The bank suffered a rebellion by 22.6% of investors over its pay policy yesterday, an embarrassment for a company whose chairman Stephen Green was an early, vocal advocate of salary reform in financial services.
HSBC said yesterday that many shareholders chose to abstain as they waited for non-executive director John Thornton, who is to become chairman of its remuneration committee, to lead a review of its pay practices this summer.
Guy Jubb, head of corporate governance at Standard Life Investments (SLI) told HSBC’s annual meeting in London it would oppose HSBC’s pay report for the third year running.
He said: “Despite our clear communication of our concerns, the bank has not been a listening one.”
Jubb alluded to a reported attempt by the bank to increase chief executive Michael Geoghegan’s £1.1 million basic salary by a third, which foundered after investor opposition. Geoghegan gave his £4m bonus for 2009 to charity.
HSBC said yesterday that many shareholders chose to abstain as they waited for non-executive director John Thornton, who is to become chairman of its remuneration committee, to lead a review of its pay practices this summer.
Guy Jubb, head of corporate governance at Standard Life Investments (SLI) told HSBC’s annual meeting in London it would oppose HSBC’s pay report for the third year running.
He said: “Despite our clear communication of our concerns, the bank has not been a listening one.”
Jubb alluded to a reported attempt by the bank to increase chief executive Michael Geoghegan’s £1.1 million basic salary by a third, which foundered after investor opposition. Geoghegan gave his £4m bonus for 2009 to charity.
He said emerging markets are increasingly driving economic growth and globalisation is “here to stay”. “Our policy makers must remain pragmatic and we must avoid protectionism,” he said. Green said HSBC would engage with a Government commission set up to look at breaking up banks into their retail and investment banking arms.
Green, whose company contains both type of business, said: “We will be making a strong case that HSBC’s business model not only works in a sustainable way but also plays a vital role in helping businesses realise their full potential.” He reiterated his call for policymakers to be given tools so they can “dilute or takeaway the dog bowl” if credit flows head too much into one area. Green said HSBC, which is quoted on the London and Hong Kong stock exchanges, would pursue a Shanghai listing when the authorities are ready.
