded pension obligations to former Directors
amounted to US$18,491,117 (2006: US$17,759,454).
During the year, aggregate contributions to pension schemes in respect of Directors were US$545,854 (2006:
US$889,241), including US$460,564 (2006: US$395,740) arising from a Director’s waiver of bonus.
Discretionary bonuses for Directors are based on a combination of individual and corporate performance and are
determined by the Remuneration Committee. Details of Directors’ remuneration, share options and conditional