Five of the Bank of Bermuda?s senior executives could profit handsomely ? to the tune of more than $10 million in cash and investments ? if they meet certain first year targets.

Together they stand to make close to $7 million in cash and a further $4.7 million in HSBC shares if they reduce the bank?s head count by 150 people, or by $12 million in salary costs, while at the same time retaining a significant number of specified ?key? staff, in the first year after the sale.

The proposed deal ? which if given the green light by regulators and shareholders would see the Island?s largest bank go to multinational financial services giant HSBC ? was announced at the end of October, and when made public, management were said to be receiving no extra benefit from the deal.

However, details of a pocket-lining incentive plan were laid out in proxy materials mailed out this week to those investors holding Bank of Bermuda shares as of 24 November. The special bonus, with it being tied to meeting set ?targets?, will not to be paid until 14 months after the sale closes, but means top managers of the bank knew they could profit handsomely in the year after HSBC took over.

At a press conference on October 28, announcing the possible sale, board chairman Joseph Johnson said, adding that he was speaking from the board?s standpoint, that management would continue with the same payment, bonus and option plans and that there were would be no special incentives under the deal.

Proxy materials made public this week show that salary and bonuses will continue for executives at the same level, but also show the special bonus that could be paid out after the first year. It was also made clear that the bank?s board was aware of the incentives when they agreed to the deal.

In saying that about 33 directors and senior management had ?various interests in the amalgamation... that may differ from the interests of our shareholders generally?, it was said that board members ?were aware of these additional interests and considered them when they approved the agreements with HSBC?.

Those who stand to benefit the most are COO Philip Butterfield, head of private client services Wayne Chapman, head of banking services Michael Collins and head of the bank?s fund administration arm, Global Fund Services, Paul Smith, are eligible for the incentive.

CEO Henry Smith and CFO Ed Gomez were excluded from the plan as Mr. Smith has been asked to leave within a year while Mr. Gomez is to be replaced by an HSBC designated chief financial officer, once the sale goes through.

Eligibility for the fat bonus depends on ?achieving a head count reduction of 150 in the HSBC Group or savings of $12 million from the HSBC Group?s salary costs and retention of 70 percent of specified key staff agreed to by HSBC and the bank?.

Although the bank only revealed the aggregate amounts that could be earned by executives under the special bonus plan, it said that the combined total that could be paid to the five was $6.59 million, which was to be divided among them ?in an amount roughly commensurate with their present salary and bonus levels?.

In addition, a total value of $4.7 million in HSBC restricted shares will be granted to these individuals, divided again to be roughly commensurate with their current pay and bonus levels, which will become vested in three years.

When asked if it would not be in the interest of shareholders to break out that information individually, rather than as an aggregate sum, Mr. Smith said: ?It is something that we have never done; we have never been obliged to do,? adding ?our whole business is actually driven by our ability to, here in Bermuda, to treat clients with perhaps a level of privacy that other companies don?t, in other places.?

He concluded that it was clear from the numbers that no one person would be making that much: ?We do not believe it is important to release that information. We do an aggregate so that people can see that any individual number cannot be that big if you look at the aggregate.?

Although it is not clear how much exactly each executive could make, roughly divided it roughly divides to more than $2 million in cash and stock options, each.

The proxy information also showed that there were a significant number of Bank of Bermuda stock options still held by board members and senior executives.

Options, which normally may not be exercised for a specific period of time, will become ?fully exercisable and vested upon the amalgamation.

The shares directors and senior management reportedly held, as of the record date for the HSBC vote, which was November 24, was more than 2.5 million in options. Those options, with 112,552 held by directors and some 2.4 million by senior management, are exercisable at an average price of $35.59 and $33.92 respectively.

However, as these options were outstanding as of the record date, they will not reportedly be eligible for the $5 special dividend, and will therefore presumably only garner $40 if they are cashed out. The shares can however be transferred into HSBC ordinary shares.