Annual Financial Report - 42 of 56

RNS Number : 6365S

HSBC Holdings PLC

18 March 2016

 

Everyone at HSBC has a responsibility for helping to create a safe working environment. Employees are expected to take ownership of their safety and are encouraged and empowered to report any concerns.

Corporate Real Estate has overall responsibility for setting global health and safety policies and standards. Achieving these policies and standards is the responsibility of each country's Chief Operating Officer. A global programme in 2015 involved the review of 1,850 premises in high and medium risk earthquake zones resulting in training and awareness for staff and the development of risk reduction programmes.

In terms of physical and geopolitical risk, Global Security and Fraud Risk provides regular security risk assessments to assist management in judging the level of terrorist and violent criminal threat. Its regional equivalents conduct biannual security reviews of all critical Group buildings to ensure measures to protect our staff, buildings, assets and information are appropriate to the level of threat. HSBC remains committed to the effective management of health and safety and protecting employees, customers and visitors to HSBC.

Employee health and safety

		2015		2014		2013
Number of employee workplace fatalities		-		21		-
Accidents involving more than three days' absence		110		96		101
All accident rate per 100,000 employees		274		388		355

1   Non-HSBC staff working on HSBC-related activity.

Remuneration policy

The quality and commitment of our employees is 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 goal is to recruit those who are committed to making a long-term career with the Group.

HSBC's reward strategy supports this objective through balancing both short-term and sustainable performance. Our reward strategy aims to reward success, not failure, and be properly aligned with our risk framework and related outcomes. In order to ensure alignment between remuneration and our business 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 long-term, but also on how it is achieved, as the latter contributes to the sustainability of the Group.

The financial and non-financial measures incorporated in the annual and long-term scorecards are carefully considered to ensure alignment with the long-term strategy of the Group.

Employee share plans

Share options and discretionary awards of shares granted under HSBC share plans align the interests of employees with the creation of shareholder value. The tables on the following pages set out the particulars of outstanding 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 and suppliers of goods or services, nor in excess of the individual limit for each share plan. No options were cancelled by HSBC during the year.

A summary for each plan of the total number of the options which were granted, exercised or lapsed during 2015 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/investor-relations/governance/ 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 314.

Note 6 on the Financial Statements gives details of share-based payments, including discretionary awards of shares granted under HSBC share plans.

All-employee share plans

HSBC operates all-employee share option plans under which options are granted over HSBC ordinary shares. Subject to leaver provisions, options are normally exercisable after three to five years. During 2015, options were granted at the middle market closing price for HSBC Holdings ordinary shares quoted on the London Stock Exchange which, as derived from the Daily Official List on 21 September 2015, the day prior to grant, was £4.95.

The all-employee share option plans will terminate on 23 May 2025 unless the Directors resolve to terminate the plans at an earlier date. There will be no further grants under the HSBC Holdings Savings-Related Share Option Plan: International.

The HSBC International Employee Share Purchase Plan was introduced in 2013 and now includes employees based in 25 jurisdictions.

Further information on the Group's approach to remuneration is given on page 285.

HSBC Holdings All-employee Share Option Plans

													HSBC Holdings ordinary shares
Dates of awards				Exercise price				Exercisable					At		Granted		Exercised		Lapsed		At
from		to		from		to		from		to			1 Jan 2015		during year		during year		during year		31 Dec 2015
Savings-Related Share Option Plan1
29 Apr 2009		22 Sep 2015		(£) 3.3116		(£) 5.4738		1 Aug 2014		30 April 2021			53,743,955		52,629,208		12,450,711		22,212,633		71,709,819
Savings-Related Share Option Plan: International2
29 Apr 2009		24 Apr 2012		(£) 3.3116		(£) 5.4573		1 Aug 2014		31 Jan 2018			3,714,059		-		2,250,853		332,215		1,130,991
29 Apr 2009		24 Apr 2012		($) 4.8876	($) 8.2094			1 Aug 2014		31 Jan 2018			1,867,328		-		907,523		294,360		665,445
29 Apr 2009		24 Apr 2012		(€) 3.6361		(€) 6.0657		1 Aug 2014		31 Jan 2018			571,502		-		376,331		41,561		153,610
29 Apr 2009		24 Apr 2012	(HK$) 37.8797		(HK$) 63.9864			1 Aug 2014		31 Jan 2018			6,468,782		-		5,134,394		219,558		1,114,830

1   The weighted average closing price of the shares immediately before the dates on which options were exercised was £5.72.

2   The weighted average closing price of the shares immediately before the dates on which options were exercised was £5.73.

Discretionary share option plans

There have been no grants of discretionary share options under employee share plans since 30 September 2005.

HSBC Holdings ordinary shares

Dates of awards

Exercise price (£)

Exercisable

At

Exercised

Lapsed

At

from

to

1 Jan 2015

during year

during year

31 Dec 2015

HSBC Holdings Group Share Option Plan1

20 Apr 2005

7.2869

20 Apr 2008

20 Apr 2015

6,373,982

-

6,373,982

-

HSBC Share Plan1

30 Sep 2005

7.9911

30 Sep 2008

30 Sep 2015

86,046

-

86,046

-

1   The HSBC Holdings Group Share Option Plan expired on 26 May 2005 and the HSBC Share Plan expired on 27 May 2011. No options have been granted under the Plans since that date.

Other disclosures

Further information about share capital, Directors' interests, dividends and shareholders is set out in the Appendix to this section on page 281.

Annual General Meeting

The Annual General Meeting ('AGM') will be held at the Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1P 3EE on Friday 22 April 2016 at 11.00am.

An informal meeting of shareholders will be held at 1 Queen's Road Central, Hong Kong on Monday 18 April 2016 at 4.30pm.

A live webcast of the AGM will be available on www.hsbc.com. A recording of the proceedings will be available shortly after the conclusion of the AGM until 22 May 2016 on www.hsbc.com.

On behalf of the Board

Douglas Flint, Group Chairman 

HSBC Holdings plc

Registered number 617987

22 February 2016

Appendix to Corporate Governance - Other disclosures

Share capital

Issued share capital

The nominal value of HSBC Holdings' issued share capital paid up at 31 December 2015 was $9,842,562,967 divided into 19,685,096,934 ordinary shares of $0.50 each, 1,450,000 non-cumulative preference shares of $0.01 each and 1 non‑cumulative preference share of £0.01, representing approximately 99.9999%, 0.0001%, and 0%, respectively, of the nominal value of HSBC Holdings' total issued share capital paid up at 31 December 2015.

Rights and obligations attaching to shares

The rights and obligations attaching to each class of ordinary and non-cumulative preference shares in our share capital are set out in full in our Articles of Association. The Articles of Association may be amended by special resolution of the shareholders and can be found on our website at www.hsbc.com/about-hsbc/corporate-governance/corporate-governance-codes.

Ordinary shares

HSBC Holdings has one class of ordinary share, which carries no right to fixed income. There are no voting restrictions on the issued ordinary shares, all of which are fully paid. On a show of hands, each member present has the right to one vote at general meetings. On a poll, each member present or voting by proxy is entitled to one vote for every $0.50 nominal value of share capital held. There are no specific restrictions on the transfer of ordinary shares which are governed by the general provisions of the Articles of Association and prevailing legislation.

At the 2012 AGM, shareholders gave authority to the Directors to offer a scrip dividend alternative until the earlier of the conclusion of the AGM in 2017 or 24 May 2017. In line with the Investment Association guidelines, shareholders' approval is being sought at the 2016 AGM to renew this authority for a further three-year period, expiring on the earlier of the conclusion of the AGM in 2019 or 21 April 2019.

Information on the policy adopted by the Board for paying interim dividends on the ordinary shares may be found on page 470, under the heading 'Shareholder Information'.

Preference shares

The preference shares, which have preferential rights to income and capital, do not, in general, confer a right to attend and vote at general meetings.

There are three classes of preference shares in the share capital of HSBC Holdings; non-cumulative preference shares of $0.01 each (the 'dollar preference shares'); non-cumulative preference shares of £0.01 each (the 'sterling preference shares'); and non-cumulative preference shares of €0.01 (the 'euro preference shares'). The dollar preference shares in issue are Series A dollar preference shares and the sterling preference share in issue is a Series A sterling preference share. There are no euro preference shares in issue.

Information on dividends declared for 2015 and 2016 may be found on page 283, under the heading 'Dividends and shareholders' and in Note 9 to the Financial Statements.

Further details of the rights and obligations attaching to the HSBC Holdings' issued share capital may be found in Note 35 to the Financial Statements.

Share capital changes in 2015

The following events occurred during the year in relation to the ordinary share capital of HSBC Holdings:

Scrip dividends

		HSBC Holdings ordinary shares issued				Aggregate        nominal value		Market value per share
Issued in lieu of		on		number		$		$		£
Fourth interim dividend for 2014		30 April 2015		236,223,184		118,111,592		8.5121		5.6536
First interim dividend for 2015		8 July 2015		24,351,484		12,175,742		9.4959		6.2020
Second interim dividend for 2015		2 October 2015		18,425,272		9,212,636		8.6907		5.5464
Third interim dividend for 2015		3 December 2015		96,956,825		48,478,413		7.8417		5.1270

All-employee share plans

	l	Number		Aggregate        nominal value				Exercise price
	l			$				from		to
HSBC Holdings savings-related share option plans	l
HSBC ordinary shares issued in £	l	14,701,564		7,350,782		£		3.3116		5.4738
HSBC ordinary shares issued in HK$	l	5,134,394		2,567,197		HK$		37.8797		63.9864
HSBC ordinary shares issued in $	l	907,523		453,762		US$		4.8876		8.2094
HSBC ordinary shares issued in €	l	376,331		188,166		€		3.6361		6.0657
Options over HSBC ordinary shares lapsed	l	23,100,327		11,550,164
Options over HSBC ordinary shares granted in response to approximately 28,000 applications from HSBC employees in the UK on 22 September 2015	l	52,629,208
	l
HSBC International Employee Share Purchase Plan	l	39,763		19,882		£		4.8740		6.2590
	l
Plan d'Epargne	l
HSBC ordinary shares issued for the benefit of non-UK resident employees of HSBC France and its subsidiaries	l	1,497,450		748,725		€		7.4221

HSBC share plans

		HSBC Holdings ordinary shares		Aggregate nominal value		Market value per share
	l	issued		$		from (£)		to (£)
Vesting of awards under the HSBC Share Plan and HSBC Share Plan 2011	l	68,608,884		34,304,442		4.8555		6.4110

Authorities to allot and to purchase shares and pre-emption rights

At the AGM in 2015, shareholders renewed the general authority for the Directors to allot new shares up to 12,823,397,868 ordinary shares, 15,000,000 non-cumulative preference shares of £0.01 each, 15,000,000 non-cumulative preference shares of $0.01 each and 15,000,000 non-cumulative preference shares of €0.01 each. Within this, the Directors have authority to allot up to a maximum of 961,754,840 ordinary shares wholly for cash to persons other than existing shareholders. Shareholders also renewed the authority for the Directors to make market purchases of up to 1,923,509,680 ordinary shares. The Directors have not exercised this authority.

In addition, shareholders gave authority for the Directors to grant rights to subscribe for, or to convert any security into, no more than 3,627,000,000 ordinary shares in relation to any issue by HSBC Holdings or any member of the Group of contingent convertible securities that automatically convert into or are exchanged for ordinary shares in HSBC Holdings in prescribed circumstances. Further details about the issue of contingent convertible securities may be found in Note 35 on the Financial Statements.

Other than as disclosed in the table above headed 'Share capital changes in 2015', the Directors did not allot any shares during 2015.

Treasury shares

In accordance with the terms of a waiver granted by the Hong Kong Stock Exchange on 19 December 2005, HSBC Holdings will comply with the applicable law and regulation in the UK in relation to the holding of any shares in treasury and with the conditions of the waiver in connection with any shares it may hold in treasury. Pursuant to Chapter 6 of the UK Companies Act 2006, no shares are currently held in treasury.

Directors' interests

Pursuant to the requirements of the UK Listing Rules and according to the register of Directors' interests maintained by HSBC Holdings pursuant to section 352 of the Securities and Futures Ordinance of Hong Kong, the Directors of HSBC Holdings at 31 December 2015 had interests, all beneficial unless otherwise stated, in the shares or debentures of HSBC Holdings and its associated corporations as tabulated overleaf.

Irene Lee and Pauline van der Meer Mohr did not hold any shares or debentures of HSBC Holdings plc or its associated corporations during the year.

No Directors held any short position as defined in the Securities and Futures Ordinance of Hong Kong in the shares or debentures of HSBC Holdings and its associated corporations. Save as stated above, none of the Directors had an interest in any shares or debentures of HSBC Holdings or any associated corporation at the beginning or at the end of the year, and none of the Directors or their connected persons were awarded or exercised any right to subscribe for any shares or debentures in any HSBC corporation during the year.

Directors' interests - shares and debentures

				At 31 December 2015
		At             1 January                      2015		Beneficial                   owner		Child              under 18             or spouse		Jointly       with another                 person		Trustee		Total               interests1
HSBC Holdings ordinary shares
Phillip Ameen3		-		5,000		-		-		-		5,000
Kathleen Casey3		-		3,540		-		-		-		3,540
Safra Catz3		20,045		20,970		-		-		-		20,970
Laura Cha		-		5,200		-		-		-		5,200
Lord Evans of Weardale		5,519		7,416		-		-		-		7,416
Joachim Faber		24,105		45,778		-		-		-		45,778
Rona Fairhead		76,524		-		-		77,888		-		77,888
Douglas Flint		400,748		401,450		-		-		-		401,450
Stuart Gulliver		2,611,188		2,684,380		176,885		-		-		2,861,265
Sam Laidlaw		36,768		36,596		-		-		1,4162		38,012
John Lipsky3		15,820		16,165		-		-		-		16,165
Rachel Lomax		15,500		18,900		-		-		-		18,900
Iain Mackay		79,933		223,872		-		-		-		223,872
Heidi Miller3		3,575		3,695		-		-		-		3,695
Marc Moses		480,423		624,643		-		-		-		624,643
Sir Simon Robertson		22,981		34,118		-		-		-		34,118
Jonathan Symonds		20,553		16,886		4,885		-		-		21,771
HSBC USA Inc. $2.8575 Cumulative Preferred Shares, Series Z
Phillip Ameen		31		-		-		-		-		-
		RMBm		RMBm		RMBm		RMBm		RMBm		RMBm
HSBC Bank 2.875% Notes 2015
Joachim Faber4		5.1		-		-		-		-		-

1   Executive Directors' other interests in HSBC Holdings ordinary shares arising from the HSBC Holdings savings-related share option plans and the HSBC Share Plan 2011 are set out in the Scheme interests in the Directors' Remuneration Report on page 312. At 31 December 2015, the aggregate interests under the Securities and Futures Ordinance of Hong Kong in HSBC Holdings ordinary shares, including interests arising through employee share plans were: Douglas Flint - 404,369; Stuart Gulliver - 5,909,069; Iain Mackay - 1,478,507; and Marc Moses - 2,171,463. Each Director's total interests represents less than 0.03% of the shares in issue.

2   Non-beneficial.

3   Phillip Ameen has an interest in 1,000, Kathleen Casey has an interest in 708, Safra Catz has an interest in 4,194, John Lipsky has an interest in 3,233 and Heidi Miller has an interest in 739 listed American Depositary Shares ('ADS'), which are categorised as equity derivatives under Part XV of the Securities and Futures Ordinance of Hong Kong. Each ADS represents five HSBC Holdings ordinary shares.

4   Non-beneficial interest in renminbi ('RMB') 1.2m 2.875% Notes 2015 which were redeemed on the due date of 30 April 2015.

Since the end of the year, the aggregate interests of the following Director have increased by the number of HSBC Holdings ordinary shares shown against his name:

HSBC Holdings ordinary shares
Douglas Flint (beneficial owner)		311

1   The acquisition of shares in the HSBC Holdings UK Share Incentive Plan through regular monthly contributions.

There have been no other changes in the shares or debentures of the Directors from 31 December 2015 to the date of this report. Any subsequent changes up to the last practicable date before the publication of the Notice of Annual General Meeting will be set out in the notes to that notice.

At 31 December 2015, non-executive Directors and senior management (being executive Directors and Group Managing Directors of HSBC Holdings) held, in aggregate, beneficial interests in 18,959,851 HSBC Holdings ordinary shares (0.10% of the issued ordinary shares). At 31 December 2015, executive Directors and senior management held, in aggregate, options to subscribe for 29,128 HSBC Holdings ordinary shares under the HSBC Holdings savings-related share option plans. These options are exercisable between 2017 and 2021 at prices ranging from £4.0472 to £5.1887 per ordinary share.

Dividends and shareholders

Dividends for 2015

First, second and third interim dividends for 2015, each of $0.10 per ordinary share, were paid on 8 July 2015, 2 October 2015 and 3 December 2015, respectively. Note 9 on the Financial Statements gives more information on the dividends declared in 2015. On 22 February 2016, the Directors declared a fourth interim dividend for 2015 of $0.21 per ordinary share in lieu of a final dividend, which will be payable on 20 April 2016 in cash in US dollars, or in sterling or Hong Kong dollars at exchange rates to be determined on 11 April 2016, with a scrip dividend alternative. As the fourth interim dividend for 2015 was declared after 31 December 2015 it has not been included in the balance sheet of HSBC as a debt. The reserves available for distribution at 31 December 2015 were $46,591m.

A quarterly dividend of $15.50 per 6.20% non-cumulative US dollar preference share, Series A ('Series A dollar preference share'), (equivalent to a dividend of $0.3875 per Series A American Depositary Share, each of which represents one-fortieth of a Series A dollar preference share), was paid on 16 March, 15 June, 15 September and 15 December 2015.

Dividends for 2016

Quarterly dividends of $15.50 per Series A dollar preference share (equivalent to a dividend of $0.3875 per Series A American Depositary Share, each of which represents one-fortieth of a Series A dollar preference share) and £0.01 per Series A sterling preference share were declared on 5 February 2016 for payment on 15 March 2016.

Communication with shareholders

Communication with shareholders is given high priority. The Board has adopted a shareholder communication policy which is available on www.hsbc.com. Extensive information about our activities is provided to shareholders in the Annual Report and Accounts, the Strategic Report and the Interim Report which are available on www.hsbc.com. There is regular dialogue with institutional investors, and enquiries from individuals on matters relating to their shareholdings and our business are welcomed and are dealt with in an informative and timely manner. All shareholders are encouraged to attend the Annual General Meeting or the informal meeting of shareholders held in Hong Kong to discuss our progress. Shareholders may send enquiries to the Board in writing to the Group Company Secretary, HSBC Holdings plc, 8 Canada Square, London E14 5HQ or by sending an email to [e-mail].

Shareholders may require the Directors to call a general meeting other than an annual general meeting as provided by the UK Companies Act 2006. Requests to call a general meeting may be made by members representing at least 5% of the paid-up capital of the Company as carries the right of voting at general meetings of HSBC Holdings (excluding any paid-up capital held as treasury shares). A request must state the general nature of the business to be dealt with at the meeting and may include the text of a resolution that may properly be moved and is intended to be moved at the meeting. A request may be in hard copy form or in electronic form and must be authenticated by the person or persons making it. A request may be made in writing to the postal address referred to in the paragraph above or by sending an email to [e-mail]. At any general meeting convened on such request no business shall be transacted except that stated by the requisition or proposed by the Board.

Notifiable interests in share capital

At 31 December 2015, HSBC Holdings had received the following notification of major holdings of voting rights pursuant to the requirements of Rule 5 of the Disclosure Rules and Transparency Rules:

·     BlackRock, Inc. gave notice on 9 December 2009 that on 7 December 2009 it had the following: an indirect interest in HSBC Holdings ordinary shares of 1,142,439,457; qualifying financial instruments with 705,100 voting rights that may be acquired if the instruments are exercised or converted; and financial instruments with similar economic effect to qualifying financial instruments which refer to 234,880 voting rights, each representing 6.56%, 0.0041% and 0.0013%, respectively, of the total voting rights at that date.

At 31 December 2015, according to the register maintained by HSBC Holdings pursuant to section 336 of the Securities and Futures Ordinance of Hong Kong:

·   JPMorgan Chase & Co. gave notice on 24 December 2015 that on 22 December 2015 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,018,886,506 shares; a short position of 191,280,267 shares; and a lending pool of 577,920,072 shares, each representing 5.17%, 0.97% and 2.93%, respectively, of the ordinary shares in issue at that date. Since 31 December 2015 and following interim notifications on 13 and 19 January, JPMorgan Chase & Co. gave notice on 21 January 2016 that on 19 January 2016 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,031,430,337 shares; a short position of 202,548,058 shares; and a lending pool of 570,470,431 shares, each representing 5.23%, 1.02% and 2.89%, respectively, of the ordinary shares in issue at that date; and

·   BlackRock, Inc. gave notice on 23 December 2015 that on 20 October 2015 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,266,331,205 shares and a short position of 4,177,847 shares, each representing 6.60% and 0.02%, respectively, of the ordinary shares in issue at that date. Since 31 December 2015 and following interim notifications on 22 January, BlackRock, Inc. gave notice on 26 January 2016 that on 21 January 2016 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,375,525,890 shares and a short position of 7,428,578 shares, each representing 6.99% and 0.04%, respectively, of the ordinary shares in issue at that date.

Sufficiency of float

In compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited at least 25% of the total issued share capital has been held by the public at all times during 2015 and up to the date of this report.

Dealings in HSBC Holdings listed securities

Except for dealings as intermediaries by subsidiaries of HSBC Holdings plc, neither HSBC Holdings plc nor any of its subsidiaries purchased, sold or redeemed any of its securities listed on the Stock Exchange of Hong Kong Limited during the year ended 31 December 2015.

 

END

 

 

ACSUWSVRNSAOAAR