Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 460

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 460
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 which targets a mid-teens return in each

of the three years from 2025 to 2027 excluding notable items.

The RoTE measure is subject to a CET1 capital ratio underpin. If the

CET1 capital ratio at the end of the performance period is below the

CET1 risk tolerance level set in the risk appetite statement, then the

assessment for this measure will be reduced to nil.

We will increase the weighting of relative TSR to 40% as it is a key

measure of shareholder returns, a material relative measure used by

our peers and in line with investor expectations. No changes have

been made to our relative TSR peer group, which continues to include

more Asian peers to better reflect our growth and investment focus

following a review in 2023.

Following feedback from our shareholders on the metrics used and

recognising the increase in LTI opportunity, we have reduced the

overall weighting of the environment measure from 25% to 20% to

ensure a greater proportion of the LTI is aligned to value creation

while supporting our ESG ambitions.

The Committee completed a comprehensive review of the

environment metrics in the LTI and discussed with major

shareholders. At this stage, financed emission targets remain difficult

to include given challenges in the methodology, timeliness and

frequency of reporting. This was recognised by the investors we

spoke to as part of our policy engagement. We therefore decided to

retain metrics on carbon reduction in our own emissions and

sustainable finance and investment, given we cannot currently use

financed emissions, which is a material metric in supporting our ESG

ambitions.

The Committee will continue to keep the environment measures and

weighting under review for future performance cycles.

Performance targets have been set to balance stretch and

achievability so that awards act as an effective incentive for

management, and incentivise outperformance against our external

strategic commitments. The proposed change in remuneration

structure will be supported by target ranges calibrated to reflect the

increase to the remuneration opportunity.

It was recognised by investors in our engagement that our recent LTI

targets have been set to deliver maximum payouts only for

outperformance compared to consensus and our external strategic

commitments.

For 2025-2027 awards:

– The maximum target for RoTE reflects stretch above plan and

performance forecasts, taking into account the macroeconomic

environment. The minimum target for RoTE is aligned to our

external commitment of mid-te