HSBC 2011 Annual Report Download - page 247

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Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
Remuneration policy
The quality and commitment of our human capital is
deemed fundamental to our success and accordingly
the Board aims to attract, retain and motivate the
very best people. As trust and relationships are vital
in our business our broad policy is to recruit those
who are committed to making a long-term career
with the organisation.
HSBC’s reward strategy supports this objective
through focusing on both short and sustainable
performance over the long term. It aims to reward
success, not failure, and be properly aligned with
risk. In order to ensure alignment between
remuneration and our strategy, individual
remuneration is determined through assessment
of performance delivered against both annual and
long-term objectives summarised in performance
scorecards and adherence to the HSBC Values of
being ‘open, connected and dependable’ and acting
with ‘courageous integrity’. Altogether, performance
is judged, not only on what is achieved over the
short and medium term, but also on how it is
achieved as the latter contributes to the sustainability
of the organisation.
The financial and non-financial measures that
comprise the annual and long-term scorecards are
carefully considered to ensure alignment with the
long-term strategy of the Group.
Further information on the Group’s approach to
remuneration is given on page 256.
Employee share plans
To help align the interests of employees with those
of shareholders, share options are granted under all-
employee share plans and discretionary awards of
shares are granted under HSBC’s share plans. The
following are particulars of outstanding employee
share options, including those held by employees
working under employment contracts that are
regarded as ‘continuous contracts’ for the purposes
of the Hong Kong Employment Ordinance. The
options were granted at nil consideration. No options
have been granted to substantial shareholders,
suppliers of goods or services, or in excess of the
individual limit for each share plan. No options were
cancelled by HSBC during the period.
Share options may also be granted under the
HSBC Share Plan 2011, which replaced the HSBC
Share Plan on 27 May 2011, following shareholder
approval at the Annual General Meeting. No share
options have been granted under this plan.
A summary for each plan of the total number
of the options which were awarded, exercised or
lapsed during 2011 is shown in the following tables.
Further details required to be disclosed pursuant
to Chapter 17 of the Rules Governing the Listing
of Securities on The Stock Exchange of Hong
Kong Limited are available on our website at
www.hsbc.com by selecting ‘Investor Relations’,
then ‘Governance’, then ‘Share Plans’, and on the
website of The Stock Exchange of Hong Kong
Limited at www.hkex.com.hk or can be obtained
upon request from the Group Company Secretary,
8 Canada Square, London E14 5HQ. Particulars of
options held by Directors of HSBC Holdings are set
out on page 272.
Note 9 on the Financial Statements gives details
on share-based payments, including discretionary
awards of shares granted under HSBC’s share plans.
All-employee share option plans
All employees employed within the Group on the
first working day of the year may be granted options
to acquire HSBC Holdings ordinary shares under
shareholder-approved all-employee share option
plans. Options under the plans are usually
exercisable after one, three or five years.
The exercise of the options may be advanced to
an earlier date in certain circumstances, for example
on retirement, and may be extended in certain
circumstances, for example on the death of a
participant, the executors may exercise the option up
to six months beyond the normal exercise period.
The middle market closing price for HSBC Holdings
ordinary share quoted on the London Stock
Exchange, as derived from the Daily Official List
on 19 April 2011, the day before options were
granted in 2011, was £6.41.