HSBC 2015 Annual Report Download - page 308

Directors’ Remuneration Report (continued)
Annual report on remuneration
HSBC HOLDINGS PLC
306
• The deferred share awards also include a right to receive dividend equivalents. Dividend equivalents are delivered in the form of additional
shares, in the same time, manner and proportion as the original deferred award at vesting. The expected value of these dividend
equivalents is included in the value of deferred share awards.
Illustration of annual incentives
GPSP
• GPSP awarded as a result of achievement of sustainable long-term performance. Figures shown reflect the face value of awards granted in
2015 and 2014, respectively.
• Award levels are determined by considering performance against enduring performance measures set out in the long-term performance
scorecard. There are no post-grant performance conditions.
• The award is subject to a five-year cliff vesting period during which the Committee has the authority to cancel all or part of the award. On
vesting, the shares (net of tax) must be retained for the duration of the participant’s employment.
• For the 2015 award the outcomes of the performance conditions can be found in the section titled ‘Awards under the GPSP’ on page 310.
Outcomes for the 2014 award can be found in the Directors’ Remuneration Report in the Annual Report and Accounts 2014.
• For the 2014 award, the Committee used their discretion to reduce the executive Directors’ GPSP awards by £500,000 for Stuart Gulliver,
and by £330,000 each for Iain Mackay and Marc Moses.
• The GPSP awards also include a right to receive dividend equivalents for the period between the grant and the vesting date. Dividend
equivalents on the GPSP awards will be delivered when the GPSP awards vest. There was no vesting of historical GPSP awards in 2015. The
expected value of these dividend equivalents is included in the value of GPSP awards.
Illustration of GPSP
Award level
based on 2015
performance
2015 2016 2017 2018 2019 and beyond
Awards subject to malus and clawback provisions at the discretion of the Remuneration Committee
6-month
retention
Non- deferred portion Deferred portion
40% 60%
Performance period
50% paid
in shares
released
after six
months
6 months 1 year 1 year
Award made
in March
2016, 50%
paid in cash
immediately
3-year vesting period
Mar Sep Mar Mar Mar
33% vests on or
around the first
anniversary of
grant and subject to
6-month retention
34% vests on or
around the third
anniversary of
grant and subject to
6-month retention
33% vests on or
around the second
anniversary of
grant and subject to
6-month retention
Performance period
Value of GPSP award fluctuates up or down
based on share price performance
Award level
based on 2015
and long-term
sustainable
performance
Although shares
are fully vested,
executive Directors
must retain the
shares for duration
of employment
2015 2016 2017 2018 2019 2020 2021Historical to and beyond
Award made in
March 2016
Award vests fully
after five years
in March 2021
Awards subject to malus and clawback provisions at the discretion of the Remuneration Committee
Vesting awards
subject to retention
5-year vesting period