Remuneration of Directors, Senior Management and Key Personnel

The Bank’s policy on remuneration is to maintain fair and competitive packages based on business needs and industry practice.
Remuneration of Directors

The level of fees paid to Non-executive Directors is determined by reference to factors including Directors’ workload and commitments and fees paid by comparable institutions.

As regards Executive Directors, the following factors are considered when determining their remuneration packages :

  • business needs;
  • general economic situation;
  • changes in appropriate markets such as supply/demand fluctuations and changes in competitive conditions;
  • individual contributions to results as confirmed in the performance appraisal process; and
  • retention consideration and individual potential.

No individual Director will be involved in decisions relating to his/her own remuneration.

The current scales of Director’s fees, and additional fees for Chairmen and members of the non-executive Board Committees, namely, Audit Committee, Risk Committee, Remuneration Committee and Nomination Committee, are set out below:


  Current Fees
(HK$ '000)
Board of Directors  
Chairman 590
Vice-Chairman Note 1 Nil
Other Directors Note 1 450
Audit Committee  
Chairman 260
Members 160
Risk Committee  
Chairman 260
Members 160
   
Members of both Audit Committee and Risk Committee 280
   
Remuneration Committee/ Nomination Committee  
Chairman 90
Members 60
Note 1
In line with the remuneration policy of HSBC Group, no Director’s fee is payable to those Directors who are full time employees of the Bank and its subsidiaries.
Information relating to the remuneration of each Director for the year ended 31 December 2013 is set out in Note 15 to the Bank’s 2013 Financial Statements.
Remuneration of Senior Management and Key Personnel
There were 10 employees and three employees being classified as Senior ManagementNote 2 and Key PersonnelNote 3 respectively during 2013
Aggregate amount of remunerationNote 4 of the Senior Management and Key Personnel during 2013, split into fixed and variable remuneration, is set out below:
 
2013
(13 employess)
Amount(HK$ '000)
Non-deferred
Deferred
Fixed remuneration
Cash 37,300 -
Variable remuneration
Cash 21,849 3,165
Shares 2,110 11,968
Note 2
Senior Management refers to those executives who are either:
(a) members of the Executive Committee of the Bank, namely, (i) Executive Directors; (ii) senior executives of the Bank at the rank of Band 1; and if not already covered by the aforesaid, (iii) Heads of the Bank’s major business lines, namely, Global Banking and Markets, Retail Banking and Wealth Management, and Commercial Banking; (iv) Chief Risk Officer; (v) Chief Financial Officer; (vi) Chief Operating Officer; and (vii) Head of Human Resources; or
(b) Head(s) of the Bank’s principal subsidiary/subsidiaries with offshore operations and with total assets representing more than 5% of the Bank’s total assets.
Note 3
Key Personnel refers to those executives other than Senior Management, at the rank of Band 3 or above who are engaged in trading and dealing activities which involve the assumption of material risk or the taking on of material exposures on behalf of the Bank and its subsidiaries.
Note 4
Remuneration refers to all remuneration payments payable to employees during 2013 with reference to their tenure as Senior Management and Key Personnel.

Aggregate amount of deferred variable remuneration, split into (a) vested and paid during 2013 and (b) outstanding and unvested as at 31 December 2013, is set out below:
Amount (HK$ '000) Awarded for Performance Year 2013 Awarded for Prior Performance Years
Vested and paid out during 2013
Cash
Shares

-
-

-
6,195
Outstanding and unvested as at 31 December 2013
Cash
Shares

3,165
11,968

-
13,058
There was no deferred variable remuneration being reduced through performance adjustments in 2013.

Quantitative information on employees’ exposure to implicit (e.g. fluctuations in the value of shares or performance units) and explicit adjustments (e.g. malus, clawbacks or similar reversals or downward revaluations of awards) of deferred remuneration and retained remuneration is set out below:
Amount
(HK$ '000)
Total amount of outstanding deferred remuneration and retained remuneration exposed to ex post explicit / implicit adjustments 28,191
Total amount of reductions during 2013 due to:
- Ex post explicit adjustments
- Ex post implicit adjustments

-
+1,066
No Senior Management or Key Personnel has been awarded or paid guaranteed bonus, new sign-on or severance payment during 2013.


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