Annual Financial Report - 32 of 44

RNS Number : 1509A

HSBC Holdings PLC

27 March 2012

 



Pensions

(Audited)

V H C Cheng retired on 27 May 2011 and until that date was a member of the Hong Kong Special Administrative Region Mandatory Provident Fund ('MPF'). Until 27 May 2011 Mr Cheng received an executive allowance of 25% of annual basic salary, less the mandatory contributions to the MPF by both the employer and employee, to fund personal pension arrangements of HK$1,185,578. Until 27 May 2011, the mandatory employer contribution to the MPF in respect of Mr Cheng was HK$5,000.

D J Flint received an executive allowance of 50% of annual basic salary in lieu of personal pension arrangements. The executive allowance for 2011 amounted to £750,000.

A A Flockhart received employer contributions of 50% of basic salary into a personal pension plan from 1 January 2011 to 31 March 2011. From 1 April 2011 Mr Flockhart received employer contributions of 1.8% of basic salary into a personal pension plan and an executive allowance of 48.2% of basic salary. The employer contributions and the executive allowance for the whole of 2011 amounted to £487,500.

S T Gulliver received employer contributions of 19.2% of basic salary into a personal pension plan and an executive allowance of 30.8% of basic salary from 1 January 2011 to 31 March 2011. From 1 April 2011 Mr Gulliver received employer contributions of 4% of basic salary into a personal pension plan and an executive allowance of 46% of basic salary. The employer contributions and the executive allowance for the whole of 2011 amounted to £625,000.

I J Mackay received an executive allowance of 50% of basic annual salary in lieu of personal pension arrangements. The executive allowance for 2011 amounted to £350,000.

Defined Benefit Pension arrangements

	Accrued         annual   pension at 31 December             2011		Increase in       accrued      pension        during            2011		Increase in        accrued       pension during 2011,    excluding any increase  for inflation		Transfer             value     of accrued     pension at   31 December             20101		Transfer            value   of accrued   pension at 31 December             20111		Increase of transfer value      of accrued pension (less       personal contributions)          in 20111		Transfer value         (less personal    contributions) at 31 December 2011 relating to increase in accrued pension           during 2011,         excluding any  increase for                  inflation1
	£000		£000		£000		£000		£000		£000		£000
A A Flockhart2 ...............	307		24		12		4,974		5,638		664		236

1  The transfer value represents a liability of HSBC's pension fund and not a sum paid or due to the individual; it cannot therefore meaningfully be added to annual remuneration.

2  A A Flockhart ceased accrual of pension in the International Staff Retirement Benefits Scheme ('ISRBS') on 30 November 2008 and he has deferred commencement of his pension. The ISRBS retains a liability for a contingent spouse's pension of £134,000 per annum as at 31 December 2011.

The following table shows unfunded pension payments, in respect of which provision has been made, during 2011 to six former Directors of HSBC Holdings.

The payments in respect of R Delbridge and Sir Brian Pearse were made by HSBC Bank plc as former directors of that bank. The payment in respect of C F W de Croisset was made by HSBC France as a former director of that bank.

Unfunded pension payments

	2011 £		2010 £
B H Asher ..................................	106,441		101,858
C F W de Croisset .......................	250,910		237,662
R Delbridge .................................	153,099		146,507
Lord Green .................................	40,946		2,992
Sir Brian Pearse ..........................	63,844		61,095
Sir William Purves ......................	112,679		107,827
	727,919		657,941

Share Plans

(Audited)

At 31 December 2011, the undernamed Directors held options, awards of Performance Shares and Restricted Shares under the HSBC Share Plan and conditional awards of shares under the GPSP to acquire the number of HSBC Holdings ordinary shares set against their respective names.

HSBC Holdings savings-related share option plans

(Audited)

HSBC Holdings ordinary shares of US$0.50

	Date of             award		Exercise        price (£)		Exercisable				At            1 Jan              2011		At          31 Dec              2011
					from1		until
D J Flint .......................................	25 Apr 2007		6.1760		1 Aug 2012		31 Jan 2013		2,650		2,650
A A Flockhart ..............................	29 Apr 2009		3.3116		1 Aug 2014		31 Jan 2015		4,529		4,529
			US$
I J Mackay ...................................	30 Apr 2008		11.8824		1 Aug 2011		31 Jan 2012		1,531		1,531

The HSBC Holdings savings-related share option plans are all-employee share plans under which eligible HSBC employees may be granted options to acquire HSBC Holdings ordinary shares. Employees may make contributions of up to £250 (or equivalent) each month over a period of one, three or five years which may be used on the first, third or fifth anniversary of the commencement of the relevant savings contract, at the employee's election, to exercise the options. The plans help align the interests of employees with the creation of shareholder value and, as such, exercise of the options is not subject to any performance conditions. The options were awarded for nil consideration and are exercisable at a 20% discount to the average market value of the ordinary shares on the five business days immediately preceding the invitation date. No options lapsed during the year. There are no performance criteria conditional upon which the outstanding options are exercisable and there have been no variations to the terms and conditions since the awards were made. The market value per ordinary share at 31 December 2011 was £4.911. The highest and lowest market values per ordinary share during the year were £7.395 and £4.564. Market value is the mid-market price derived from the London Stock Exchange Daily Official List on the relevant date. Under the Securities and Futures Ordinance of Hong Kong, the options are categorised as unlisted physically settled equity derivatives.

1  May be advanced to an earlier date in certain circumstances, e.g. retirement.

Awards of Performance Shares

HSBC Share Plan

(Audited)

HSBC Holdings ordinary shares of US$0.50

	Date of             award		Year in             which            awards        may vest		Awards          held at            1 Jan 2011		Awards vested during year1,2				Awards          held at          31 Dec              2011
							Number		Monetary value
									£000
V H C Cheng ................................	3 Jun 2008		2011		163,188		35,433		230		-3
D J Flint .......................................	3 Jun 2008		2011		470,596		102,184		662		-
A A Flockhart ..............................	3 Jun 2008		2011		160,474		34,844		226		-
S T Gulliver ..................................	3 Jun 2008		2011		69,917		15,181		98		-

Vesting of these awards of Performance Shares is subject to the achievement of the corporate performance conditions set out on pages 265 to 267. Interests in awards of Performance Shares are categorised under the Securities and Futures Ordinance of Hong Kong as the interests of a beneficiary of a trust.

1  The performance conditions of the total shareholder return element of the award were partially met and the following part of the awards vested on 4 April 2011, when the market value per share was £6.48: V H C Cheng, 35,024 shares; D J Flint, 101,003 shares; A A Flockhart, 34,442 shares; and S T Gulliver, 15,006 shares. The following awards representing the fourth interim dividend for 2010 vested on 5 May 2011, when the market value per share was £6.46: V H C Cheng, 409 shares; D J Flint, 1,181 shares; A A Flockhart, 402 shares; and S T Gulliver, 175 shares. The market value per share on the date of the award, 3 June 2008, was £8.56.

2  The performance conditions for the earnings per share, economic profit and the remaining part of the total shareholder return element of the award were not met and, under the terms of the Plan, the following awards were forfeited on 4 April 2011: V H C Cheng, 129,412 shares; D J Flint, 373,193 shares; A A Flockhart, 127,259 shares; and S T Gulliver, 55,445 shares. As a consequence, the fourth interim dividend for 2010 did not accrue on the forfeited shares.

3  Interest at 27 May 2011 - date of retirement.

Awards of Restricted Shares

HSBC Share Plan

(Audited)

HSBC Holdings ordinary shares of US$0.50

	Date of             award		Year in        which       awards   may vest		Awards       held at          1 Jan           2011		Awards made during year				Awards vested during year				Awards       held at        31 Dec               20111
							Number		Monetary          value		Number		Monetary          value
									£000				£000
V H C Cheng ...	2 Mar 2009		2012		510,226		-		-		-		-		514,1292
	1 Mar 2010		2011-20133		198,773		-		-		-		-		202,6372
	15 Mar 2011		2012-2014		-		52,5285		339		21,0116		136		31,8852
D J Flint ..........	1 Mar 2010		2011-20133		316,252		-		-		105,1624		713		220,201
	15 Mar 2011		2012-2014		-		215,3835		1,391		86,1536		557		133,280
A A Flockhart .	3 Mar 2008		2011		15,572		-		-		15,8757		102		-
	2 Mar 2009		2012		514,960		-		-		-		-		535,162
	1 Mar 2010		2011-20133		305,806		-		-		101,6884		689		212,927
	15 Mar 2011		2012-2014		-		139,0795		898		55,6326		359		86,062
S T Gulliver .....	3 Mar 2008		2009-2011		192,796		-		-		194,2708		1,317		-
	1 Mar 2010		2011-20133		1,355,371		-		-		450,6944		3,056		943,723
	15 Mar 2011		2012-2014		-		800,0009		5,168		-		-		825,072
I J Mackay ......	31 Jul 2007		2009-201110		47,679		-		-		49,03511		298		-
	31 Mar 2008		2011		46,252		-		-		47,15212		302		-
	2 Mar 2009		2012		100,309		-		-		-		-		104,244
	1 Mar 2010		2011-20133		59,262		-		-		19,7064		134		41,263
	15 Mar 2011		2012-2014		-		58,1035		375		23,2416		150		35,954

Vesting of Restricted Share awards is normally subject to the Director remaining an employee on the vesting date. The vesting date may be advanced to an earlier date in certain circumstances, e.g. death or retirement. Under the Securities and Futures Ordinance of Hong Kong, interests in Restricted Share awards granted in 2007 and 2008 are categorised as the interests of a beneficiary of a trust and interests in Restricted Share awards granted in 2009, 2010 and 2011 are categorised as the interests of a beneficial owner.

  1  Includes additional shares arising from scrip dividends.

  2  Interest at 27 May 2011 - date of retirement.

  3  33% of the award vests on each of the first and second anniversaries of the date of the award, with the balance vesting on the third anniversary of the date of the award.

  4  At the date of vesting, 28 February 2011, the market value per share was £6.78. The market value per share on the date of the award, 1 March 2010, was £6.82. Market value is the middle market closing price derived from the London Stock Exchange Daily Official List on the relevant date.

  5  At the date of the award, 15 March 2011, the market value per share was £6.46. The number of shares comprises a deferred award and non-deferred award of Restricted Shares. In respect of the deferred award, 33% vests on each of the first and second anniversaries of the date of the award, with the balance vesting on the third anniversary of the date of the award.

  6  The non-deferred award vested immediately on 15 March 2011 and is subject to a 6 month retention period. At the date of vesting, the market value per share was £6.46.

  7  15,691 shares vested on 31 March 2011 when the market value per share was £6.41. The market value per share on the date of the award, 3 March 2008, was £7.90. An award of 184 shares representing the fourth interim dividend for 2010 vested on 5 May 2011 when the market value per share was £6.46.

  8  At the date of vesting, 28 February 2011, the market value per share was £6.78. The market value per share on the date of the award, 3 March 2008, was £7.90.

  9  At the date of the award, 15 March 2011, the market value per share was £6.46. The number of shares comprises a deferred award of Restricted Shares. 33% of the award vests on each of the first and second anniversaries of the date of the award, with the balance vesting on the third anniversary of the date of the award.

10  33% of the award vests on each of the second and third anniversaries of the date of the award, with the balance vesting on the fourth anniversary of the date of the award.

11  49,035 shares vested on 1 August 2011 when the market value per share was £6.08.

12  46,606 shares vested on 31 March 2011 when the market value per share was £6.41. The market value per share on the date of the award, 31 March 2008, was £8.30. An award of 546 shares representing the fourth interim dividend for 2010 vested on 5 May 2011 when the market value per share was £6.46.

Conditional Awards under the GPSP

HSBC Share Plan 2011

(Audited)

HSBC Holdings ordinary shares of US$0.50

	Date of award		Year in             which            awards        may vest		Awards          held at            1 Jan              2011		Awards made during year1				Awards          held at          31 Dec              20112
							Number		Monetary value
									£000
A A Flockhart ..............................	23 Jun 2011		2016		-		176,519		1,061		178,373
S T Gulliver ..................................	23 Jun 2011		2016		-		388,044		2,332		392,119
I J Mackay ...................................	23 Jun 2011		2016		-		108,487		652		109,626

The GPSP is the long-term incentive plan under the HSBC Share Plan 2011. Vesting of GPSP awards is normally subject to the Director remaining an employee on the vesting date. Any shares (net of tax) which the Director becomes entitled to on the vesting date are subject to a retention requirement until cessation of employment. Under the Securities and Futures Ordinance of Hong Kong, interests in awards are categorised as the interests of a beneficial owner.

1  Conditional awards of shares made under the GPSP. At the date of award, 23 June 2011, the market value per share was £6.01.

2  Includes additional shares arising from scrip dividends.

On behalf of the Board

J L Thornton

Chairman of Group Remuneration Committee                                                                                     27 February 2012

 

END

 

 

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