HSBC Avoids Rebellion But Makes Pay Concessions

Banking giant HSBC vowed to implement a new pay structure for its bosses today as it avoided a shareholder rebellion on fat cat salaries.
At its annual general meeting in London a commanding majority of shareholders voted for a new three-year policy which will slash the maximum amount its directors can earn by 7%.
It will cut the amount of cash given to directors in lieu of pension from 50% to 30% of base salary. They will also have to wait three years before they receive long-term bonuses.
Shareholders also voted for pay awards for 2015 to be enacted despite shareholder advisory group Pirc stating earlier this week that HSBC’s salaries were excessive.
Tax protestors were also out in force at the meeting dressed in City suits and bowler hats.
However, an overwhelming 96% of investors approved the pay packages including a £7.34million pay-out to chief executive Stuart Gulliver and £2.5million to chairman Douglas Flint. That is down from £7.61million in 2014.
It comes only days after 60% of BP shareholders rejected a pay package of around £14million for boss Bob Dudley at its AGM. Almost half of Anglo-American shareholders voted against the £3.4million pay deal for its chief executive Mark Cutifani earlier this week.
Addressing the AGM said Flint said: “Regulatory changes as well as responding to shareholder feedback have caused us to make some revision to our remuneration policy.”
On wider issues he warned that “important and unquantifiable risks” for its customers arise from a Brexit. “We believe that the UK would enter a period of great economic uncertainty in the event of a vote to leave and should the UK economy slow and economic conditions deteriorate as our research suggests, in at least the short to medium term, this would affect many of our customers in the UK and the economic environment we operate in. This is likely to have a negative impact on HSBC,” he said.
Regarding the furore around the Panama Papers tax scandal he added: “While there are lessons to be learned from the revelations, the circumstances alleged in the Panama Papers with regard to HSBC are largely historical, in some cases dating back 20 years, and so predate the tough financial crime, regulatory compliance and tax transparency standards which HSBC has put in place in recent years. We are moving steadily into a world of greater transparency and fuller disclosure, which we welcome.”