Blueprint
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the
month of March
HSBC Holdings plc
42nd
Floor, 8 Canada Square, London E14 5HQ, England
(Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form
20-F X Form 40-F
(Indicate
by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934).
Yes
No X
(If
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
).
The following regulated information, disseminated
pursuant to DTR6.3.5, comprises the Notice of Annual General
Meeting for 2019 which was sent to shareholders of HSBC Holdings
plc on 6 March 2019. A copy of the Notice of Annual General Meeting
is available at www.hsbc.com/agm.
HSBC
Holdings plc
Notice of Annual General Meeting to be held at 11.00am on
Friday, 12 April 2019
International Convention Centre,
8 Centenary Square, Birmingham B1 2EA
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE
ATTENTION.
If you are in any doubt as to any aspect of the proposals referred
to in this document or as to the action you should take, you should
consult a stockbroker, solicitor, accountant or other appropriate
independent professional adviser.
If you have sold or transferred all your shares in HSBC Holdings
plc (the "Company") you should at once forward this document and
all accompanying documents to the stockbroker, bank or other agent
through whom the sale or transfer was effected for transmission to
the purchaser or transferee.
Hong
Kong Exchanges and Clearing Limited and The Stock Exchange of Hong
Kong Limited take no responsibility for the contents of this
document, make no representation as to its accuracy or completeness
and expressly disclaim any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of
the contents of this document. The ordinary shares of the Company
trade under stock code 5 on The Stock Exchange of Hong Kong
Limited.
A Chinese translation of this Notice of Annual
General Meeting is available at www.hsbc.com. Alternatively,
the Chinese translation of this and future documents may be
obtained by contacting the Company's registrar (see page
29).
Contents
|
1.
|
Chairman's
letter
|
1
|
|
2.
|
Notice
of the 2019 Annual General Meeting
|
5
|
|
3.
|
Explanatory
notes
|
11
|
|
4.
|
Information
about the 2019 Annual General
Meeting
|
25
|
|
5.
|
General
information
|
29
|
|
6.
|
Appendices
|
30
|
6
March 2019
Dear
Shareholder
I
am pleased to invite you to the HSBC Holdings plc 2019 Annual
General Meeting ("AGM") to be held at 11.00am on Friday, 12 April
2019.
This
year, our AGM will be held at the International Convention Centre,
8 Centenary Square, Birmingham. Our decision to hold the 2019 AGM
in Birmingham recognises the significant milestone reached during
2018 with the opening of the new headquarters of HSBC UK Bank plc,
our ring-fenced bank, in the city. Birmingham has played an
important role in HSBC's history and we are confident that our
relationship with the city and region will continue to go from
strength to strength in years to come.
I look forward to seeing many of you at our AGM.
If, however, you are unable to attend in person, you may choose to
watch the meeting via a webcast at www.hsbc.com/agmwebcast.
I
encourage you to read the Notice of AGM and the particulars of the
business to be considered at the meeting which are enclosed with
this letter. In addition to the standard items of business, there
are three matters that I would like to highlight:
1. Directors
We
announced on 25 February 2019 that José Antonio Meade would be
joining the Board as an independent non-executive Director from 1
March 2019. José Antonio brings a wealth of experience gained
across a number of key policy areas and his background and
knowledge of Latin America will be of great significance to HSBC
given the importance we attach to the region.
We
also announced that Jonathan Evans will retire and that he will not
therefore be seeking re-election at this year's AGM. I am grateful
to Jonathan for his important and valuable contribution, in
particular in his role leading the Financial System Vulnerabilities
Committee over the past six years.
We
bade farewell to Iain Mackay at the end of 2018. We appreciate
Iain's 11 years of highly professional and dedicated service; the
last eight years as Group Finance Director. We would like to thank
Iain for his unstinting commitment to HSBC.
I
would like to welcome Ewen Stevenson following his appointment by
the Board as Executive Director and Group Chief Financial Officer
on 1 January 2019. Ewen brings extensive international experience,
and has a proven track record as a chief financial
officer.
As
is customary, Ewen and José Antonio will stand for election
for the first time at this year's AGM and all of the other
continuing Directors will stand for re-election. Biographical
details can be found on pages 16 to 20. The current composition of
the Board can be found on pages 3 and 4.
At
the conclusion of this year's AGM, subject to the election and
re-election of the Directors, your Board will comprise a
non-executive Chairman, three executive Directors and ten
independent non-executive Directors.
2. Directors' Remuneration
Policy
In
2016, you approved our remuneration policy which has been in force
since that time but which expires at the end of its fixed three
year term at the 2019 AGM. Accordingly, at this year's AGM, as set
out in the Directors' remuneration report on pages 172 to 205 of
the Annual Report & Accounts, the Group Remuneration Committee
is recommending your approval of a new Directors' remuneration
policy.
The
2018 Directors' remuneration report, which you will also be invited
to approve, comprises a report by the Group Remuneration Committee
on its implementation of the remuneration policy during
2018.
3. Shareholder Requisitioned
Resolution - Resolution 17
We
have received a shareholder requisitioned resolution pursuant to
Section 338 of the Companies Act 2006. This resolution is
incorporated as Resolution 17 in the Notice of AGM. It has been
requested by a group of shareholders and should be read together
with their explanatory statement set out in Appendix 3 on page 34.
After careful consideration, your Board recommends that you vote
against this resolution for the reasons set out in Appendix 4 on
page 36.
Your Board considers that the proposals set out in Resolutions 1 to
16 of this Notice are in the best interests of the Company and its
shareholders and recommend that you vote in favour of those
resolutions. The Directors intend to do so in respect of their own
beneficial holdings, except in relation to Resolution 3, regarding
the remuneration policy, where the Directors will not
vote.
Your Board recommends that you vote against Resolution 17 for the
reasons set out in Appendix 4 on page 36.
A form of proxy is enclosed or can be accessed
at www.hsbc.com/proxy. Whether
or not you are able to attend the AGM, I encourage you to complete
and submit a form of proxy. Appointing a proxy will not prevent you
from attending the AGM and voting in person, should you
subsequently be able to attend.
Together
with the Board, I would like to thank you for your continued
support and I very much look forward to welcoming you in Birmingham
at the AGM.
Yours
sincerely
Mark
E. Tucker Group Chairman
HSBC Holdings plc
Incorporated in England with limited liability. Registered in
England: number 617987
Registered
Office and Group Head Office:
8
Canada Square, London E14 5HQ, United Kingdom
Directors
Mark
Tucker, 61
Non-executive Group Chairman
Kathleen
Casey, 52
Independent non-executive Director
Laura Cha,
GBM, 69
Independent non-executive Director
Henri de
Castries, 64
Independent non-executive Director
Lord
Evans of Weardale, 61
Independent non-executive Director
John
Flint, 50
Group Chief Executive
Irene
Lee, 65
Independent
non-executive Director
José Antonio
Meade, 50
Independent non-executive
Director
Heidi
Miller, 65
Independent non-executive
Director
Marc
Moses, 61
Group Chief Risk Officer
David
Nish, 58
Independent non-executive
Director
Ewen
Stevenson, 52
Group Chief Financial Officer
Jonathan
Symonds, CBE, 60
Deputy Group Chairman and Senior Independent
Director
Jackson
Tai, 68
Independent non-executive Director
Pauline van der Meer Mohr, 59
Independent non-executive Director
Secretary
Ben
Mathews, 52
Group Company Secretary
HSBC Holdings plc
Notice of the 2019 Annual General Meeting
Notice
is hereby given that the 2019 Annual General Meeting of HSBC
Holdings plc will be held at the International Convention Centre, 8
Centenary Square, Birmingham B1 2EA, United Kingdom at 11.00am on
Friday, 12 April 2019.
Resolutions
numbered 1 to 8, 11, 13 and 15 will be proposed as ordinary
resolutions and those numbered 9, 10, 12, 14, 16 and 17 will be
proposed as special resolutions. For ordinary resolutions to be
passed, more than half of the votes cast must be in favour, while
in the case of special resolutions at least three-quarters of the
votes cast must be in favour.
1. Annual Report &
Accounts*
To
receive the Annual Accounts and Report of the Directors and of the
Auditor for the year ended 31 December 2018.
2. Directors' Remuneration
Report*
To
approve the Directors' remuneration report set out on pages 172 to
205 of the Annual Report & Accounts for the year ended 31
December 2018, excluding the Directors' remuneration policy set out
on pages 175 to 184.
3. Directors' Remuneration
Policy*
To
approve the Directors' remuneration policy set out on pages 175 to
184 of the Directors' remuneration report contained within the
Annual Report & Accounts for the year ended 31 December
2018.
4. Election and re-election of
Directors*
To
elect by separate resolutions each of:
(a) Ewen
Stevenson; and
(b) José
Antonio Meade.
To
re-elect by separate resolutions each of:
(c) Kathleen
Casey;
(i) Marc Moses;
(d) Laura
Cha;
(j) David Nish;
(e) Henri
de
Castries;
(k) Jonathan Symonds;
(f) John
Flint;
(l) Jackson Tai;
(g) Irene
Lee;
(m) Mark Tucker; and
(h) Heidi
Miller;
(n) Pauline van der Meer Mohr.
5. Re-appointment of
Auditor*
To
re-appoint PricewaterhouseCoopers LLP as Auditor of the
Company.
6. Remuneration of
Auditor*
To
authorise the Group Audit Committee to determine the remuneration
of the Auditor.
7. Political Donations*
THAT
in accordance with sections 366 and 367 of the UK Companies Act
2006 (the "Act") the Company, and any company which is a subsidiary
of the Company at any time during the period for which this
resolution has effect, be authorised
to:
(a) make
political donations to political parties and/or independent
election candidates;
(b) make
political donations to political organisations other than political
parties; and
(c) incur
political expenditure,
in
each case during the period starting on the date of passing of this
Resolution 7 and expiring at the conclusion of the Annual General
Meeting of the Company to be held in 2020 or at the close of
business on 30 June 2020, whichever is earlier, provided the
aggregate amount of any such donations and expenditure shall not
exceed £200,000 during the period for which this Resolution 7
has effect. For the purposes of this resolution, the terms
'political donations', 'political parties', 'independent election
candidates', 'political organisations' and 'political expenditure'
shall have the meanings given to them by sections 363 to 365 of the
Act.
8. Authority to allot
shares*
THAT
the Directors be generally and unconditionally authorised pursuant
to and for the purposes of section 551 of the UK Companies Act 2006
(the "Act") to exercise all the powers of the Company to allot
shares in the Company and to grant rights to subscribe for, or to
convert any security into, shares in the
Company:
(a) up
to an aggregate nominal amount of US$2,003,673,053 (such amount to
be restricted to the extent that any allotments or grants are
made under paragraphs (b) or (c) of this resolution so that in
total no more than US$3,339,455,088 can be allotted or granted
under paragraphs (a) and (b) of this resolution and no more than
US$6,678,910,175 can be allotted under paragraphs (a), (b) and (c)
of this resolution); and
(b) up
to an aggregate nominal amount of US$3,339,455,088 (such amount to
be restricted to the extent that any allotments or grants are
made under paragraphs (a) or (c) of this resolution so that in
total no more than US$3,339,455,088 can be allotted or granted
under paragraphs (a) and (b) of this resolution and no more than
US$6,678,910,175 can be allotted under paragraphs (a), (b) and (c)
of this resolution) in connection with an offer or invitation
to:
(i) holders
of ordinary shares in proportion (as nearly as may be practicable)
to the respective number of ordinary shares held by them;
and
(ii) holders
of other securities, bonds, debentures or warrants which, in
accordance with the rights attaching thereto, are entitled to
participate in such an offer or invitation or as the Directors
consider necessary,
but
in each case subject to such exclusions or other arrangements as
the Directors may deem necessary or expedient in relation to record
dates, fractional entitlements, treasury shares or securities
represented by depositary receipts or having regard to any
restrictions, obligations, practical or legal problems under the
laws of, or the requirements of, any regulatory body or stock
exchange in any territory or otherwise howsoever; and
(c) comprising
equity securities (as defined in section 560 of the Act) up to an
aggregate nominal amount of US$6,678,910,175 (such amount to be
restricted to the extent that any allotments or grants are made
under paragraphs (a) or (b) of this resolution so that in total no
more than US$6,678,910,175 can be allotted under paragraphs (a),
(b) and (c) of this resolution) in connection with a rights issue
to:
(i) holders
of ordinary shares in proportion (as nearly as may be practicable)
to the respective number of ordinary shares held by them;
and
(ii) holders
of other securities, bonds, debentures or warrants which, in
accordance with the rights attaching thereto, are entitled to
participate in such an issue or as the Directors consider
necessary,
but
in each case subject to such exclusions or other arrangements as
the Directors may deem necessary or expedient in relation to record
dates, fractional entitlements, treasury shares or securities
represented by depositary receipts or having regard to any
restrictions, obligations, practical or legal problems under the
laws of, or the requirements of, any regulatory body or stock
exchange in any territory or otherwise howsoever; and
(d) up
to an aggregate nominal amount of £150,000 (in the form of
15,000,000 non-cumulative preference shares of £0.01 each),
€150,000 (in the form of 15,000,000 non-cumulative preference
shares of €0.01 each) and US$150,000 (in the form of
15,000,000 non-cumulative preference shares of US$0.01 each),
provided that such authority shall expire at the conclusion of the
Annual General Meeting of the Company to be held in 2020 or at the
close of business on 30 June 2020, whichever is the earlier, save
that this authority shall allow the Company before the expiry of
this authority to make offers, and enter into agreements, which
would, or might, require shares to be allotted or rights to
subscribe for, or to convert any security into, shares to be
granted after the authority expires and the Directors may allot
shares or grant rights to subscribe for, or to convert any security
into, shares (as the case may be) in pursuance of such offers or
agreements as if the authority conferred hereby had not
expired.
9. Disapplication of pre-emption
rights#
THAT
if Resolution 8 set out in the Notice convening this meeting is
passed, the Directors be authorised to allot equity securities (as
defined in the UK Companies Act 2006 (the "Act")) for cash under
the authority given by Resolution 8 and/or to sell shares held by
the Company as treasury shares for cash as if section 561(1) of the
Act did not apply to any such allotment or sale, such authority to
be limited:
(a) to
the allotment of equity securities or sale of treasury shares for
cash in connection with any rights issue, or other offer or
invitation (but in the case of the authority granted under
paragraph (c) of Resolution 8, by way of a rights issue only)
to:
(i) holders
of ordinary shares in proportion (as nearly as may be practicable)
to the respective number of ordinary shares held by them;
and
(ii) holders
of other securities, bonds, debentures or warrants which, in
accordance with the rights attaching thereto, are entitled to
participate in such an issue, offer or invitation or as the
Directors consider necessary,
but
in each case subject to such exclusions or other arrangements as
the Directors may deem necessary or expedient in relation to record
dates, fractional entitlements, treasury shares or securities
represented by depositary receipts or having regard to any
restrictions, obligations, practical or legal problems under the
laws of or the requirements of any regulatory body or stock
exchange in any territory or otherwise howsoever; and
(b) to
the allotment of equity securities or sale of treasury shares
(otherwise than under paragraph (a) above) up to an aggregate
nominal amount of US$500,918,263, provided that such authority
shall expire at the conclusion of the Annual General Meeting of the
Company to be held in 2020 or at the close of business on 30 June
2020, whichever is the earlier, save that this authority shall
allow the Company before expiry of this authority to make offers,
and enter into agreements, which would or might require
equity securities to be allotted (or treasury shares to be sold)
after the authority expires and the Directors may allot equity
securities (or sell treasury shares) under any such offer or
agreement as if the authority had not expired.
10. Further disapplication of pre-emption rights
for acquisitions#
THAT
if Resolution 8 set out in the Notice convening this meeting is
passed, the Directors be authorised (in addition to any authority
granted under Resolution 9 set out in the Notice convening this
meeting) to allot equity securities (as defined in the UK Companies
Act 2006 (the "Act")) for cash under the authority given by
Resolution 8 and/or to sell shares held by the Company as treasury
shares for cash as if section 561(1) of the Act did not apply to
any such allotment or sale, such authority to
be:
(a) limited
to the allotment of equity securities or sale of treasury shares up
to a nominal amount of US$500,918,263; and
(b) used
only for the purposes of financing (or refinancing, if the
authority is to be used within six months after the original
transaction) a transaction which the Directors determine to be an
acquisition or other capital investment of a kind contemplated by
the Statement of Principles on Disapplying Pre-Emption Rights most
recently published by the Pre-Emption Group prior to the date of
the Notice convening this meeting, provided that such authority
shall expire at the conclusion of the Annual General Meeting of the
Company to be held in 2020 or at the close of business on 30 June
2020, whichever is the earlier, save that this authority shall
allow the Company before expiry of this authority to make offers,
and enter into agreements, which would or might require equity
securities to be allotted (or treasury shares to be sold) after the
authority expires and the Directors may allot equity securities (or
sell treasury shares) under any such offer or agreement as if the
authority had not expired.
11. Addition of any repurchased shares to general
authority to allot shares*
THAT
the authority granted to the Directors to allot shares or grant
rights to subscribe for, or convert any security into, shares in
the Company pursuant to paragraph (a) of Resolution 8 set out in
the Notice convening this meeting be extended by the addition of
such number of ordinary shares of US$0.50 each representing the
nominal amount of the Company's share capital repurchased by the
Company under the authority granted pursuant to Resolution 12 set
out in the Notice convening this meeting, to the extent that such
extension would not result in any increase in the authority to
allot shares or grant rights to subscribe for or convert securities
into shares pursuant to paragraphs (b) and (c) of Resolution 8 set
out in the Notice convening this
meeting.
12. Purchases of Ordinary Shares by the
Company#
THAT
the Company be and is hereby generally and unconditionally
authorised for the purposes of section 701 of the UK Companies Act
2006 (the "Act") to make market purchases (within the meaning of
section 693 of the Act) of Ordinary Shares of US$0.50 each
("Ordinary Shares") and on such terms and in such manner as the
Directors shall from time to time determine provided
that:
(a) the
maximum aggregate number of Ordinary Shares hereby authorised to be
purchased is 2,003,673,053 Ordinary Shares;
(b) the
minimum price (exclusive of expenses) which may be paid for each
Ordinary Share is US$0.50 or the equivalent in the relevant
currency in which the purchase is effected calculated by reference
to the spot rate of exchange for the purchase of United States
dollars with such other currency as quoted by HSBC Bank plc in the
London Foreign Exchange Market at or about 11.00am (London time) on
the business day (being a day on which banks are ordinarily open
for the transaction of normal banking business in London) prior to
the date on which the Ordinary Share is contracted to be purchased,
in each case such rate to be the rate as conclusively certified by
an officer of HSBC Bank plc;
(c) the
maximum price (exclusive of expenses) which may be paid for each
Ordinary Share is the lower of (i) 105 per cent of the average of
the middle market quotations for the Ordinary Shares (as derived
from the Daily Official List of the London Stock Exchange plc) for
the five dealing days immediately preceding the day on which the
Ordinary Share is contracted to be purchased, or (ii) 105 per cent
of the average of the closing prices of the Ordinary Shares on The
Stock Exchange of Hong Kong Limited for the five dealing days
immediately preceding the day on which the Ordinary Share is
contracted to be purchased, in each case converted (where relevant)
into the relevant currency in which the purchase is effected
calculated by reference to the spot rate of exchange for the
purchase of such currency with the currency in which the quotation
and/or price is given as quoted by HSBC Bank plc in the London
Foreign Exchange Market at or about 11.00am (London time) on the
business day prior to the date on which the Ordinary Share is
contracted to be purchased, in each case such rate to be the rate
as conclusively certified by an officer of HSBC Bank
plc;
(d) unless
previously revoked or varied this authority shall expire at the
conclusion of the Annual General Meeting of the Company to be held
in 2020 or at the close of business on 30 June 2020, whichever is
the earlier; and
(e) the
Company may prior to the expiry of this authority make a contract
or contracts to purchase Ordinary Shares under this authority which
will or may be completed or executed wholly or partly after such
expiry and may make a purchase of Ordinary Shares pursuant to any
such contract or contracts as if the authority conferred hereby had
not expired.
13. Additional authority to allot equity
securities in relation to the issue of Contingent Convertible
Securities*
THAT
in addition to any authority granted pursuant to Resolution 8 set
out in the Notice convening this meeting, the Directors be
generally and unconditionally authorised under and for the purposes
of section 551 of the UK Companies Act 2006 (the "Act") to exercise
all the powers of the Company to allot shares in the Company and to
grant rights to subscribe for, or to convert any security into,
shares in the Company up to an aggregate nominal amount of
US$2,003,673,053 in relation to any issue by the Company or any
member of the Group of Contingent Convertible Securities ("CCSs")
that automatically convert into, or are exchanged for, ordinary
shares in the Company in prescribed circumstances where the
Directors consider such an issue of CCSs would be desirable in
connection with, or for the purposes of, complying with or
maintaining compliance with regulatory capital requirements or
targets applicable to the Group from time to time and otherwise on
terms as may be determined by the Directors, provided that such
authority shall expire at the conclusion of the Annual General
Meeting of the Company to be held in 2020 or at the close of
business on 30 June 2020, whichever is the earlier, save that this
authority shall allow the Company before the expiry of this
authority to make offers, and enter into agreements, which would or
might require shares to be allotted or rights to subscribe
for, or to convert any security into, shares to be granted
after the authority expires and the Directors may allot shares or
grant rights to subscribe for, or to convert any security into,
shares (as the case may be) in pursuance of such offers or
agreements as if the authority conferred hereby had not
expired.
14. Limited disapplication of pre-emption rights
in relation to the issue of Contingent Convertible
Securities#
THAT
if Resolution 13 set out in the Notice convening this meeting is
passed, the Directors be authorised (in addition to any authority
granted under Resolutions 9 and 10 set out in the Notice
convening this meeting) to allot equity securities (as defined in
the UK Companies Act 2006 (the "Act")) for cash under the authority
given by Resolution 13 and/or to sell shares held by the Company as
treasury shares for cash as if section 561(1) of the Act did not
apply to any such allotment or sale, provided that such authority
shall expire at the conclusion of the Annual General Meeting of the
Company to be held in 2020 or at the close of business on 30 June
2020, whichever is the earlier, save that this authority shall
allow the Company before expiry of this authority to make offers,
and enter into agreements, which would or might require equity
securities to be allotted (or treasury shares to be sold) after the
authority expires and the Directors may allot equity securities (or
sell treasury shares) under any such offer or agreement as if the
authority had not expired.
15. Renewal of scrip dividend
authority*
THAT
the Directors be and are hereby empowered to exercise the powers
conferred upon them by Article 155.1 of the Articles of Association
of the Company (as from time to time varied) so that, to the extent
and in the manner determined by the Directors, the holders of
Ordinary Shares of US$0.50 each ("Ordinary Shares") be permitted to
elect to receive Ordinary Shares instead of all or part of any
dividend (including interim dividends) declared up to the
conclusion of the Annual General Meeting of the Company to be held
in 2022.
16. Notice of general meetings#
THAT
the Company hereby approves general meetings (other than annual
general meetings) being called on a minimum of 14 clear days'
notice.
17. Shareholder requisitioned
resolution#
To
instruct the Directors by Special Resolution to abolish, or
effectively remedy, the unfair discriminatory practice of taking
"State Deduction" from the pensions paid to members of the post
1974 Midland Bank defined benefit pension
scheme.
The Board unanimously recommends that shareholders
vote against Resolution
17.
By
order of the Board
B J
S
Mathews
6 March 2019
Group
Company Secretary
HSBC Holdings plc
Incorporated in England with limited liability. Registered in
England: number 617987
Registered
Office and Group Head Office:
8
Canada Square, London E14 5HQ, United Kingdom
*
Ordinary Resolution
# Special Resolution
Explanatory notes
Information
about the business to be considered at the 2019 Annual General
Meeting ("AGM") is set out below.
These explanatory notes should be read in
conjunction with the Annual Report & Accounts in respect of the
year ended 31 December 2018. This Notice of AGM, the Annual Report
& Accounts and the Strategic Report are available
at www.hsbc.com.
For
the purpose of this Notice, the issued share capital (excluding
treasury shares) of the Company on 21 February 2019, being the
latest practicable date prior to the printing of this document, was
20,036,730,525 Ordinary Shares of US$0.50 each and carrying one
vote each with total voting rights of 20,036,730,525.
1. Annual Report &
Accounts
The
purpose of this item is for shareholders to receive and consider
the Annual Accounts and the Reports of the Directors and of the
Auditor for the year ended 31 December 2018.
2. Directors' Remuneration
Report
The
purpose of this item is to seek shareholder approval of the
Directors' remuneration report for the year ended 31 December 2018
on pages 172 to 205 of the Annual Report & Accounts (other than
the part containing the Directors' remuneration policy on pages 175
to 184 of the Annual Report & Accounts). The actual
remuneration paid to Directors in 2018 was made within the
boundaries of the Directors' remuneration policy approved by
shareholders at the 2016 Annual General Meeting. The vote on the
Directors' remuneration report is advisory in nature and cannot
impact what is paid under the shareholder-approved
Policy.
3. Directors' Remuneration
Policy
The
purpose of this resolution is to seek shareholder approval of the
new remuneration policy set out on pages 175 to 184 of the
Directors' remuneration report in the Annual Report & Accounts.
This new remuneration policy is being presented as the term of our
current remuneration policy for Directors comes to an end at the
2019 AGM.
The
new Directors' remuneration policy is based on the following key
principles:
● the
policy should be simple and transparent;
● there
should be a strong alignment between rewards and the interest of
our stakeholders, including shareholders, customers and
employees;
● the
policy should maintain a focus on long-term
performance;
● the
total compensation package should be competitive to ensure we can
retain and attract talent; and
● the
structure should meet the expectations of investors and our
regulators.
After
an extensive review, the Group Remuneration Committee is proposing
to simplify our long-term incentive scorecard for assessing
performance of the executive Directors. It will involve the use of
fewer performance measures in the long-term incentive scorecard
with a substantial proportion of the overall weighting given to
Return on Tangible Equity, which is our primary long-term financial
target.
The
Group Remuneration Committee was also mindful of the changes within
the 2018 UK Corporate Governance Code (the "Code"), which applies
for financial years commencing on or after 1 January 2019, namely
the pension provision for the executive Directors, post-employment
shareholding policy and time horizons for variable pay awards. The
Group Remuneration Committee is satisfied that the new policy is
compliant with the new Code.
Our approach in implementing the new policy
continues to follow our current approach. When considering salary
increases for executive Directors, the increases made should be in
line with increases made for our employees and within the limits
approved by shareholders. We will also continue to deliver a
portion, not exceeding 50 per cent., of the annual incentive award
to our executive Directors in cash. This is in line with the
structure used for other employees and is permissible under the
remuneration rules of the UK's Prudential Regulation Authority
("PRA"). Under the new policy, executive Directors will continue to
receive more than 80 per cent. of the combined
variable pay and
fixed pay allowance in shares that are released over a period of
eight years. This ensures strong alignment between the interests of
our executive Directors and shareholders.
On
pension provision, the current executive Directors receive 30 per
cent of salary paid in lieu of a pension entitlement (reduced from
50 per cent of salary paid under our previous policy in operation
before 2016). This is equivalent to 16 per cent of salary after UK
income tax and national insurance deductions, which aligns with the
maximum contribution rate (as a percentage of salary) that HSBC
makes for employees who are defined contribution members of the
HSBC Bank (UK) Pension Scheme. For any new executive Director, the
pension will be determined in line with the equivalent contribution
(as a percentage of salary) made for the majority of UK employees
at the time of their recruitment. The Group Remuneration Committee
reserves the right to offer a pension level that may be lower than
the current maximum level permitted under the policy.
We
are also proposing to increase the fees for non-executive Directors
to reflect the increase in time that they are required to commit to
their roles, as the Board supports HSBC through its ambitious
agenda of governance reform, growth and organisational development
in an environment of increasing regulatory, political and
organisational complexity.
After
careful review and consideration by the Group Remuneration
Committee, we believe that the new remuneration policy enables HSBC
to operate a competitive remuneration structure to retain and
attract talent whilst also complying with applicable regulatory
requirements. Feedback from our major shareholders and proxy
advisory bodies has been solicited and considered in the design of
the new policy to ensure it is closely aligned with investor
expectations.
The
vote on the new remuneration policy is by way of ordinary
resolution. It is a binding vote, meaning that, if approved,
payments to Directors may only be made if they are within the
boundaries of the policy.
The
new policy sets out how the Company proposes to pay the Directors,
including every element of remuneration to which a Director may be
entitled, as well as how the policy supports the Company's
long-term strategy and performance. It also includes details of the
Company's approach to recruitment and payment for loss of
office.
If
the Company wishes to make changes to its remuneration policy, it
has to put a new policy to shareholders for approval at a general
meeting. Once approved, the Company will only be able to make
remuneration payments to current and prospective Directors and
payments for loss of office to current or past Directors within the
boundaries of the new policy, unless the payment is approved by a
separate shareholder resolution.
If
approved by shareholders, the policy will apply for a three-year
term from the conclusion of the AGM. Therefore, unless there is a
need to make further amendments or to approve an individual
proposal, the next time we expect that shareholders will be asked
to approve the remuneration policy will be at the 2022
AGM.
Given
the interests of the Directors in the remuneration policy, the
Directors will not vote on this resolution.
4. Election and re-election of
Directors Appointment
Appointments
to the Board are made on merit and candidates are considered
against objective criteria, having due regard to the benefits of
the diversity of the Board. The Nomination & Corporate
Governance Committee leads the Board appointment process, agrees
the criteria for any appointments and engages independent external
search consultants, as required. At the conclusion of this process,
the Committee will nominate potential candidates for appointment to
the Board. In the exercise of its responsibilities, the Committee
regularly reviews the Board's structure, size and composition,
including its skills, knowledge, independence and diversity to
ensure it remains aligned with the Group's strategic
priorities.
Diversity
The
biography of each Director located on pages 16 to 20 indicates how
each individual contributes to the diversity of the
Board.
Independence
The
Board has concluded that all of the non-executive Directors
standing for re-election at the AGM are independent in character
and judgement. The non-executive Group Chairman was considered
independent on appointment.
When
considering independence, the Board calculates the length of
service of a non-executive Director by reference to the date of his
or her election by shareholders following their appointment. The
Board has determined that there are no relationships or
circumstances which are likely to affect the judgement of any of
the non- executive Directors. Any relationships or circumstances
which could appear to do so are not considered to be material. Each
of the Directors standing for election or re-election has confirmed
that they have no material relationship with another Director, a
member of senior management or any substantial or controlling
shareholder of HSBC Holdings plc.
Election of new Directors
Ewen
Stevenson and José Antonio Meade will offer themselves for
election as Directors having been appointed to the Board on 1
January 2019 and 1 March 2019, respectively. Ewen Stevenson assumed
the role of Executive Director and Group Chief Financial Officer
and José Antonio Meade was appointed as an independent non-
executive Director.
Time Commitment
The
Board, both prior to a Director's appointment and when nominating a
Director for re-election enquires, and obtains assurance, that each
Director is, or will be, capable of contributing the time expected
of them and time that may be unanticipated should additional
demands be placed on them in relation to HSBC or in relation to
their other commitments.
The
Board has carefully considered the other commitments held by the
Directors and has applied the same standard of enquiry for each of
them. Our focus is to determine the ability of each Director to
commit sufficient time to fulfil their individual obligations,
rather than a strict adherence to a numeric count of directorships.
Where Directors hold other roles (either outside of or elsewhere
within the Group), or prior to accepting any additional roles,
particular attention is paid to ensuring that they are able to
commit sufficient time to HSBC.
Arising
from its deliberations, the Board notes the following in relation
to those Directors seeking re-election:
Mark Tucker
As
non-executive Chairman, Mark Tucker's commitment to HSBC is
approximately four days per week. With effect from 1 March 2019, Mr
Tucker also became the non-executive Chairman of Discovery Limited,
a South African- based financial services group that is listed on
the Johannesburg Stock Exchange. The Board has concluded that this
additional role, which involves an expected time commitment of 20
to 25 days per year, will not affect Mr Tucker's ability to
continue to provide HSBC with the level of focus and time
required.
Jonathan Symonds
In
2018, the Board appointed Jonathan Symonds to the role of Deputy
Group Chairman, following his retirement as non-executive Chairman
of HSBC Bank plc. In this role, Jonathan formally deputises for the
Group Chairman, takes a leadership role in relation to external
high level regulatory and political relationships, and leads the
Board in relation to specific projects. He performs this new role
in addition to his existing roles as Senior Independent Director,
Chairman of the Group Audit Committee and member of the Group Risk
Committee. Notwithstanding his appointment as Deputy Group
Chairman, the Board has concluded that Mr Symonds' independence is
not compromised and that he is able to dedicate sufficient time to
this role, taking into account his external
commitments.
Laura Cha
Laura
Cha is a Director with considerable geographic expertise and
experience and a deep-rooted knowledge and understanding of Asian
business and culture. The breadth and diversity of her experience
makes her an invaluable member of, and active contributor to, the
Board.
In
order to ensure that she is best placed to continue to make a
valuable and active contribution to her role with HSBC, Ms Cha has
reviewed her external commitments. She stepped down from her roles
as a non-executive Director of China Telecom Corporation Limited
and as Chair of Hong Kong's Financial Services Development Council
in 2018.
Ms
Cha stepped down as Chair of the Philanthropic & Community
Investment Committee and as a member of the Conduct & Values
Committee following the demise of those committees in 2018.
Subsequently, she joined the Financial System Vulnerabilities
Committee and Nomination & Corporate Governance Committee.
These changes have had no incremental impact on Ms Cha's total time
commitment to HSBC.
During
2018, Ms Cha was appointed as the non-executive Chair of the Hong
Kong Exchanges and Clearing Limited. HSBC continues to be a
significant external, non-executive commitment for Ms Cha. The
Board is satisfied that she is able to commit sufficient time to
her role and the importance that she attaches to it,
notwithstanding her external appointments.
Irene Lee
Irene
Lee is a highly valued and experienced Director with specific
geographic and commercial experience which is of particular
relevance to the delivery of the Group's strategy. The Board
attaches great importance to the contribution that Ms Lee makes to
HSBC.
Ms
Lee is the executive Chair of Hysan Development Company Limited,
but has delegated day to day operational responsibility to her
executive team. Her non-executive role with HSBC Holdings plc,
including its subsidiaries, The Hongkong and Shanghai Banking
Corporation Limited and Hang Seng Bank Limited, comprise her most
significant non-executive commitments, as demonstrated by her
decision to adjust her portfolio and step down from her roles with
Noble Group Limited in 2017 and with CLP Holdings Limited in 2018.
Ms Lee became a member of the Nomination & Corporate Governance
Committee and the Group Remuneration Committee during 2018. The
Board remains comfortable that Ms Lee has sufficient capacity and
remains extremely supportive of Ms Lee and her continued commitment
to HSBC.
Jackson Tai
Jackson
Tai is a skilled international Director with experience in senior
operating and governance roles across Asia and in China, as well as
North America and Europe. The unique combination of his experience
and deep knowledge makes him a significant asset to the
Board.
The
Board attaches great importance to the contribution that Mr Tai
makes to HSBC at a Board level and as a member of the Group Audit
Committee, but most notably as Chairman of the Group Risk Committee
("GRC") given the increased demands and expectations of the role,
both from regulators and as a result of the GRC's expanding remit.
Jack Tai will be appointed as Chair of the Financial System
Vulnerabilities Committee following the retirement of Jonathan
Evans at the AGM and will continue the programmed transition of its
responsibilities to the GRC.
During
2018, Mr Tai reviewed his portfolio of non-executive roles and will
be reducing those commitments by 31 March 2019.
The
Board has concluded that Mr Tai continues to act in an independent
capacity, constructively challenging and overseeing management. The
Board is grateful for the consideration Mr Tai has shown in
ensuring that he is able to commit sufficient time to his
role.
The biographies on pages 16 to 20 set out the skills and experience
each Director brings to the Board for the long term sustainable
success of the Company. Based upon the review undertaken, the Board
has satisfied itself that each of the Directors is fully able to
discharge his or her duties to the Company and that they each have
sufficient capacity to meet their commitments to HSBC. The Board
has therefore concluded that all of the Directors except, as
previously announced, Jonathan Evans who is retiring, should offer
themselves for election or re-election in accordance with the
Group's regular practice.
Non-executive Directors' fees
With
the exception of the non-executive Group Chairman, each
non-executive Director will receive a fee of £127,000 per
annum subject to shareholder approval of the new Directors'
remuneration policy under Resolution 3 at the 2019 AGM. The Deputy
Group Chairman and Senior Independent Director will receive a fee
of £375,000 per annum in addition to his non-executive
Director fee and the fees payable for his chairmanship or
membership of Board committees. The non-executive Group Chairman
receives a fee of £1.5 million per annum.
Subject
to the approval of Resolution 3, the fees paid to non-executive
Directors who are standing for election or re-election as members
of Board committees will be as follows (these and Board fees are
pro-rated for part year service where relevant):
|
Committee*
|
Fees (per annum)
|
Committee members standing for election/re-election
|
|
Chairman
|
Member
|
|
Group
Audit Committee
|
£75,000
|
£40,000
|
Jonathan
Symonds (Chairman), Kathleen Casey, David Nish, Jackson
Tai
|
|
Group
Risk Committee
|
£150,000
|
£40,000
|
Jackson
Tai (Chairman), Heidi Miller, Jonathan Symonds, Pauline van der
Meer Mohr
|
|
Group
Remuneration Committee
|
£75,000
|
£40,000
|
Pauline
van der Meer Mohr (Chairman), Henri de Castries, Irene Lee, David
Nish
|
|
Financial
System Vulnerabilities Committee
|
£75,000
|
£40,000
|
Jackson
Tai (Chairman designate**), Laura Cha
|
|
Nomination
& Corporate Governance Committee
|
N/A***
|
£33,000
|
Mark
Tucker (Chairman), Kathleen Casey, Laura Cha, Henri de Castries,
Irene Lee, José Antonio Meade, Heidi Miller, David Nish,
Jonathan Symonds, Jackson Tai, Pauline van
der
Meer Mohr
|
*
For further details of the roles and accountabilities of each of
these Board committees, see pages 158 to 164 of the Annual Report
& Accounts.
**
Jackson Tai will assume the role of Chair of the
Financial System Vulnerabilities Committee when Jonathan Evans
retires from the Board at the conclusion of the 2019
AGM.
***
The Group Chairman serves as the Chairman of the Nomination
& Corporate Governance Committee and receives no additional fee
in respect of this position.
Laura
Cha, as a non-executive Director, Deputy Chairman and a member of
the Nomination Committee of The Hongkong and Shanghai Banking
Corporation Limited, receives fees in those capacities of
HK$550,000, HK$125,000 and HK$160,000 respectively per annum. These
fees were authorised by the shareholder of The Hongkong and
Shanghai Banking Corporation Limited.
Irene
Lee, as a non-executive Director, the Chairman of the Remuneration
Committee, a member of the Audit Committee and a member of the Risk
Committee of The Hongkong and Shanghai Banking Corporation Limited,
receives fees of HK$550,000, HK$330,000, HK$200,000 and HK$200,000
respectively per annum. In addition, as a non-executive Director,
Chairman of the Risk Committee and member of the Audit Committee of
Hang Seng Bank Limited, she receives fees of HK$500,000, HK$260,000
and HK$160,000 respectively per annum. The fee received by Ms Lee
for her roles with The Hongkong and Shanghai Banking Corporation
Limited were authorised by the shareholder of The Hongkong and
Shanghai Banking Corporation Limited. The fee received by Ms Lee as
a non-executive Director of Hang Seng Bank Limited was authorised
by shareholders of Hang Seng Bank Limited, whereas the Hang Seng
Bank Limited Committee fees were authorised by the Board of Hang
Seng Bank Limited.
Heidi
Miller receives a separate fee of US$550,000 per annum as
non-executive Chairman of HSBC North America Holdings Inc. This fee
was approved by the Group Remuneration Committee of HSBC Holdings
plc on 5 November 2015 and authorised by the Board of HSBC North
America Holdings Inc.
The
non-executive Directors are also entitled to travel allowances,
reflecting the additional time commitment required.
Non-executive Directors' terms of appointment
Non-executive
Directors do not have service agreements, but are bound by letters
of appointment issued for and on behalf of HSBC Holdings plc.
Subject to their election or re-election by shareholders, the terms
of appointment of the non-executive Directors standing for
re-election will expire as follows: Kathleen Casey, Laura Cha,
David Nish, Jonathan Symonds and Jackson Tai - 2020; Heidi Miller
and Mark Tucker - 2021; and, Henri de Castries, Irene Lee,
José Antonio Meade and Pauline van der Meer Mohr -
2022.
Executive Directors' service agreements and
remuneration
The
executive Directors have rolling service agreements with a notice
period of 12 months for either party. The dates of the service
agreements are:
John
Flint
21 February 2018
Marc
Moses
27 November 2014
Ewen
Stevenson
1 December 2018
Under
the terms of their employment: John Flint, Ewen Stevenson and Marc
Moses each receive fixed pay consisting of base salary, cash in
lieu of pension and fixed pay allowance and are eligible to receive
discretionary variable pay awards. Subject to approval of the new
Directors' remuneration policy under Resolution 3, the base
salaries paid to John Flint, Ewen Stevenson and Marc Moses are
£1,240,000, £723,000 and £723,000 per annum
respectively. The cash in lieu of pension paid to John Flint, Ewen
Stevenson and Marc Moses are £372,000, £216,900 and
£216,900 per annum respectively, representing 30 per cent. of
base salary. Fixed pay allowances are delivered in shares in four
equal instalments and shares equivalent to the net number of shares
delivered (after those sold to cover any income tax and social
security) will be subject to a retention period. Shares will be
released annually on a pro rata basis over five years starting from
the March immediately following the end of the financial year in
respect of which the shares are granted. The fixed pay allowances
paid to John Flint, Ewen Stevenson and Marc Moses are
£1,700,000, £950,000 and £950,000 per annum
respectively.
Further
details of the Directors' emoluments are set out in the Directors'
remuneration report contained in the Annual Report & Accounts
on pages 172 to 205.
The Board of Directors of HSBC Holdings plc as at
the date of this document comprises: Mark Tucker*, John Flint,
Kathleen Casey†, Laura Cha†, Henri de Castries†, Lord Evans of Weardale†, Irene Lee†, José Antonio Meade†, Heidi Miller†, Marc Moses, David Nish†, Ewen Stevenson, Jonathan
Symonds†, Jackson Tai† and Pauline van der Meer Mohr†.
*
Non-executive Group Chairman
† Independent non-executive
Director
Biographical details
Brief
biographical details of each of the Directors standing for election
and re-election are set out below.
Ewen James Stevenson, 52
Group
Chief Financial Officer
Appointed to the Board: January 2019
Skills and
Experience: Ewen has more
than 25 years' experience in the banking industry, both as an
adviser to major banks and as an executive. Ewen was
most recently executive Director and Chief Financial Officer at
Royal Bank of Scotland Group. Prior to this, he was at Credit
Suisse where his last role was co-Head of the EMEA Investment
Banking Division and co-Head of the Global Financial Institutions
Group.
Current appointments
include: Member of the
Group Management Board and a Director of HSBC UK Holdings
Limited.
José Antonio Meade
Kuribreña†, 50
Appointed to the Board: March 2019
Member of the Nomination & Corporate Governance
Committee
Skills and
Experience: José
Antonio is an economist and lawyer who brings extensive experience
in public administration, banking and financial policy to the
Board. He held various Cabinet-level positions in the federal
government of Mexico, including Secretary of Energy, Secretary of
Social Development, Secretary of Foreign Affairs and twice as
Secretary of Finance and Public Credit. He also served as
Undersecretary and as Chief of Staff in the Ministry of Finance and
Public Credit. Other former appointments include as Director
General of Banking and Savings at the Ministry of Finance and
Public Credit, and as Chief Executive Officer of the National Bank
for Rural Credit.
Current appointments
include: Commissioner of
the Global Commission on Adaptation.
Kathleen Louise Casey†, 52
Appointed to the Board: March 2014
Member of the Group Audit Committee and the Nomination &
Corporate Governance Committee
Skills and
Experience: Kathleen has
extensive financial regulatory policy experience. She is a former
Commissioner of the US Securities and Exchange Commission, and
acted as its principal representative in multilateral and bilateral
regulatory dialogues with the G-20 Financial Stability Board and
the International Organisation of Securities Commissions. Other
former appointments include Staff Director and Counsel to the
United States Senate Committee on Banking, Housing, and Urban
Affairs; Chair of the Alternative Investment Management
Association; and Legislative Director and Chief of Staff for a US
Senator. Kathleen is a member of the District of Columbia Bar and
the Virginia State Bar.
Current appointments
include: Senior adviser to
Patomak Global Partners, member of the Board of Trustees of the
Financial Accounting Foundation and a number of public and
non-public bodies.
Laura May Lung Cha (neé
Shih)†, GBM, 69
Appointed to the Board: March 2011
Member of the Financial Systems Vulnerabilities Committee and the
Nomination & Corporate Governance Committee
Skills and
Experience: Laura has
extensive regulatory and policy making experience in the finance
and securities sector in Hong Kong and mainland China. She is the
former Vice Chairman of the International Advisory Council of the
China Securities Regulatory Commission. Other former appointments
include non-executive Director of China Telecom Corporation
Limited; Bank of Communications Co., Ltd.; and Tata Consultancy
Services Limited. She also served as Chair of Hong Kong Special
Administrative Region's Financial Services Development Council and
Deputy Chair of the Securities and Futures Commission in Hong Kong.
Laura is a member of the State Bar of
California.
Current appointments
include: Chair of the Hong
Kong Exchanges and Clearing Limited and non-executive Deputy Chair
of The Hongkong and Shanghai Banking Corporation Limited. She is
also a non-executive Director of The London Metal Exchange,
Unilever PLC and Unilever N.V.
Henri René Marie Augustin de la Croix de
Castries†, 64
Appointed to the Board: March 2016
Member of the Group Remuneration Committee and the Nomination &
Corporate Governance Committee
Skills and
Experience: Henri has more
than 25 years' international experience in the financial services
industry. He joined AXA S.A. in 1989, and then held a number of
senior roles, ultimately as Chairman and Chief Executive Officer of
AXA S.A. Henri was also a Director of AXA UK plc until his
departure from the AXA group in September 2016.
Current appointments
include: Special Adviser
to General Atlantic, Chairman of Institut Montaigne, lead
independent Director of Nestlé S.A. and a non-executive
Director of the French National Foundation for Political Science.
He is also a member of the Global Advisory Council of LeapFrog
Investments.
John Michael Flint, 50
Group
Chief Executive
Appointed to the Board: February 2018
Group
Chief Executive since February 2018
Skills and
Experience: John joined
HSBC in 1989 and helped to establish and expand the HSBC Global
Markets business in Asia. He has held various roles across the
Group, including Group Treasurer; Deputy Head of Global Markets and
Head of Global Markets, Europe, Middle East and Africa; Chief
Executive of HSBC Global Asset Management; Chief of Staff to the
Group Chief Executive and Group Head of Strategy and Planning. In
2013, John was appointed Group Managing Director and Chief
Executive of Retail Banking and Wealth
Management.
Current appointments
include: Chairman of the
Group Management Board and The Hongkong and Shanghai Banking
Corporation Limited. John is a member of the Monetary Authority of
Singapore International Advisory Panel and the International
Business Council of the World Economic Forum. He is also a Global
Commissioner of the New Climate Economy and a member of the Climate
Finance Leadership Initiative.
Irene Yun-Lien Lee†, 65
Appointed to the Board: July 2015
Member of the Group
Remuneration Committee and the Nomination & Corporate
Governance Committee
Skills and
Experience: Irene has more
than 40 years' finance industry experience, having held senior
investment banking and fund management positions in the UK, the US
and Australia, including positions at Citibank and the Commonwealth
Bank of Australia. Other former appointments include serving as a
member of the advisory council of J.P. Morgan Australia and the
Australian Government Takeovers Panel. Irene also served as a non-
executive Director of CLP Holdings Limited and Noble Group
Limited.
Current appointments
include: Executive Chair
of Hysan Development Company Limited and a non-executive Director
of The Hongkong and Shanghai Banking Corporation Limited, Hang Seng
Bank Limited and Cathay Pacific Airways Limited. She is also a
member of the Exchange Fund Advisory Committee of the Hong Kong
Monetary Authority.
Heidi Miller (neé
Goldberg)†, 65
Appointed to the Board: September 2014
Member of the Group Risk Committee and the Nomination &
Corporate Governance Committee
Skills and
Experience: Heidi is a
former President of International at JP Morgan & Chase Co., and
was responsible for leading the global expansion and the
international business strategy across its investment bank, asset
management, and treasury and securities services divisions. She was
also a non-executive Director of Merck & Co., Inc. and
Progressive Corp.; Executive Vice President and Chief Financial
Officer of Bank One Corporation; and Executive Vice President and
Chief Financial Officer of Citigroup Inc.
Current appointments
include: Chair of HSBC
North America Holdings Inc. and a non-executive Director of First
Data Corporation and General Mills Inc.
Menasey Marc Moses, 61
Group
Chief Risk Officer
Appointed to the Board: January 2014
Skills and
Experience: Marc joined
HSBC in 2005 as Chief Financial and Risk Officer for Global Banking
and Markets, and in December 2010 became Group Chief Risk Officer.
He has extensive risk management and financial experience. Marc is
a fellow of the Institute of Chartered Accountants in England &
Wales. He was European Chief Financial Officer at J.P. Morgan and
an audit partner at Price Waterhouse.
Current appointments
include: Member of the
Group Management Board, and a Director of HSBC Global Services
Limited, HSBC Private Banking Holdings (Suisse) SA and HSBC Private
Bank (Suisse) SA.
David Thomas Nish†, 58
Appointed to the Board: May 2016
Member of the Group Audit Committee, the Group Remuneration
Committee and the Nomination & Corporate Governance
Committee
Skills and
Experience: David served
as Chief Executive Officer of Standard Life plc between 2010 and
2015, having joined as Finance Director in 2006. Other former
appointments include Group Finance Director of Scottish Power plc;
non-executive Director of the UK Green Investment Bank plc, HDFC
Life (India) and London Stock Exchange Group plc; and partner of
Price Waterhouse. He is a fellow of the Institute of Chartered
Accountants of
Scotland.
Current appointments
include: A non-executive
Director of Vodafone Group plc and Zurich Insurance
Group.
Jonathan Richard Symonds†, CBE, 60
Appointed to the Board: April 2014
Senior
Independent Director since April 2017 Deputy Group Chairman since
August 2018
Chairman of the Group Audit Committee and a member of the Group
Risk Committee and the Nomination & Corporate Governance
Committee
Skills and
Experience: Jonathan is a
former Chief Financial Officer of Novartis AG and AstraZeneca plc.
He was also a partner and managing Director of Goldman Sachs, a
partner of KPMG, and a non-executive Director and Chairman of the
Audit Committee of Diageo plc. Until August 2018, Jonathan served
as Chairman of HSBC Bank plc. He is a fellow of the Institute of
Chartered Accountants in England & Wales.
Current appointments
include: Chairman of
Proteus Digital Health Inc. and Genomics England Limited and a
non-executive Director of Rubius Therapeutics,
Inc.
Jackson Peter Tai†, 68
Appointed to the Board: September 2016
Chairman of the Group Risk Committee and member of the Financial
System Vulnerabilities Committee, the Group Audit Committee, and
the Nomination & Corporate Governance Committee
Skills and
Experience: Jackson is a
skilled international non-executive Director with experience in
senior operating and governance roles across Asia and China, as
well as North America and Europe. Jackson was formerly Vice
Chairman and Chief Executive Officer of DBS Group and DBS Bank Ltd,
having served the group as Chief Financial
Officer and then as President and Chief Operating Officer. He
previously worked at J.P. Morgan & Co. Incorporated as an
investment banker in New York, Tokyo and San Francisco. Other
former appointments include non-executive Director of Bank of China
Limited, Singapore Airlines, NYSE Euronext, ING Groep N.V.,
CapitaLand Ltd, SingTel Ltd. and Jones Lang LaSalle Inc. Jackson
also served as Vice Chairman of Islamic Bank of
Asia.
Current appointments
include: Non-executive
Director of Eli Lilly and Company, Koninklijke Philips N.V.,
Mastercard Incorporated and the Canada Pension Plan Investment
Board.
Mark Edward Tucker*, 61
Non-executive
Group Chairman
Appointed to the Board: September 2017
Group
Chairman since October 2017
Chairman of the Nomination & Corporate Governance
Committee
Skills and
Experience: Mark has
extensive experience in the financial services industry in Asia and
the UK. Most recently he was Group Chief Executive and
President of AIA Group Limited ("AIA"). Before joining AIA,
Mark was Group Chief Executive of Prudential plc and the founding
Chief Executive of Prudential Corporation Asia Limited. Mark also
previously served as a non-executive Director of the Court of The
Bank of England, as an independent non-executive Director of the
Goldman Sachs Group and as Group Finance Director of HBOS plc. Mark
is an associate of the Institute of Chartered Accountants in
England & Wales.
Current appointments
include: Joined the Board
of Discovery Limited, as non-executive Chairman,
on 1 March 2019. Serves on the Asia Business
Council and the advisory board of the Asia Global Institute. Mark
is also a Director of the Peterson Institute for International
Economics.
Pauline Françoise Marie de Beaufort - van der
Meer Mohr†, 59
Appointed to the Board: September 2015
Chairman
of the Group Remuneration Committee and a member of the Group Risk
Committee and the Nomination & Corporate Governance
Committee
Skills and
Experience: Pauline has
extensive legal and human resources experience across a number of
different sectors, and contributed to the Dutch Banking Code
Monitoring Commission. Former appointments include President of
Erasmus University Rotterdam; senior executive Vice President and
Head of Group Human Resources at ABN AMRO Bank N.V.; Group Human
Resources Director at TNT NV.; HR Director, Information Technology,
Royal Dutch Shell Group; Senior Legal Counsel, Shell International;
and member of the supervisory board of ASML Holding
N.V.
Current appointments
include: Chair of the
Dutch Corporate Governance Code Monitoring Committee, Chair of the
supervisory board of EY Netherlands, Deputy Chair of the
supervisory board of Royal DSM N.V., non- executive Director of
Mylan N.V., member of the Selection and Nomination Committee of the
Supreme Court of the Netherlands and member of the Capital Markets
Committee of the Dutch Authority for the Financial
Markets.
*
Non-executive Group Chairman
† Independent non-executive
Director
Save
as disclosed above and in Appendix 5 there are no further matters
or particulars required to be disclosed pursuant to Rule 13.51(2)
of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited ("Hong Kong Listing
Rules").
5 and 6. Re-appointment of Auditor and remuneration of
Auditor
The
current appointment of PricewaterhouseCoopers LLP ("PwC") as
Auditor of the Company terminates at the conclusion of this year's
AGM. PwC has expressed its willingness to continue in office. The
Group Audit Committee and the Board have recommended that PwC be
re-appointed until the conclusion of the 2020 Annual General
Meeting and that the Group Audit Committee be authorised to
determine its remuneration.
An
analysis of the remuneration paid in respect of audit and non-audit
services provided by our Auditor and their affiliates for each of
the past three years is disclosed on page 246 in the Annual Report
& Accounts.
7. Political Donations
The
UK Companies Act 2006 (the "Act") requires companies to obtain
shareholder authority for donations to registered political parties
and other political organisations, totalling more than £5,000
in any 12 month period and for any political expenditure, subject
to limited exceptions.
In
accordance with Group policy, HSBC does not make any political
donations or incur political expenditure within the ordinary
meaning of those words. We have no intention of altering this
policy. However, the definitions of political donations, political
parties, political organisations and political expenditure used in
the Act are very wide. As a result, they may cover routine
activities that form part of the normal business activities of the
Group and are an accepted part of engaging with stakeholders to
ensure that issues and concerns which affect the Group's operations
are considered and addressed, but which would not be considered as
political donations or political expenditure in the ordinary sense
of those words. Activities including contributions to or support
for bodies such as those concerned with policy review and law
reform or with the representation of the business community or
sections of it may be deemed to be political donations or
expenditure as defined by the Act. The activities referred to above
are not designed to influence public support for any political
party or political outcome. The authority is being sought on a
precautionary basis only to ensure that neither the Company nor any
of its subsidiaries inadvertently breaches the Act. Resolution 7
proposes an aggregate overall cap of £200,000 per annum for
all such political donations and expenditure.
If
Resolution 7 is passed, this authority will be effective until the
conclusion of the 2020 AGM or the close of business on 30 June
2020, whichever is the earlier.
8. Authority to allot
shares
This year, the Directors are again seeking
authority under section 551 of the Act to allot shares up to an
aggregate total nominal amount of two-thirds of the Company's
issued ordinary share capital subject to the restrictions set out
below. The authority given to the Directors at the 2018 AGM will
expire at the conclusion of this year's AGM. Resolution 8 will give
the Directors authority to allot new ordinary shares (or rights to
ordinary shares) of up to an aggregate nominal amount of US$6,678,910,175,
representing two-thirds of the Company's issued ordinary share
capital. However, that authority is limited as
follows:
(a) under
paragraph (a) of Resolution 8, up to an aggregate nominal amount of
US$2,003,673,053, representing approximately 20 per cent of the
Company's issued ordinary share capital, may be used for general
allotments;
(b) under
paragraph (b) of Resolution 8, the Directors would have authority
to make allotments which exceed the 20 per cent authority in
paragraph (a) of Resolution 8 in connection with a pre-emptive
offering such as a rights issue or a scrip dividend up
to an aggregate nominal amount, when combined with allotments made
under paragraph (a), of US$3,339,455,088. This represents
approximately one-third of the issued ordinary share capital of the
Company; and
(c) under
paragraph (c) of Resolution 8, the Directors would have authority
to make allotments (which exceed those under paragraphs (a) and
(b)) up to an aggregate nominal amount of US$6,678,910,175 in
connection with a rights issue only. This represents approximately
two-thirds of the Company's issued ordinary share capital. Any
allotments or grants under paragraphs (a) or (b) of Resolution 8
will reduce the level of this two- thirds authority.
In
Resolution 8 paragraph (d), the Board is again seeking authority to
issue sterling, US dollar and euro preference shares without having
first to obtain the consent of shareholders at a general meeting.
These preference shares were created to underpin issues of
preferred securities, which are a tax efficient form of regulatory
capital. If approved by shareholders, this
authority will give Directors the flexibility to raise regulatory
capital should circumstances so require. If any preference shares
were to be issued they would, subject to regulatory approval, be
redeemable at the Company's option and carry no voting rights other
than in exceptional circumstances, but would rank in priority to
the Company's ordinary shares with respect to participation in any
return of capital. The Board has no present intention of exercising
this authority.
If
granted, the authorities sought under Resolution 8 (a) to (d) will
be effective until the conclusion of the 2020 AGM or the close of
business on 30 June 2020, whichever is the earlier.
As
at 21 February 2019, being the latest practicable date prior to
printing of this document, the Company held 325,273,407 of its
ordinary shares in treasury, representing 1.60 per cent of the
issued ordinary share capital (including treasury shares) and 1.62
per cent of the issued ordinary share capital (excluding treasury
shares).
9 and 10. Disapplication of pre-emption rights
Resolutions
9 and 10 are to approve the disapplication of statutory pre-emption
rights under the Act in respect of certain allotments of shares
made under the authorities in Resolution 8, in line with the
guidelines on share capital management issued by the UK's
Investment Association (the "IA Guidelines") and the Pre-Emption
Group's Statement of Principles on Disapplying Pre-Emption Rights.
If the Directors wish to exercise the authority under Resolution 8
and offer shares (or sell any shares which the Company may purchase
or elect to hold as treasury shares) for cash, the Act requires
that unless shareholders have given specific authority for the
disapplication of their statutory pre-emption rights, the new
shares must be offered first to existing shareholders in proportion
to their existing shareholdings. Resolutions 9 and 10 seek to give
the Directors flexibility, in certain circumstances, to allot new
shares (or to grant rights over shares) for cash or to sell
treasury shares for cash without first offering them to existing
shareholders in proportion to their holdings.
Resolution
9 seeks to give the Directors flexibility in the context of
pre-emptive offerings such as a rights issue, an open offer, or a
scrip dividend, to deal with legal or practical difficulties in
countries outside the UK which prevent the offer being made on a
purely pro rata basis. It also seeks a disapplication of
pre-emption rights in respect of allotments or sales of treasury
shares for cash up to an aggregate nominal amount of
US$500,918,263, representing approximately five per cent of the
Company's issued ordinary share capital. This is designed to
reflect the guidelines contained in the Pre-Emption Group's
Statement of Principles on Disapplying Pre-Emption Rights, which
impose a five per cent limit for non-pre-emptive allotments for
cash, excluding certain allotments such as those under employee
share plans.
Resolution 10 is proposed as a separate
resolution, in accordance with a recommendation of the Pre-Emption
Group and the IA Guidelines, to authorise the Directors to allot an
additional quantity of shares (or sell treasury shares) for cash
otherwise than to existing shareholders pro rata to their holdings
up to an aggregate nominal amount of US$500,918,263, representing a
further five per cent of the Company's issued share capital. The
additional authority in Resolution 10 may be used only in
connection with the financing (or refinancing) of
an acquisition or specified capital investment. In
accordance with the Pre-Emption Group's Statement of Principles,
the Directors confirm that they intend to use the authority sought
in Resolution 10 only in connection with such an acquisition or
specified capital investment which is announced contemporaneously
with the issue, or which has taken place in the preceding six month
period and is disclosed in the announcement of the issue, and will
provide shareholders with information regarding the transaction if
the authority is used. Other than pursuant to the Company's scrip
dividend plan and allotments under employee share plans, the Board
has no present intention of issuing any further ordinary shares
pursuant to the new general authorities in Resolutions 9 and 10. No
issue will be made which would effectively change the control of
the Company or the nature of its business without the prior
approval of shareholders at a general meeting.
If
granted, the authorities sought in Resolutions 9 and 10 will be
effective until the conclusion of the 2020 Annual General Meeting
or the close of business on 30 June 2020, whichever is the
earlier.
In
addition, the Company is seeking authority under Resolution 13 to
allot shares or rights to subscribe for shares in connection with
the issue of Contingent Convertible Securities ("CCSs"), and to
disapply statutory pre-emption rights in respect of such allotment,
in each case up to an amount equivalent to approximately 20 per
cent of the Company's issued ordinary share capital. Assuming
Resolutions 13 and 14 are passed, the authority sought under
Resolutions 8, 9 and 10 would not be utilised for the purpose of
the issuance of CCSs.
The
Company also confirms that it does not intend to issue more than
7.5 per cent of its issued ordinary share capital (excluding
treasury shares) in any rolling three-year period, without prior
consultation with shareholders, save as permitted in connection
with an acquisition or specified capital investment as described
above. However, if passed, Resolutions 13 and 14 would permit this
level to be exceeded in connection with the issue of CCSs or the
conversion or exchange of CCSs.
Unless
otherwise stated, references in these Explanatory Notes to the
issued ordinary share capital, and to percentages or fractions of
the issued ordinary share capital, are to the issued ordinary share
capital of the Company (calculated exclusive of treasury shares) as
at 21 February 2019, being the latest practicable date prior to
printing this document.
11. Addition of any repurchased
shares to general authority to allot shares
Resolution
11 seeks to extend the Directors' authority to allot shares and
grant rights to subscribe for or convert any security into shares
pursuant to paragraph (a) of Resolution 8 to include the shares
repurchased by the Company under the authority sought by Resolution
12. This is permitted by the Hong Kong Listing Rules.
12. Purchase of ordinary shares by the
Company
The
purpose of the authority to be conferred by this item is to enable
the Company to make market purchases of its own
shares.
The
Directors consider that it is appropriate to seek authority from
shareholders for the Company to make market purchases of up to 10
per cent of its own ordinary shares. The maximum and minimum prices
at which they may be bought, exclusive of expenses, are specified
in the resolution. It remains the Directors' policy to maintain a
robust capital base, a policy which has consistently been one of
the Group's strengths. As the Group executes its strategy, the
appropriate level of capital to be held will be continually
reviewed. This authority will give Directors the flexibility, if
they consider it in the interests of the Company and shareholders,
to purchase ordinary shares in the market in appropriate
circumstances, for example, in the event that the Company is unable
to deploy the retained capital to create incremental value for
shareholders or to neutralise the dilutive impact of scrip
dividends, subject to regulatory approval. The Board may decide to
retain any shares it purchases as treasury shares with a view to
possible re-issue at a later date, transfer in connection with an
employee scheme, or it may cancel the shares.
Shareholders
should note that under section 693 of the Act, the Company is only
permitted to make market purchases of its ordinary shares on a
recognised investment exchange. Of the venues where the Company's
ordinary shares are listed, only the London Stock Exchange is
currently designated as a recognised investment
exchange.
The Act permits the Company to elect to hold in
treasury any ordinary shares it may repurchase, rather than
automatically cancelling those shares. Approval has been received
from the relevant regulatory authorities in Hong Kong to enable the
Company to hold repurchased shares in treasury. The conditional
waiver granted by the Hong Kong Stock Exchange on 19 December 2005
was granted on the basis of certain agreed modifications to the
Hong Kong Listing Rules applicable to the Company. This waiver is
renewed annually, in line with our usual practice. Details of the modifications are
available at www.hsbc.com and
the Hong Kong Stock Exchange's HKEX news website
at www.hkexnews.hk. Copies
of the modifications are also available from the Group Company
Secretary, HSBC Holdings plc, 8 Canada Square, London E14 5HQ,
United Kingdom and the Corporation Secretary, The Hongkong and
Shanghai Banking Corporation Limited, 1 Queen's Road Central, Hong
Kong SAR.
The
Company exercised its authority to make market purchases of its own
shares pursuant to the authority granted at last year's AGM. Under
the buy-back announced on 9 May 2018 and completed on 16 August
2018, (the "2018 Buy-back"), the Company repurchased 210,466,091 of
its ordinary shares, all of which were cancelled.
Further
details regarding the proposed authority to be given to the Company
to purchase its own shares, the waiver granted by the Hong Kong
Stock Exchange, the 2018 Buy-back (including shares purchased and
prices paid on a monthly basis up to the latest practicable date
prior to printing this document) are set out in Appendix
2.
The
total number of options to subscribe for ordinary shares
outstanding on 21 February 2019, being the latest practicable date
prior to printing of this document, was 55,378,511 which
represented 0.28 per cent of the issued ordinary share capital
(excluding treasury shares) as at that date. If the Company were to
purchase the maximum number of ordinary shares permitted by this
resolution, the options outstanding on 21 February 2019 would
represent 0.28 per cent of the issued ordinary share capital
(excluding treasury shares).
13 and 14. Additional authority to allot equity securities in
relation to the issue of Contingent Convertible Securities ("CCSs")
and limited disapplication of pre-emption rights
Resolution
13 gives the Directors authority to allot shares and grant rights
to subscribe for, or to convert, any security into ordinary shares
in the Company up to an aggregate nominal amount of
US$2,003,673,053, equivalent to approximately 20 per cent of the
ordinary shares in issue on 21 February 2019, being the latest
practicable date prior to printing this document. This authority
relates to the issue of CCSs.
CCSs
are debt securities which benefit from a specific regulatory
capital treatment under European Union legislation. They are
treated as Additional Tier 1 Capital and, as a banking group, HSBC
is able to hold a certain amount of its Tier 1 Capital in the form
of Additional Tier 1 Capital. The CCSs will be converted or
exchanged into ordinary shares if a defined
trigger event occurs (which currently is the HSBC Group's Common
Equity Tier 1 Capital ratio falling below 7 per
cent). Issuing CCSs gives the Company greater flexibility to manage
its capital in the most efficient and economical way
for the benefit of the shareholders. Please see Appendix 1 for more
information on CCSs.
This
authority is in addition to the authority proposed in Resolutions
8, 9 and 10, which contain the general authority sought on an
annual basis in line with the IA Guidelines and the Hong Kong
Listing Rules. If Resolutions 13 and 14 are passed, the Company
will only issue CCSs pursuant to the authority granted under these
resolutions and not under the authority granted under Resolutions
8, 9 and 10. Although the authority in Resolutions 13 and 14 is not
contemplated by the IA Guidelines, it has previously been discussed
with the Investment Association.
Resolution
14 gives the Directors authority to allot CCSs, or shares issued
upon conversion or exchange of CCSs, without the need to first
offer them to existing shareholders. If passed, Resolution 14 will
authorise the Directors to allot shares and grant rights to
subscribe for or to convert any security into shares in the Company
(or to sell treasury shares held by the Company following any
purchase of its own shares) on a non-pre-emptive basis up to an
aggregate nominal amount of US$2,003,673,053, representing
approximately 20 per cent of the ordinary shares in issue on 21
February 2019, such authority to be exercised in connection with
the issue of CCSs. As at 21 February 2019, being the latest
practicable date prior to printing of this document, the Company
held 325,273,407 of its ordinary shares in treasury, representing
1.60 per cent of the issued ordinary share capital (including
treasury shares) and 1.62 per cent of the issued ordinary share
capital (excluding treasury shares).
The
authorities in Resolutions 13 and 14 will be utilised by the
Directors as considered desirable to comply with or maintain
compliance with the regulatory capital requirements arising in
connection with the relevant European Union legislation and the
prudential regulatory requirements imposed by the Prudential
Regulation Authority ("PRA") and only for those purposes. The Board
will not utilise the authority in Resolutions 13 and 14 to issue
new securities for any other purposes. However, pursuant to the
authority under Resolutions 13 and 14, the Board may issue
additional securities in order to manage the redemption of
outstanding CCSs.
The
approvals would be effective until the Company's 2020 AGM or the
close of business on 30 June 2020, whichever is the earlier. The
Directors expect to seek similar authorities on an annual
basis.
15. Renewal of scrip dividend
authority
The
authority for the Directors to offer a scrip dividend alternative,
whereby shareholders may elect to receive new ordinary shares
instead of dividends in cash was last renewed at the 2018 AGM.
Under the IA Guidelines, shareholder approval to renew the
authority for the Directors to offer a scrip dividend alternative
may be sought for up to three years. The Directors are seeking a
fresh approval to offer a scrip dividend alternative for a further
three years expiring on the conclusion of the AGM in 2022, to
satisfy elections for scrip dividends not only by the issue of new
ordinary shares, credited as fully paid, but also by the sale of
treasury shares.
16. Notice period for meetings
The
UK Companies Act 2006 provides that the minimum notice period for
general meetings of the Company is 21 days unless
shareholders approve a shorter notice period. The passing of this
resolution would enable the Company to call general meetings (other
than annual general meetings) on a minimum of 14 clear days'
notice. This shorter notice period of between 14 and 20 days would
not be used as a matter of routine, but only when the Directors
determine that calling a meeting on less than 21 days' notice is
merited by the business of the meeting and consider it to be to the
advantage of shareholders as a whole. The approval would be
effective until the Company's 2020 AGM or the close of business on
30 June 2020, whichever is the earlier, when it is intended that a
similar resolution will be proposed.
17. Shareholder requisitioned
resolution
Resolution
17 is a special resolution that has not been proposed by your Board
but has been requisitioned by a group of shareholders. It should be
read together with their explanatory statement set out in Appendix
3.
Your
Board's response to the proposed resolution is provided in Appendix
4.
Your Board considers that Resolution 17 is not in the best interests of the Company and its
shareholders as a whole and unanimously recommends that you
vote against Resolution
17.
Information about the 2019 Annual General Meeting
Venue
The
AGM will be held at the International Convention Centre ("ICC"), 8
Centenary Square, Birmingham, B1 2EA which can easily be reached by
public transport.
Refreshments
will be available prior to and at the conclusion of the
AGM.
Getting there
A
location map is below. Please note that the regeneration of central
Birmingham means that there may be temporary changes to driving,
public transport and walking routes around the city. We therefore
encourage all shareholders to plan your journey in advance and
allow sufficient time so as to minimise the impact of any
delays.
By car
The
ICC is easily accessible from the M6, M5 and M42.
Parking
The
closest parking facilities for the ICC are in the Arena Birmingham
(to the North West of the ICC):
- North
Car Park: Access is via King Edward's Road (Postcode for satnav: B1
2NP);
- South
Car Park: Access is via Sheepcote Street (Postcode for satnav: B16
8ET).
By train
The
nearest stations are:
- Birmingham
New Street Station (10-15 minute walk - see below for walking
route);
- Birmingham
Snow Hill Station (15 minute walk); or
- Birmingham
Moor Street Station (25 minute walk).
Walking route from Birmingham
New Street Station: Leave
the station by the Stephenson Street exit. Cross over Stephenson
Street, heading up Lower Temple Street. Turn left onto New Street
and cross Victoria Square. You will pass the Town Hall (on your
left) and the Museum (on your right). Follow the route through to
Centenary Square, passing the Library of Birmingham and The Rep
Theatre (on your right). The ICC is straight
ahead.
Access
The
ICC is accessible by wheelchair. The auditorium is fitted with an
induction loop.
To
help us ensure that the AGM is fully accessible to all
shareholders, please contact Romana Lewis, Assistant Group Company
Secretary (telephone: +44 (0) 20 7991 0100, email:
romana.lewis@hsbc.com) if you have any particular access
requirements or other needs.
Security
Security
checks will be carried out on entry to the AGM. Shareholders are
reminded that cameras and recording equipment will not be allowed
and all mobile telephones must be switched off or set to silent.
Shareholders are encouraged to leave coats and bags in the
cloakroom provided.
To
ensure optimum security within the auditorium, please note that you
will be provided with a wristband once you have been through the
security checks at the venue. You must show your wristband to gain
entry to the AGM.
Attendance and voting
Pursuant
to the Uncertificated Securities Regulations 2001 (as amended),
changes to entries on the principal register of shareholders of the
Company maintained in England (the "Principal Register") or either
the Hong Kong or Bermuda Overseas Branch Registers of the Company
(the "Branch Registers"), as appropriate, after 12.01am (London
time) on Thursday, 11 April 2019 or 12.01am (London time) on the
day immediately before the day of any adjourned meeting (as the
case may be) shall be disregarded in determining the rights of a
shareholder to attend or vote at the AGM or any adjourned meeting
(as the case may be). Accordingly, a shareholder entered on the
Principal Register or the Branch Registers at 12.01am (London time)
on Thursday, 11 April 2019 or 12.01am (London time) on the day
immediately before the day of any adjourned meeting (as the case
may be) shall be entitled to attend and vote at the AGM or any
adjourned meeting (as the case may be) in respect of the number of
such shares entered against the shareholder's name at that
time.
Voting
Voting
at the AGM will be conducted by way of a poll. This means that each
shareholder present or represented will be able to exercise one
vote for each share held. In the case of joint registered holders
of any share, the vote of the senior who tenders a vote, whether in
person or by proxy, shall be accepted to the exclusion of the votes
of the other joint holder(s). For this purpose, seniority shall be
determined by the order in which the names of the holders stand in
the Principal Register or the Branch Registers of the Company, as
appropriate.
Voting
results will be published on our website following the conclusion
of the AGM.
Appointing a proxy
You
may appoint the chairman of the AGM or a person of your choice to
be your proxy to attend, speak and vote on your behalf. A proxy
need not be a member of the Company. You may appoint more than one
proxy, provided that each proxy is appointed to exercise the rights
attached to a different share or shares held by you. If you require
additional forms of proxy, you may photocopy the original form of
proxy enclosed or ask our registrar to send you additional forms
(see "How to submit your form of proxy" below for the registrar's
address).
A form of proxy is enclosed with this document or
may be accessed at www.hsbc.com/proxy.
Whether
or not you propose to attend the AGM, you are requested to complete
and submit a form of proxy in accordance with the instructions
shown on it. The completion and submission of a form of proxy will
not preclude you from attending and voting in person at the
AGM.
How to submit your form of proxy
The form of proxy must be received
by 11.00am (London time) on
Wednesday, 10 April 2019, or
not less than 48 hours before the time of the holding of any
adjourned meeting.
You may submit your form of proxy electronically
at www.hsbc.com/proxy by
entering your Shareholder Reference Number and the Personal
Identification Number which is either printed on your form of proxy
or which has been sent to you by email if you have registered an
email address to receive electronic
communications.
Alternatively,
you may send your completed form of proxy to:
● Computershare
Investor Services PLC, PO Box 1064, The Pavilions, Bridgwater Road,
Bristol, BS99 6BD, United Kingdom;
● Computershare
Hong Kong Investor Services Limited, Rooms 1712-1716, 17th Floor,
Hopewell Centre, 183 Queen's Road East, Hong Kong SAR;
or
● Investor
Relations Team, HSBC Bank Bermuda Limited, 37 Front Street,
Hamilton HM 11, Bermuda.
For
shares held through CREST, proxy appointments may be submitted via
the CREST proxy voting system (see section on "CREST" set out
below).
In
order to be valid, the completed form of proxy (together with any
power of attorney or other authority under which it is signed, or a
copy of such authority certified notarially or in some other way
approved by the Board) must be deposited by 11.00am (London time)
on Wednesday, 10 April 2019, or not less than 48 hours before the
time of the holding of any adjourned meeting, at the offices of the
Company's registrar (see above for the registrar's address). Any
power of attorney or other authority relating to an appointment of
a proxy cannot be submitted electronically and must be deposited as
referred to above for the appointment to be valid.
Asking questions at the AGM
You
have the right to ask questions in relation to the business of the
AGM but no answer need be given if (a) to do so would interfere
unduly with the preparation for the AGM or involve the disclosure
of confidential information,
(b)
the answer has already been given on a website in the form of an
answer to a question, or (c) it is undesirable in the interests of
the Company or good order of the AGM that the question be
answered.
If you have any questions relating to the business
of the AGM that you would like to be addressed, please send an
email to shareholderquestions@hsbc.com including
your Shareholder Reference Number and we will endeavour to address
the issues raised.
Any
questions submitted that are not relevant to the business of the
AGM will be forwarded for the attention of a relevant executive or
the registrar, as appropriate. These might include matters relating
to a shareholder's bank account or affairs which are unlikely to be
relevant to the business of the AGM.
Submitting
a question in advance of the AGM does not affect your rights as a
shareholder to attend and speak at the AGM.
Webcast
The AGM will be webcast live
at www.hsbc.com/agmwebcast and
a recording will be available for viewing until Sunday, 12 May
2019.
CREST
CREST
members who wish to appoint a proxy or proxies by using the CREST
electronic proxy appointment service may do so for the AGM or any
adjourned meeting by following the procedures described in the
CREST manual. CREST personal members or other CREST sponsored
members, and those CREST members who have appointed a voting
service provider, should refer to their CREST sponsor or voting
service provider, who will be able to take the appropriate action
on their behalf.
In
order for a proxy appointment or instruction made by means of CREST
to be valid, the appropriate CREST message (a "CREST Proxy
Instruction") must be properly authenticated in accordance with
Euroclear UK & Ireland Limited's specifications and must
contain the information required for such instructions, as
described in the CREST manual. The message, regardless of whether
it constitutes the appointment of a proxy or is an amendment to the
instruction given to a previously appointed proxy, must, in order
to be valid, be transmitted so as to be received by the issuer's
agent (ID 3RA50) by 11.00am (London time) on Wednesday, 10 April
2019, or not less than 48 hours before the time of the holding of
any adjourned meeting. For this purpose, the time of receipt will
be taken to be the time (as determined by the timestamp applied to
the message by the CREST Applications Host) from which the issuer's
agent is able to retrieve the message by enquiry to CREST in the
manner prescribed by CREST. After this time, any change of
instructions to proxies appointed through CREST should be
communicated to the appointees through other means.
CREST
members, and, where applicable, their CREST sponsor or voting
service providers should note that Euroclear UK & Ireland
Limited does not make available special procedures in CREST for any
particular messages. Normal system timings and limitations will
therefore apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal
member or sponsored member or has appointed a voting service
provider, to procure that his CREST sponsor or voting service
provider takes) such action as shall be necessary to ensure that a
message is transmitted by means of the CREST system by any
particular time. In this connection, CREST members and, where
applicable, their CREST sponsors or voting service providers are
referred, in particular, to those sections of the CREST manual
concerning practical limitations of the CREST system and
timings.
Pursuant
to Regulation 35(5)(a) of the Uncertificated Securities Regulations
2001 (as amended) the Company may treat as invalid a CREST Proxy
Instruction if the Company has actual notice that:
● information
in the instruction is incorrect;
● the
person expressed to have sent the instruction did not in fact send
it; or
● the
person sending the instruction on behalf of the relevant
shareholder did not have the authority to do so.
Nominated persons
The
right to appoint a proxy does not apply to persons whose shares are
held on their behalf by another person who has been nominated to
receive communications from the Company in accordance with section
146 of the UK Companies Act 2006 (the "Act") ("nominated persons").
Nominated persons may have a right under an agreement with the
registered shareholder who holds the shares on their behalf to be
appointed (or to have someone else appointed) as a proxy for the
AGM. Alternatively, if nominated persons do not have such a right,
or do not wish to exercise it, they may have a right under such an
agreement to give instructions to the person holding the shares as
to the exercise of voting rights at the AGM.
The
main point of contact for nominated persons remains the registered
shareholder (for example the stockbroker, investment manager,
custodian or other person who manages the investment). Any changes
or queries relating to nominated persons' personal details and
holdings (including any administration thereof) must continue to be
directed to the registered shareholder and not the Company's
registrar. The only exception is where the Company, in exercising
one of its powers under the Act, writes to nominated persons
directly for a response.
Corporate representatives
Any
corporation which is a shareholder can appoint one or more
corporate representatives who may exercise on its behalf all of its
powers as a shareholder provided that, if it is appointing more
than one corporate representative, it does not do so in relation to
the same share or shares. Any such representative should bring to
the meeting written evidence of his appointment, such as a
certified copy of a board resolution of, or a letter from, the
corporation concerned confirming the appointment.
Members' power to require website publication of audit
concerns
Under
section 527 of the Act, members meeting the threshold requirements
in that section may require the Company to publish on its website a
statement setting out any matter that the members propose to raise
at the AGM relating to (i) the audit of the Company's accounts
(including the Auditor's report and the conduct of the audit) that
are to be laid before the AGM, or (ii) any circumstance connected
with an Auditor of the Company ceasing to hold office since the
previous meeting at which annual accounts and reports were laid.
The Company may not require the members requesting any such website
publication to pay its expenses in complying with sections 527 or
528 of the Act. Where the Company is required to place a statement
on a website under section 527 of the Act, it must forward the
statement to the Company's Auditor no later than the time when it
makes the statement available on the website. The business which
may be dealt with at the AGM includes any statement that the
Company has been required under section 527 of the Act to publish
on its website.
If
you have general queries about your shareholding, please contact
the relevant registrar at the address shown on page
29.
General information
Company's registrar
For
general enquiries, requests for copies of corporate communications,
or a Chinese translation of this Notice and any future documents,
please contact:
● Computershare
Investor Services PLC, The Pavilions, Bridgwater Road, Bristol,
BS99 6ZZ, United Kingdom (email via
website: www.investorcentre.co.uk/contactus);
● Computershare
Hong Kong Investor Services Limited, Rooms 1712-1716,
17th Floor, Hopewell Centre, 183 Queen's Road
East, Hong Kong SAR (email: hsbc.ecom@computershare.com.hk);
or
● Investor
Relations Team, HSBC Bank Bermuda Limited, 37 Front Street,
Hamilton HM 11, Bermuda (email:
hbbm.shareholder.services@hsbc.bm).
Holders
of American Depositary Shares may obtain copies of this document by
calling +1 800 555 2470 or by writing to Proxy Services Corporation
(BNY Mellon ADR Team), 2180 5th Avenue - Suite #4, Ronkonkoma, NY
11779, USA.
Information available on the website
A copy of this Notice, and other information
required by section 311A of the UK Companies Act 2006, can be found
on the Company's website (www.hsbc.com/agm).
Receiving corporate communications
Shareholders may at any time choose to receive
corporate communications in printed form or to receive email
notification of their availability on HSBC's website. To receive
future notifications of the availability of corporate
communications on HSBC's website by email, or to revoke or amend an
instruction to receive such notifications by email, go
to www.hsbc.com/ecomms.
If
you received a notification of the availability of this document on
HSBC's website and for any reason have difficulty in receiving or
gaining access to the document, or you would like to receive a
printed copy of it, or if you would like to receive future
corporate communications in printed form, please write or send an
email (quoting your Shareholder Reference Number) to the registrars
at the relevant address set out above. Printed copies will be
provided without charge. Further copies of this document and future
documents may also be obtained by contacting the registrar. You may
amend your election to receive corporate communications in English
or Chinese by contacting the registrar at the relevant address set
out above.
Documents available for inspection
Copies
of the terms of appointment for the non-executive Directors and the
Group Chairman and the service agreements of the executive
Directors are available for inspection through the Group Company
Secretary at the Company's registered office at 8 Canada Square,
London E14 5HQ, United Kingdom and at 1 Queen's Road Central, Hong
Kong SAR during usual business hours on any business day from the
date of this Notice until the date of the AGM and at the place and
on the date of the AGM from at least 15 minutes before the AGM
begins until the conclusion of the AGM.
Information set out in this Notice
Shareholders
are advised that any telephone number, website or email address set
out in the Notice of AGM, the form of proxy or accompanying
documents should not be used for the purposes of serving
information on the Company (including the service of documents or
information relating to the proceedings at the AGM) unless
otherwise stated.
This
document, for which the Directors of HSBC Holdings plc collectively
and individually accept full responsibility, includes particulars
given in compliance with the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited for the
purpose of giving information with regard to HSBC Holdings plc. The
Directors, having made all reasonable enquiries, confirm that to
the best of their knowledge and belief the information contained in
this document is accurate and complete in all material aspects and
not misleading or deceptive, and there are no other matters the
omission of which would make any statement herein or this document
misleading.
In
the event of a conflict between any translation and the English
text hereof, the English text will prevail.
Directors' interests in the ordinary shares and debentures of
HSBC
Details
of interests of Directors who are standing for election or
re-election in the ordinary shares and debentures of HSBC are set
out in Appendix 5.
Appendix 1
Questions and Answers on Contingent Convertible Securities
("CCSs")
What are CCSs?
CCSs
are debt securities that benefit from a particular regulatory
capital treatment under European Union legislation. CCSs will be
converted or exchanged into ordinary shares if a defined trigger
event occurs. The terms of HSBC's existing CCSs have received
regulatory approval from the Prudential Regulation Authority
("PRA").
As
a banking group, HSBC must meet minimum regulatory capital
requirements in the countries in which it operates. These include
compliance with European Union legislation under which banks and
bank holding companies are required to maintain Tier 1 Capital of
at least 6 per cent of their risk weighted assets. Of that, 1.5 per
cent of risk weighted assets may be in the form of Additional Tier
1 capital. In addition, HSBC is required to satisfy an additional
capital requirement defined by the PRA by maintaining an additional
0.6 per cent of risk weighted assets in the form of Additional Tier
1 capital.
In
order to qualify as Additional Tier 1 capital, a security must
contain certain features designed to increase the resilience of the
issuing bank should the bank's financial condition deteriorate
materially. The CCSs would qualify as Additional Tier 1 capital on
the basis that, on the occurrence of a defined trigger event, they
would be mandatorily converted into or exchanged for ordinary
shares of HSBC. The conversion or exchange would have the effect of
increasing the issuer's Common Equity Tier 1 capital
ratio.
What are the trigger events for the CCSs and what will happen if a
trigger event occurs?
Should
HSBC's Common Equity Tier 1 capital ratio fall below the defined
capital trigger (the "Trigger Event"), the
CCSs would be converted into or exchanged for new ordinary shares
in HSBC on their prescribed terms. The defined capital trigger will
be specified in the terms of the CCSs when they are issued. HSBC's
existing CCSs contain a Common Equity Tier 1 capital trigger of 7.0
per cent on a Capital Requirements Directive IV ("CRD IV") end
point basis which has been approved by the PRA. It is HSBC's
current expectation that future CCSs issued by the Group would
contain the same capital trigger subject to approval by the
PRA.
What steps can HSBC take to mitigate a potential Trigger
Event?
HSBC
is required by its regulators to have in place a recovery plan in
case its regulatory capital levels come under pressure.
Accordingly, if HSBC's capital ratios were to fall materially and
in any event in advance of a Trigger Event, HSBC would seek to
commence recovery actions in order to restore the HSBC Group's
regulatory capital ratios and reduce the likelihood of a Trigger
Event occurring. HSBC's recovery plan includes a number of actions
it may take, including reducing distributions, reducing risk
weighted assets or selling or liquidating assets.
HSBC's
CRD IV end point basis Common Equity Tier 1 capital ratio was 14.0
per cent as at 31 December 2018. HSBC remains a strongly
capitalised bank, able to support both organic growth and dividend
returns to shareholders. HSBC remains well placed to meet expected
future capital requirements, and will continue to take actions to
remain in that position, taking into account the evolution of the
regulatory environment. Given its current capital position and the
planned recovery actions it would take if a Trigger Event was
deemed likely to arise, HSBC considers the circumstances in which a
Trigger Event might occur in practice to be remote.
The
CCSs which HSBC has issued to date have included a term which
provides that on the occurrence of a Trigger Event, the Directors
may elect, at their discretion, to give shareholders the
opportunity to purchase ordinary shares issued on conversion or
exchange of any CCSs on a pro rata basis, where practicable and
subject to applicable laws and regulations. This would be at the
same price as the holders of the CCSs would have acquired the
ordinary shares. Where permitted by law and regulation to do so,
the Company will continue to issue future CCSs including terms
which provide the Company with the discretion to offer the
opportunity to shareholders to purchase ordinary shares issued on
conversion or exchange of CCSs.
Will CCSs be redeemable?
There
is no general right of redemption for the holders of the CCSs. It
is expected that HSBC would have the right to redeem the CCSs after
a minimum period of five years and in certain other specified
circumstances, but any redemption features would need to be
approved by the PRA prior to issue and any redemption would be
subject to PRA approval at the time of redemption.
Will all CCSs be in the form of Additional Tier 1
capital?
Yes.
The Company has no intention to issue capital securities pursuant
to Resolutions 13 and 14 except for securities which constitute
Additional Tier 1 capital under applicable banking
regulations.
Why is HSBC seeking authority to issue CCSs?
Issuing
CCSs gives HSBC greater flexibility to manage its capital in the
most efficient and economical way. It is expected that Additional
Tier 1 capital will be a cheaper form of capital than issuing and
maintaining Common Equity Tier 1 capital (e.g. ordinary shares) to
satisfy the Tier 1 Capital requirement and (provided the Trigger
Event does not occur) is non-dilutive to existing shareholders.
This should improve the returns available to existing shareholders
whilst maintaining HSBC's capital strength, in line with prevailing
banking regulations.
The
authorities in Resolutions 13 and 14 are required because the
Directors are only permitted to issue up to 10 per cent of the
issued ordinary share capital for cash on a non-pre-emptive basis
under the general authorisation in Resolutions 8, 9 and 10 and five
per cent of that may only be used for the purposes of an
acquisition or other capital investment. Given the administrative
burden both in cost and time for a company the size of HSBC to
obtain these types of authorities, the Directors do not consider it
practical or in the interests of shareholders to seek a new
authority each time an issue of CCSs is proposed. It is important
to have the flexibility to react quickly to market and regulatory
demand. Furthermore, in order to obtain PRA approval to the
issuance of CCSs, all necessary allotment authorities need to be in
place, so the process of seeking a new authority in addition to PRA
approval would lead to unacceptable delay.
At what price will the CCSs be issued and how will the conversion
price be fixed?
As
the CCSs are debt securities, they will be issued at or close to
their face value in a manner typical for debt securities. The terms
and conditions for the CCSs will specify a fixed conversion price
or a mechanism for setting a conversion price (which could include
a variable conversion price determined by reference to the
prevailing market price on conversion subject to a minimum "floor"
price) which will determine how many ordinary shares are issued on
conversion or exchange of the CCSs if a Trigger Event occurred. In
respect of any CCSs issued (or shares issued on conversion or
exchange of CCSs) under the authorities in Resolutions 13 and 14,
the conversion price on issue of the CCSs will not be less than
£2.70, being the lowest trading price (recorded on 9 March
2009) of HSBC's ordinary shares over the last 10 years (and will be
subject to typical adjustments for securities of this
type).
How have you calculated the size of the authorities you are
seeking?
The
size of the authorities reflected in Resolutions 13 and 14 have
been determined to provide flexibility to enable HSBC to optimise
its capital structure in light of the regulatory capital
requirements arising from the European Union legislation and PRA
requirements. The authority sought is based on the Directors'
assessment of the appropriate amount required to enable HSBC to
hold the maximum amount of Additional Tier 1 capital taking into
account its expected risk weighted asset figures and applying the
conversion price based on historic lows of HSBC's share price over
the last 10 years referred to above. The intention is to give the
Directors' flexibility in managing HSBC's capital structure. For
this reason, the resolutions give the Directors authority to set
the specific terms of the CCSs after considering market practice
and requirements at the time.
Waiver granted by the Hong Kong Stock Exchange
The
Hong Kong Stock Exchange has granted the Company a waiver from
strict compliance with the requirements of Rule 13.36(1) of the
Hong Kong Listing Rules pursuant to which the Company is permitted
to seek (and, if approved, to utilise) the authority under
Resolutions 13 and 14 to issue CCSs (and to allot ordinary shares
into which they may be converted or exchanged) in excess of the
limit of the general mandate of 20 per cent of the Company's issued
share capital (the "Mandate"). The waiver has been granted on terms
that permit the Mandate, if approved, to continue in force
until:
(i) the
conclusion of the first annual general meeting of the Company
following the date on which the Mandate is approved (or the close
of business on 30 June 2020, whichever is the earlier) at which
time the Mandate shall lapse unless it is renewed, either
unconditionally or subject to conditions; or
(ii) such
time as it is revoked or varied by ordinary resolution of the
shareholders in general meeting.
Appendix 2
Purchase of Ordinary Shares by the Company
Set
out below is information concerning the proposed general mandate
for the purchase of shares by the Company (Resolution 12), which
incorporates the Explanatory Statement required to be sent to
shareholders in accordance with the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited ("Hong Kong
Listing Rules") as well as details of the conditional waiver
granted by the Hong Kong Stock Exchange to enable the Company to
hold in treasury any shares it may repurchase.
(a) It
is proposed that the Company be given authority to purchase up to
2,003,673,053 ordinary shares of US$0.50 each (which represent 10
per cent of the ordinary shares in issue on 21 February 2019 being
the latest practicable date prior to the printing of this
document). Purchases of shares would be at prices not below the
nominal value of each ordinary share, US$0.50 or the equivalent in
the relevant currency in which the purchase is effected, and at not
more than 105 per cent of the average of the middle market
quotations for the ordinary shares on the London Stock Exchange for
the five dealing days before the relevant purchase or 105 per cent
of the average of the closing prices of the ordinary shares on the
Hong Kong Stock Exchange for the five dealing days before the
relevant purchase, whichever is lower.
(b) The
Directors believe that it is in the best interests of the Company
and its shareholders to have a general authority from shareholders
to enable the Company to purchase ordinary shares in the market and
to give power to the Directors to exercise such authority. The
Directors intend that purchases of ordinary shares should only be
made if they consider that the purchase would operate for the
benefit of the Company and shareholders, taking into account
relevant factors and circumstances at that time, for example the
effect on earnings per share.
(c) It
is expected that purchases will be funded from the Company's
available cash flow or liquid resources and will, in any event, be
made out of funds legally available for the purchase in accordance
with the Articles of Association of the Company and the applicable
laws of England and Wales.
(d) The
Directors would not make purchases in circumstances where to do so
would have a material adverse effect on the capital requirements of
the Company or the liquidity levels which, in the opinion of the
Directors, are from time to time appropriate for the Company. If
the power to make purchases were to be carried out in full
(equivalent to 10 per cent of the ordinary shares in issue on 21
February 2019 being the latest practicable date prior to the
printing of this document) there might be a material adverse impact
on the capital or liquidity position of the Company (as compared
with the position disclosed in its published audited accounts for
the year ended 31 December 2018).
(e) None
of the Directors, nor, to the best of the knowledge of the
Directors having made all reasonable enquiries, any close
associates (as defined in the Hong Kong Listing Rules) of the
Directors, has a present intention, in the event that Resolution 12
is approved by shareholders, to sell any ordinary shares to the
Company. No core connected persons (as defined in the Hong Kong
Listing Rules) of the Company have notified the Company that they
have a present intention to sell shares in the Company to the
Company or have undertaken not to sell any of the shares in the
Company held by them to the Company, in the event that Resolution
12 is approved.
(f) Under the
provisions of the UK Companies Act 2006 (the "Act") the Company is
permitted, following any repurchase of ordinary shares, to retain
and hold such shares in treasury. While that Act does not impose a
limit on the number of shares that a company can hold in treasury,
UK investor protection guidelines and market practice in the United
Kingdom is to limit the extent of any share purchase authority to
10 per cent of issued share capital, exclusive of treasury shares.
On 19 December 2005, the Hong Kong Stock Exchange granted a
conditional waiver to the Company to enable it to hold shares which
it may repurchase in treasury (the "2005 Waiver"). The 2005 Waiver
is subject to certain conditions, including compliance by the
Company with all applicable laws and regulations in the United
Kingdom in relation to the holding of shares in treasury. As part
of the 2005 Waiver, the Company has agreed with the Hong Kong Stock
Exchange a set of modifications to the Hong Kong Listing Rules
necessary to enable the Company to hold treasury shares. The
modifications also reflect various consequential matters to deal
with the fact that the Company may hold treasury shares in the
future. A full version of the modifications is available on the
Company's website, www.hsbc.com, and
the Hong Kong Stock Exchange's ("HKEX") news
website, www.hkexnews.hk. Copies
of the modifications are also available from the Group Company
Secretary, HSBC Holdings plc, 8 Canada Square, London E14 5HQ,
United Kingdom and the Corporation Secretary, The Hongkong and
Shanghai Banking Corporation Limited, 1 Queen's Road Central, Hong
Kong SAR. In accordance with the terms of the 2005 Waiver, the
Company has confirmed to the HKEX that it will comply with the
applicable law and regulation in the United Kingdom in relation to
the holding of any shares in treasury and with the conditions of
the 2005 Waiver in connection with any shares which it may hold in
treasury.
(g) The
Directors have undertaken to the HKEX that, if they exercise any
power of the Company to make purchases pursuant to Resolution 12,
they will do so in accordance with the Hong Kong Listing Rules (as
modified in accordance with the terms of the 2005 Waiver to enable
the Company to hold in treasury any shares it may repurchase) and
the applicable laws of England and Wales.
(h) The
Directors are not aware of any consequences which would arise under
any applicable Takeover Code as a result of any purchases made by
the Company pursuant to Resolution 12, if approved.
(i) The
Company repurchased for cancellation 210,466,091 ordinary shares on
the London Stock Exchange pursuant to the share buy-back, which
concluded on 16 August 2018. The table below outlines the number of
shares purchased during the buy-back programme in 2018 on a monthly
basis.
|
Month
|
Number of shares
|
Highest price paid per share
|
Lowest price paid per share
|
Average price paid per share
|
Aggregate price paid
|
|
|
|
(£)
|
(£)
|
(£)
|
(£)
|
|
May 2018
|
43,843,281
|
7.4990
|
7.1340
|
7.3027
|
320,172,904
|
|
June 2018
|
65,164,512
|
7.3910
|
7.0030
|
7.2110
|
469,898,070
|
|
July 2018
|
65,467,508
|
7.3600
|
6.9360
|
7.1134
|
465,698,679
|
|
August 2018
|
35,990,790
|
7.2790
|
6.9860
|
7.1443
|
257,128,448
|
(j) The
highest and lowest mid-market prices at which ordinary shares or,
in the case of the New York Stock Exchange, American Depositary
Shares ("ADSs"), have traded on the Hong Kong, London, New York,
Paris and Bermuda Stock Exchanges during each of the twelve
completed months prior to the latest practicable date before
printing of this document were as follows:
|
Month
|
Hong Kong
Stock Exchange
|
London
Stock Exchange
|
New York
Stock Exchange
(ADSs1)
|
NYSE Euronext
Paris Stock Exchange
|
Bermuda Stock Exchange
|
|
|
Highest
|
Lowest
|
Highest
|
Lowest
|
Highest
|
Lowest
|
Highest
|
Lowest
|
Highest
|
Lowest
|
|
|
(HK$)
|
(HK$)
|
(£)
|
(£)
|
(US$)
|
(US$)
|
(€)
|
(€)
|
(BD$)
|
(BD$)
|
|
February 2018
|
84.05
|
78.00
|
7.61
|
7.17
|
54.13
|
49.63
|
8.58
|
8.12
|
-
|
-
|
|
March 2018
|
77.90
|
74.00
|
7.20
|
6.65
|
49.60
|
47.30
|
8.19
|
7.64
|
9.95
|
9.65
|
|
April 2018
|
78.70
|
72.40
|
7.25
|
6.62
|
50.26
|
47.17
|
8.33
|
7.63
|
9.55
|
9.30
|
|
May 2018
|
78.45
|
74.95
|
7.46
|
7.11
|
50.51
|
48.16
|
8.55
|
8.09
|
9.55
|
9.55
|
|
June 2018
|
77.25
|
72.50
|
7.35
|
7.02
|
49.38
|
46.57
|
8.47
|
8.03
|
9.90
|
9.70
|
|
July 2018
|
75.05
|
72.20
|
7.31
|
6.99
|
48.50
|
46.52
|
8.30
|
7.92
|
-
|
-
|
|
August 2018
|
74.25
|
68.85
|
7.26
|
6.69
|
47.41
|
44.01
|
8.15
|
7.52
|
9.15
|
8.75
|
|
September 2018
|
69.75
|
66.30
|
6.82
|
6.51
|
44.92
|
42.81
|
7.68
|
7.31
|
8.80
|
8.35
|
|
October 2018
|
68.45
|
60.50
|
6.71
|
6.01
|
44.20
|
38.57
|
7.68
|
6.79
|
8.60
|
8.05
|
|
November 2018
|
67.65
|
64.65
|
6.74
|
6.34
|
43.27
|
40.88
|
7.65
|
7.24
|
8.50
|
8.50
|
|
December 2018
|
68.20
|
63.35
|
6.80
|
6.36
|
43.47
|
40.26
|
7.65
|
7.03
|
8.35
|
8.15
|
|
January 2019
|
66.30
|
63.25
|
6.57
|
6.31
|
42.48
|
40.43
|
7.42
|
7.09
|
-
|
-
|
1
Each ADS represents five ordinary shares.
Appendix 3
Explanatory statement supplied by the Midland Clawback Campaign
Shareholder group in support of the requisitioned Resolution
17
Integrated
pension (aka offset pension or clawback) is a process whereby, a
company pension is reduced on the member reaching state pension
age. Originally intended to assist the lowest paid, this actually
penalises employees, as calculations are linked to years served,
not salary.
The
application of integrated pension is therefore:
● Disproportionate,
favouring the highest paid
● Penalising
the lowest paid; creating financial hardship
● Creating
indirect discrimination
Midland
Bank/HSBC offered promises, but not fulfilled, by
● Using
misleading terminology for 40+ years
● Incorrectly
quoting a gold plated 2/3rd final salary scheme
●
Not communicating clearly and
consistently
Background
In
1974, almost 30 years after Integrated Pensions became statute,
Midland Bank decided to implement this practice, applying their
newly invented heading "State Deduction". This when other
institutions were already looking to cap or cancel this practice. A
2002 pension industry survey reported 60% of DBS schemes did not
suffer clawback. A 2005 survey that 70% of open DBS schemes had no
clawback. Thus, many institutions have dropped clawback from their
pensions. By the time HSBC stopped applying this penalty against
new entrants, 51,000 staff were impacted.
Disproportionate
State
Deduction is calculated at 1/80ths x years' service x State Pension
calculation (on leaving or retirement). There is no link to salary,
or the pension received. Thereby, a senior manager retiring on
£75,000 annual pension, on reaching State Pension Age might
suffer a £2,500 a year "State Deduction", (3% of pension).
However, a back office clerk/cashier retiring on £10,000
pension, with the same length of pensionable service, suffers the
same £2,500 deduction, (25% reduction). This is grossly unfair
and morally indefensible.
Penalises the Lowest Paid, Creating Financial Hardship
Many
former staff are struggling. One such is Barbara who joined in 1965
and, due to the policies of the time, lost 11 years pension rights
simply for getting married, and so became affected. She receives a
gross pension of £3507, and suffers "State Deduction" of
£1009; almost 30% reduction.
Now
aged 71, she still needs to work to avoid the embarrassment of
asking for state benefits.
Indirect discrimination
The
majority of lower paid staff were women. Few were expected to
desire a career, and this legislation became damaging to their
financial welfare. Those taking career breaks to have children
found that, on returning to work, they were re-employed on new
contracts, meaning their pensions were now subject to
clawback.
HSBC
UK handles 23 pension schemes, but only the post 1974 Midland
scheme (27% of all pension scheme members) unfairly suffers a
feature called "State Deduction".
Misleading Terminology
The
term "State Deduction" is completely misleading. It is not the
State making a deduction, rather HSBC withholding rightful monies
from workers. Many staff wrongly believing it was linked to SERPS,
and therefore a deduction made by the State. It is unclear why the
Bank chose to create the "State Deduction" phrase, when the
officially recognised terms in daily use were Clawback,
Integration, and Offset Pension.
Early
leaflets, 1975-1988, failed to mention or explain what "State
Deduction" was. Recent HSBC communication indicates it is an
abbreviation of "State Pension Deduction". Such wording appears
nowhere within the leaflets; further evidencing how staff were
misled.
Gold Plated 2/3rd Final Salary
Midland
recruited staff with the promise of a 2/3rd final salary pension in
return for 40 years loyal service. Yet they never explained it was
only 2/3rds if State Pension calculations were included within the
figures. New recruits were advised to "look at the full package
rather than compare your salary with those of competitors". How
misleading.
Not Communicated Clearly and Consistently
In
January 2018, the bank issued an explanatory booklet to all
impacted staff. This is welcomed, but is 40 years too late; and
further demonstrates bank concern that communication had been less
than needed. A statement confirmed to the Works and Pensions Select
Committee, chaired by Frank Field.
Midland
Bank did not make information on clawback easily available to new
staff, nor was it mentioned on induction or initial training
courses, despite Russell Picot, Chair of the Pension Trustee Board
stating to the Work & Pensions Select Committee in his response
to their enquiry that this was his "understanding". Individual
explanatory booklets were not issued to staff, and new entrants
were unlikely to ask. The 1975 leaflets so far uncovered are
incomplete regarding appropriate wording or explanation. Without
such knowledge, new staff were denied the opportunity to take
appropriate financial action to prepare for state retirement
age.
Campaign and the Future
As
word of this injustice spread, a campaign group was established,
now with c10,000 members. It is supported by both MP's and Peers,
plus UNITE the union, and an "All Party Parliamentary Group" has
been established to further the campaign; already initiating
investigations by the Equalities Commission, and input towards
preliminary legal advice.
The
cost of correction, spread over twenty years, is small compared to
the bank's annual profits. Yet if uncorrected, longer term
reputational damage will be detrimental, including as a credible
employer. If this is how HSBC treats former employees, who would
wish to join?
The
media have already picked up on this campaign, including coverage
in the Telegraph, Financial Advisor, Moneybox and Women's Hour.
Reporting does not show HSBC in a favourable light, and adversely
impacts the banks "Reputational Risk".
It
is time for HSBC to do the right thing, no matter how hard. The Rt
Hon Frank Field has asked HSBC to "… mitigate clawback as a
gesture of appreciation to the dedicated and long-serving staff,
often on low pay, whose work contributed to the company's
profitability over decades."
Shareholders
should pass this Resolution, thereby remedying the disparate impact
of "State Deduction".
Appendix 4
The Board's response to Resolution 17 requisitioned by the Midland
Clawback Campaign Shareholder group
Your Directors consider that Resolution 17
is not in the best interests of the Company and its
shareholders as a whole and unanimously recommend that you
vote against Resolution
17 for the following reasons:
● The
application of the State Deduction to all members of the post 1974
Midland Section ("Post 1974 Section") of the HSBC Bank (UK) Pension
Scheme ("the Scheme") is not unfair, disproportionate or
discriminatory.
● The
State Deduction feature of the Scheme has been clearly and
consistently communicated within the Scheme communications and has
been applied in accordance with the Scheme Trust Deed and
Rules.
● HSBC's
external legal advisers have confirmed that the design and
application of the State Deduction feature is legal and is not
unlawfully discriminatory.
● The
overall pension benefit received by Post 1974 Section members was
and remains market competitive, particularly given the Scheme was a
final salary, non-contributory scheme for its members until 30 June
2009.
● The
implementation of Resolution 17 would raise complex issues,
including relating to the interests of members of other sections of
the Scheme and other HSBC pension schemes, particularly for defined
contribution members, and would result in inconsistent treatment of
these members.
● It
is estimated that the removal of the State Deduction feature for
future pension payments only, which the Board believes is the
intention of the shareholders proposing Resolution 17, would cost
HSBC in the region of £450 million. If the State Deduction was
required to be removed on a retrospective basis, it is not possible
to make a reliable estimate of the impact at this stage but it
would be considerably more.
HSBC has engaged actively over a number of months on this issue
with this group. The concerns raised by this group of shareholders
have been carefully considered by the Board.
The Board's detailed explanation and position on the issues raised
by Resolution 17 are provided below.
What is the Post 1974 Section?
The
Post 1974 Section provides final salary benefits. It was designed
to provide members with an overall pension equivalent to two-thirds
of their final pensionable salary at retirement, provided a member
had worked for HSBC for 40 years.
The
Post 1974 Section was non-contributory until 30 June 2009, and was
closed to new members in July 1996. Since that date new joiners
have been enrolled into the defined contribution section of the
Scheme which does not provide a guaranteed income in
retirement.
What is the State Deduction?
The
State Deduction feature is the design used to take account of the
fact that employees would usually receive a pension income from the
UK government when they reach State Pension Age (this design is
otherwise known as pension integration). It applies a downward
adjustment to the Scheme pension that is payable when a member
reaches that age, so that overall the Scheme's target level of
income for members in retirement (relative to service) is broadly
maintained. At the time this feature was introduced in 1975, a
large number of pension schemes integrated their pension benefits
with the state pension and a significant number of these schemes
continue to contain similar features, albeit using different
approaches to achieve the integration.
Which members of the Scheme does the State Deduction feature apply
to?
All
members of the Post 1974 Section (approximately 52,000 members).
All UK employees who joined HSBC after 31 December 1974 and before
1 July 1996 were eligible to join this section.
What is "Clawback"?
Clawback
is a term used by the group of shareholders proposing Resolution 17
(the "Midland Clawback Campaign Shareholder group") to refer to the
State Deduction feature. The Board's view is that "Clawback" is not
an accurate term to describe this feature. No aspect of members'
benefits, or amounts paid, are or will be clawed back,
nor are they "withheld". HSBC has always funded the
Scheme on the basis that the State Deduction will be
applied.
Is continuing to apply the State Deduction to the Post 1974 Section
consistent with market practice?
Yes.
HSBC has consulted with a number of external advisers with
experience of other large final salary pension schemes who have
confirmed that a significant number of the non-HSBC pension schemes
on which they advise have a similar feature to the State Deduction.
In particular, a number of other UK banks have similar
arrangements.
How has the State Deduction been amended to reflect changes to the
State Pension Age?
Since
the State Deduction feature was introduced, the UK government has
increased the State Pension Age. When it was introduced, the State
Deduction was to be applied at age 60 and 65 for females and males,
respectively. When the State Pension Ages began to increase, HSBC
delayed the application of the State Deduction until members
reached the new State Pension Age. HSBC chose to make this change
in order to protect members against the impact of rising State
Pension Ages.
Is the State Deduction an unfair or discriminatory
practice?
The
Board's view is that this is not an unfair or discriminatory
practice. HSBC has also received external legal advice to confirm
that the State Deduction is not unlawfully
discriminatory.
The
Board notes that the State Deduction is calculated based
on:
(1) a
member's total period of pensionable service up to 30 June 2009 (at
which point accrual was capped and HSBC introduced member
contributions); and
(2) the
Basic State Pension payable over the 52 weeks ending on the earlier
of:
(i) the
date the member left pensionable service; or
(ii) 30
June 2015 when the build-up of further final salary pensionable
service in the Scheme stopped.
It
is then pro-rated for members who worked part time.
Due
to the way the calculation methodology works, the proportion that
the State Deduction represents of a member's total pension will be
higher where the amount of that member's total pension is lower.
There are a number of factors that impact the size of a member's
total pension:
● Final
Pensionable Salary - members who have a lower final pensionable
salary will receive a lower pension in comparison to those on a
higher final pensionable salary (assuming the same period of
service);
● Commutation
- at retirement, members are offered the choice of taking their
full pension or, as an alternative, an immediate tax free cash lump
sum up to certain limits and a lower residual pension;
● Early
retirement - members who choose to take their pension early will
receive a lower pension due to the longer period over which they
will receive pension payments.
The
State Deduction will therefore be a higher proportion of a member's
total pension for those members who have a lower income or have
elected to take a tax free lump sum or have elected to take their
pension early.
Having
carefully reviewed the position and taken external legal advice,
the Board does not accept the comment that the State Deduction is
an unfair or a discriminatory practice. To the contrary, HSBC has
taken steps to protect members' benefits - for example, by delaying
the application of the State Deduction until members reach the new
State Pension Age (as outlined above).
Were the Post 1974 Section members told about the State Deduction
at the time?
Yes. The State Deduction feature has been
communicated clearly and consistently, including an illustration of
how it will apply in member guides, since it was introduced in
1975. Annual pension statements for active members have been sent
since the early 1990s. These made explicit reference to the State
Deduction feature, including figures which clearly showed that, at
State Pension Age (based on the members' current service period),
an amount would be deducted from their total pension.
The State Deduction amount was also quoted on members
leaving/retirement correspondence.
Were the communications that were sent to members of the Post 1974
Section unclear, inconsistent or misleading?
No.
The Scheme Trustee Chair has carried out an extensive review of the
scheme documents and correspondence during the period from 1975 to
2017, and concluded that the State Deduction has been communicated
in a transparent manner.
A summary of the review is available in the
Trustee Chair's letter to the Rt Hon Frank Field MP, Chair of the
Parliamentary Work and Pensions Committee. This letter is available
at: https://www.parliament.uk/documents/ commons-committees/work-and-pensions/Correspondence/Letter-from-Russell-Picot-Chair-HSBC-Pension- Trust-UK-to-Chair-regarding-Midland-section-12-January-2018.pdf
External
legal advisers have also reviewed the Post 1974 Section
communications and are satisfied that the communication of the
State Deduction feature has been clear and consistent.
The
Board does not accept the comment that communications with Post
1974 Section members were unclear or misleading.
What is the UK Government's position?
Based on a statement made by the Pensions Minister
in November 2017, HSBC understands that the UK government does not
support calls for the withdrawal of the State Deduction or any
similar design feature. The statement made by the Pensions Minister
in November 2017 concluded that "[i]t would not be right to
compel schemes to withdraw this integration arrangement. That would
amount to a retrospective change imposing significant additional
unplanned costs. Pension scheme rules on the calculation of
benefits are many and varied, and must remain a matter for
employers and scheme trustees to decide."
The full statement is available
at: https://www.parliament.uk/written-questions-answers-statements/written-question/commons/2017-11-13/112545.
Why are shareholders seeking to address this issue through a
shareholder resolution rather than a complaint or
claim?
This
is a matter for the relevant Scheme members. However, the Board
considers that this issue would be more appropriately dealt with as
a complaint or claim rather than a shareholder
resolution.
What would be the impact of removing the State
Deduction?
Through
its engagement with this group, the Board understands that the
shareholders proposing Resolution 17 intend for HSBC to remove the
State Deduction on a forward-looking basis only, i.e. for future
pension payments, not past payments.
The
overall pension benefit received by Post 1974 Section members was
and remains market competitive, particularly given the Scheme was a
final salary, non-contributory scheme up to 30 June 2009 when
member contributions were introduced. When considering making
changes to Scheme benefits, consideration must be given to the
entire Scheme membership.
HSBC
has made contributions to the Scheme to meet its future pension
obligations on the basis that the State Deduction feature would
apply from members' State Pension Age. On this basis, if HSBC were
to remove the State Deduction for future pension payments only, the
current estimate is that this proposal would require a contribution
from HSBC in the region of £450 million.
This
contribution would enhance the final salary benefits of the Post
1974 Section members only. No other members of the Scheme,
including defined contribution members, would receive any benefit.
This contribution would therefore result in the Post 1974 Section
members receiving favourable treatment from HSBC.
Should
Resolution 17 be passed, the Board would need to consider a number
of factors, including whether it is appropriate to remove the State
Deduction feature only going forward (and not retrospectively) and
the interests of all members of HSBC's pension schemes. If the
State Deduction was required to be removed on a retrospective
basis, it is not possible to make a reliable estimate of the impact
at this stage but it would be considerably more than £450
million.
Appendix 5
Directors' interests in the ordinary shares and debentures of
HSBC
According
to the register of Directors' interests maintained by HSBC Holdings
plc pursuant to section 352 of the Securities and Futures Ordinance
of Hong Kong, the Directors who are standing for election or
re-election had the following interests, all beneficial unless
otherwise stated, in the shares and debentures of HSBC and its
associated corporations on the latest practicable date prior to the
printing of this document being 21 February 2019.
In
this Appendix, all references to "beneficial owner" means a
beneficial owner for the purposes of the Securities and Futures
Ordinance of Hong Kong.
|
HSBC Holdings plc Ordinary Shares
|
Beneficial
owner
|
Child under 18 or spouse
|
Jointly
with another person
|
Trustee
|
Total interests
|
|
Kathleen Casey1
|
9,635
|
-
|
-
|
-
|
9,635
|
|
Laura
Cha
|
10,200
|
-
|
-
|
-
|
10,200
|
|
Henri
de Castries
|
18,064
|
-
|
-
|
-
|
18,064
|
|
John Flint2
|
822,252
|
-
|
5,439
|
-
|
827,691
|
|
Irene
Lee
|
11,172
|
-
|
-
|
-
|
11,172
|
|
Heidi Miller1
|
4,420
|
-
|
-
|
-
|
4,420
|
|
Marc Moses2
|
1,533,039
|
-
|
-
|
-
|
1,533,039
|
|
David
Nish
|
-
|
50,000
|
-
|
-
|
50,000
|
|
Ewen Stevenson2
|
106,420
|
-
|
-
|
-
|
106,420
|
|
Jonathan
Symonds
|
38,823
|
4,998
|
-
|
-
|
43,821
|
|
Jackson Tai1 3
|
22,970
|
11,430
|
21,675
|
-
|
56,075
|
|
Mark
Tucker
|
288,381
|
-
|
-
|
-
|
288,381
|
|
Pauline
van der Meer Mohr
|
15,000
|
-
|
-
|
-
|
15,000
|
1 These
are interests in listed American Depository Shares ("ADSs"), which
are categorised as equity derivatives under Part XV of the
Securities and Futures Ordinance of Hong Kong: Kathleen Casey,
1,927; Heidi Miller, 884; and Jackson Tai, 11,215. Each ADS
represents five HSBC Holdings Ordinary Shares.
2 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
pages 191 to 192 of the Annual Report & Accounts
2018. At 21 February 2019, the aggregate interests under the
Securities and Futures Ordinance of Hong Kong in HSBC Holdings
ordinary shares, including interests arising through employee share
plans and the interests above were: John Flint - 1,408,565; Marc
Moses - 3,321,777; and Ewen Stevenson - 106,420. Each Director's
total interests represents less than 0.02 per cent of the shares in
issue (both including and excluding treasury shares).
3 Jackson
Tai has a non-beneficial interest in 11,430 shares of which he is
custodian.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
|
HSBC
Holdings plc
|
|
|
|
|
|
By:
|
|
|
Name:
Ben J S Mathews
|
|
|
Title:
Group Company Secretary
|
|
|
|
|
|
Date:
06th
March
2019
|