Annual Financial Report - 30 of 41

RNS Number : 8694D

HSBC Holdings PLC

30 March 2011

 



Pensions

(Audited)

V H C Cheng is a member of the Hong Kong Special Administrative Region Mandatory Provident Fund ('MPF') and received an executive allowance of 25% of annual basic salary during 2010, less the mandatory contributions to the MPF by both the employer and employee, to fund personal pension arrangements (HK$2,313,000). During 2010, the mandatory employer contribution to the MPF in respect of Mr Cheng was HK$12,000.

D J Flint received an executive allowance of 55% of basic salary in lieu of personal pension arrangements in the month of January. From 1 February 2010, this allowance was reduced to 50% of basic salary. The executive allowance for the whole of 2010 amounted to £425,224.

A A Flockhart received employer contributions of 40% of basic salary into a personal pension plan in the month of January 2010. From 1 February 2010 Mr Flockhart received employer contributions of 50% of basic salary into a pension plan. The employer contributions for the whole of 2010 amounted to £404,319.

M F Geoghegan received an executive allowance of 50% of basic salary in lieu of pension between 1 January and 25 January 2010. From 26 January 2010, Mr Geoghegan received employer contributions of 50% of basic salary into a pension plan. The employer contributions for the whole of 2010 amounted to £560,486.

Lord Green ceased membership of the HSBC Bank (UK) Pension Scheme on 5 April 2006. Since 6 April 2006, Lord Green has been entitled to receive benefits from an Employer Funded Retirement Benefits Scheme which together with entitlements from the HSBC Bank (UK) Pension Scheme provided benefits to Lord Green that were broadly comparable to an accrual rate of one‑thirtieth of pensionable salary for each year of pensionable service. Lord Green retired on 3 December 2010 and began receiving his pension from 4 December 2010.

S T Gulliver received employer contributions of 30% of basic salary into a personal pension plan in the month of January 2010. From 1 February 2010 Mr Gulliver's pension arrangements were increased to 50% of basic salary. This was delivered as employer contributions of 30% of basic salary into a personal pension plan and an executive allowance of 20% of basic salary. The employer contributions and the executive allowance for the whole of 2010 amounted to £386,667.

I J Mackay received an executive allowance of 50% of basic salary in lieu of pension with effect from his appointment as executive Director on 3 December 2010 (£28,269 for the period to 31 December 2010) to fund personal pension arrangements.

Defined Benefit Pension arrangements

	Accrued         annual   pension at 31 December             2010		Increase in       accrued      pension        during            2010		Increase in        accrued       pension during 2010,    excluding any increase  for inflation		Transfer             value     of accrued     pension at   31 December             20091		Transfer            value   of accrued   pension at 31 December             20101		Increase of transfer value      of accrued pension (less       personal contributions)          in 20101	Transfer     value (less         personal contributions) at 31 December	Transfer value         (less personal    contributions) at 31 December 2010 relating to increase in accrued pensions           during 2010,         excluding any  increase for                  inflation1
	£000		£000		£000		£000		£000		£000		£000
A A Flockhart2 ...............	283		13		13		4,863		4,974		111		201
Lord Green3 ....	-		38		5		19,119		-		381		-

1  The transfer value represents a liability of HSBC's pension funds 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. He received no increase for inflation to his accrued pension on 1 January 2010. The ISRBS retains a liability for a contingent spouse's pension of £129,900 per annum as at 31 December 2010.

3  Lord Green retired as a Director on 3 December 2010 and commenced receiving his pension from 4 December 2010.

The table overleaf shows unfunded pension payments, in respect of which provision has been made, during 2010 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. There were no increases to sterling values of the pensions during 2010.

Unfunded pension payments

	2010 £		2009 £
B H Asher ..................................	101,858		101,858
C F W de Croisset .......................	237,662		247,115
R Delbridge .................................	146,507		146,507
Lord Green .................................	2,992		-
Sir Brian Pearse ..........................	61,095		61,095
Sir William Purves ......................	107,827		107,827
	657,941		664,402

Share Plans

(Audited)

At 31 December 2010, the undernamed Directors held options and awards of Performance Shares and Restricted Shares 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             2010		At         31 Dec             2010
				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		1,5312		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 2010 was £6.511. The highest and lowest market values per ordinary share during the year were £7.404 and £5.962. 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.

2  Interest at 3 December 2010 - date of appointment.

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             2010		Awards vested during year1,2				Awards         held at         31 Dec                20103
							Number		Monetary           value
									£000
V H C Cheng ......................................	5 Mar 2007		2010		218,035		83,769		560		-
	3 Jun 2008		2011		157,852		-		-		163,188
D J Flint .............................................	5 Mar 2007		2010		326,626		125,489		838		-
	3 Jun 2008		2011		455,210		-		-		470,596
A A Flockhart ....................................	5 Mar 2007		2010		145,238		55,799		373		-
	3 Jun 2008		2011		155,227		-		-		160,474
M F Geoghegan ..................................	5 Mar 2007		2010		742,334		285,205		1,905		-
	3 Jun 2008		2011		1,069,746		-		-		1,105,902
Lord Green .........................................	5 Mar 2007		2010		556,750		213,903		1,429		-
	3 Jun 2008		2011		1,251,829		-		-		1,294,1404
S T Gulliver ........................................	5 Mar 2007		2010		161,319		61,979		414		-
	3 Jun 2008		2011		67,631		-		-		69,917

Vesting of these awards of Performance Shares is subject to the achievement of the corporate performance conditions set out on pages 226 to 228. 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 31 March 2010, when the market value per share was £6.68: V H C Cheng, 82,957 shares; D J Flint, 124,273 shares; A A Flockhart, 55,259 shares; M F Geoghegan, 282,440 shares; Lord Green, 211,830 shares; and S T Gulliver, 61,378 shares. The following awards representing the fourth interim dividend for 2009 vested on 5 May 2010, when the market value per share was £6.53: V H C Cheng, 812 shares; D J Flint, 1,216 shares; A A Flockhart, 540 shares; M F Geoghegan, 2,765 shares; Lord Green, 2,073 shares; and S T Gulliver, 601 shares. The market value per share on the date of the award, 5 March 2007, was £8.96.

2  The performance conditions for the earnings per share element 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 31 March 2010: V H C Cheng, 136,506 shares; D J Flint, 204,493 shares; A A Flockhart, 90,931 shares; M F Geoghegan, 464,757 shares; Lord Green, 348,568 shares; and S T Gulliver, 100,998 shares. As a consequence, the fourth interim dividend for 2009 did not accrue on the forfeited shares.

3  Includes additional shares arising from scrip dividends.

4  Interest at 3 December 2010 - 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 on          1 Jan           2010		Awards made during year1				Awards vested during year2				Awards       held at        31 Dec               20103
							Number		Monetary          value		Number		Monetary          value
									£000				£000
V H C Cheng.....	3 Mar 2008		20104		103,936		-		-		104,616		713		-
	2 Mar 2009		2012		493,545		-		-		-		-		510,226
	1 Mar 2010		2013		-		193,534		1,320		-		-		198,773
D J Flint ...........	1 Mar 2010		2011-20135		-		307,917		2,100		-		-		316,252
A A Flockhart ..	31 Oct 2007		2010		64,621		-		-		66,8066		434		-
	3 Mar 2008		2011		15,064		-		-		-		-		15,572
	2 Mar 2009		2012		498,124		-		-		-		-		514,960
	1 Mar 2010		2011-20135		-		297,746		2,031		-		-		305,806
M F Geoghegan	1 Mar 2010		2011-20135		-		586,510		4,000		-		-		602,387
S T Gulliver ......	5 Mar 2007		2008-20105		191,842		-		-		193,099		1,317		-
	3 Mar 2008		2009-20115		388,157		-		-		202,986		1,384		192,796
	1 Mar 2010		2011-20135		-		1,319,648		9,000		-		-		1,355,371
I J Mackay .......	31 Jul 2007		2009-20117		47,6798		-		-		-		-		47,679
	31 Mar 2008		2011		46,2528		-		-		-		-		46,252
	2 Mar 2009		2012		100,3098		-		-		-		-		100,309
	1 Mar 2010		2011-20135		59,2628		-		-		-		-		59,262

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 and 2010 are categorised as the interests of a beneficial owner.

1  At the date of the award, 1 March 2010, the market value per share was £6.82.

2  At the date of vesting, 1 March 2010, the market value per share was £6.82. The market value per share on the dates of the awards, 5 March 2007 and 3 March 2008, was £8.96 and £7.90 respectively.

3  Includes additional shares arising from scrip dividends.

4  Vesting accelerated from 2011 to 2010.

5  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.

6  At the date of vesting, 29 October 2010, the market value per share was £6.49. The market value per share on the date of the award, 31 October 2007 was £9.51.

7  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.

8  Interest at 3 December 2010 - date of appointment.

On behalf of the Board

J L Thornton

Chairman of Remuneration Committee                                                                                                 28 February 2011

 

END

 

 

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