Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 429

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 429
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 in favour. The most significant item on the Committee's agenda this year was the review of the Directors’ remuneration policy. The changes and supporting rationale are set out over the following pages. We present the formal policy for shareholder approval before describing the key remuneration decisions for our executive Directors for 2024, our approach to wider workforce reward and Committee governance. Further information and disclosure is provided at the end of the report to meet our reporting obligations in the UK and Hong Kong. 2025 executive Director remuneration policy Commencing in 2023, the Committee undertook a detailed review of the executive Directors’ remuneration policy to ensure it remains appropriate given the size and complexity of the Group, the talent market in which we compete and regulatory and best practice developments. We extensively engaged with major shareholders, representing 65% of those who voted at the 2024 AGM, and proxy advisory bodies. Shareholders were supportive of the proposals and understood the rationale for change. We received valuable feedback on our disclosure, which we have covered within this report. Our discussions focused on the need for stretching performance targets, and some individual shareholders had feedback on specific performance measures. The Committee carefully considered all feedback received, which has directly influenced final proposals. Context for the review and overall remuneration structure In 2014, as a result of European legislation (CRD IV), the Prudential Regulation Authority (’PRA’) and Financial Conduct Authority (’FCA’) introduced a 2:1 cap on the ratio between variable and fixed pay for material risk takers (’MRTs’). In response to this change, in line with other global banks operating in Europe, we introduced Fixed Pay Allowances (’FPAs’) so that HSBC could balance being competitive on a total compensation basis and complying with the remuneration rules. For our executive Directors, we converted part of their variable pay opportunity (annual incentive of 300% of salary and long-term incentive of 600% of salary) into new FPAs at an effective discount of 50% to reflect the greater certainty of fixed pay. The change materially weakened the link between performance and pay and reduced the maximum total remuneration opportunity from £13,125,000 to £10,725,000 for the Group CEO and from £7,350,000 to £6,000,000 for the Group CFO. The total opportunity has remained largely unchanged over the last decade, despite subsequent changes to the Directors’ remuneration policy and changes in