Share-Based Plans

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Employee Stock Purchase Plans During 2014, we introduced the HSBC International Employee Share Purchase Plan (the "HSBC ShareMatch Plan"). The HSBC ShareMatch Plan allows eligible employees to purchase HSBC shares with a maximum monthly purchase of $420. For every three shares purchased under the HSBC ShareMatch Plan (the "Investment Share") the employee is awarded an additional share at no charge (the "Matching Share"). The Investment Share is fully vested at the time of purchase while the Matching Share vests at the end of three years contingent upon continuing employment with the HSBC Group.

Prior to 2014, the HSBC Holdings Savings-Related Share Option Plan ("HSBC Sharesave Plan") allowed eligible employees to enter into savings contracts of one, three or five year lengths, with the ability to decide at the end of the contract term to either use their accumulated savings to purchase HSBC ordinary shares at a discounted option price or have the savings plus any interest repaid in cash. The HSBC Sharesave Plan was discontinued in 2013. During 2012, employees were able to save up to $400 per month over all their HSBC Sharesave Plan contracts.

Compensation expense related to Employee Stock Purchase Plans was less than $1 million in 2014, 2013 and 2012, respectively.

The following table presents information for the HSBC Sharesave Plan:



At December 31,	2012
	(dollars are in millions)
Sharesave (5 year vesting period):
Total options granted	107,000
Fair value per option granted	$	1.61
Significant assumptions used to calculate fair value:
Risk free interest rate	0.92		%
Expected life (years)	5
Expected volatility	25		%
Sharesave (3 year vesting period):
Total options granted	430,000
Fair value per option granted	$	1.63
Significant assumptions used to calculate fair value:
Risk free interest rate	0.45		%
Expected life (years)	3
Expected volatility	25		%
Sharesave (1 year vesting period):
Total options granted	153,000
Fair value per option granted	$	1.35
Significant assumptions used to calculate fair value:
Risk free interest rate	.23		%
Expected life (years)	1
Expected volatility	25		%

Restricted Share Plans Under the HSBC Group Share Plan, share-based awards have been granted to key employees typically in the form of restricted share units ("RSUs"). These shares have been granted subject to either time-based vesting or performance based-vesting, typically over three to five years. Annual awards to employees are generally subject to three-year time-based graded vesting. We also issue a small number of off-cycle grants each year, primarily for reasons related to recruitment of new employees. Compensation expense for restricted share awards totaled $39 million in 2014 and $34 million in both 2013 and 2012. As of December 31, 2014, future compensation cost related to grants which have not yet fully vested is approximately $56 million. This amount is expected to be recognized over a weighted-average period of one year.

Beginning in 2014, a fixed pay allowance ("FPA") program was introduced which grants HSBC shares to certain key employees on a quarterly basis. The FPA shares are not linked to the achievement of any performance conditions and they vest immediately. However, these shares are subject to various retention periods of up to five years based on the role of the employee. Compensation expense related to FPA shares totaled $7 million in 2014.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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