HSBC 2012 Annual Report Download - page 357

355
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
• Long-term incentives: long-term incentives
include all other awards where final vesting is
determined as a result of the achievement of
performance conditions that end in the year
being reported on. For 2012 this would only
include the 2013 GPSP.
The GPSP awards to be granted in 2013 in
respect of 2012 were assessed against the 2012 long-
term scorecard detailed on page 357. The award is
subject to a five-year vesting period during which
the Committee has the authority to claw back part
or all of the award. On vesting, the net of tax shares
must be retained until the participant retires.
Variable pay outcomes
(Unaudited)
S T Gulliver I J Mackay
Maximum
multiple
2012
multiple
awarded
2012
£000
2011
£000
2012
multiple
awarded
2012
£000
2011
£000
Salary1 ......................................... 1.00 1.00 1,250 1,250 1.00 700 700
Annual incentive2 ........................ 3.00
1.56 1,950 2,156 1.92 1,348 1,086
GPSP awards3 ............................. 6.00
2.40 3,000 3,750 2.00 1,400 700
Total ............................................ 6,200 7,156 3,448 2,486
1 As disclosed in the Directors’ emoluments table on page 361.
2 50% of the annual incentive is delivered in cash with the remaining 50% in shares. 60% of the annual incentive for 2012 is deferred for
five years. 100% vests on the fifth anniversary of grant subject to the successful completion of the Deferred Prosecution Agreements.
During the vesting period the Committee has the authority to claw back part or all of the award.
3 As disclosed in the 2012 long-term scorecard and performance outcome on page 357. The award is subject to a five-year vesting period
during which the Committee has the authority to claw back part or all of the award. On vesting, the net of tax shares must be retained
until the participant retires.
Annual incentive
Maximum face
value of award
Performance
outcome
Awards
made
Director
S T Gulliver .............................................................................................. 300% 52% 156%
I J Mackay ................................................................................................ 300% 64% 192%
Determining executive Directors’
performance
S T Gulliver
The annual incentive award made to S T Gulliver
in respect of 2012 reflected the Committee’s
assessment of the extent to which he had achieved
the personal and corporate objectives set for him
within his performance scorecard as agreed by
the Board at the beginning of the year. This
measurement took into account his performance
against both the financial and non-financial measures
which had been set to reflect the risk appetite and
strategic priorities determined by the Board to be
appropriate for 2012.
In order for any award of annual incentive to
be made under the above performance scorecard,
the Committee firstly had to satisfy itself that
S T Gulliver had personally met and shown
leadership in promoting HSBC Values. This over-
riding test assessed behaviour around the HSBC
Values principles of being ‘open, connected and
dependable’ and acting with ‘courageous integrity’.
Independent feedback was taken from direct reports
and others lower in the organisation as well as from
the Group Chairman. Taking this into account
as well as its own experience and observation,
including noting how S T Gulliver had dealt with
situations where HSBC Values had not been met,
the Committee concluded that S T Gulliver had
exhibited strong leadership and personal behaviour
in this area and so met the required standard.
In aggregate, in assessing the calibration of
S T Gulliver’s 2012 annual incentive against his
theoretical maximum opportunity of three times
base salary, an overall score of 52% (2011: 57.5%)
of that maximum opportunity was judged to have
been achieved. The achievement of the financial
element of the scorecard was scored marginally
higher than the non-financial measures. A summary
of the assessment and rationale for the conclusions
is set out below. Unless otherwise indicated, the
figures in parentheses denote the opportunity within
the scorecard.