HSBC directors attacked in shareholder rebellion

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HSBC was hit by a rebellion over pay at yesterday's annual general meeting as its new chairman admitted the bank's performance was inadequate and apologised for last year's boardroom bust-up.

Almost one in five votes were cast against HSBC's remuneration report at the marathon meeting in London.

Shareholders bombarded Douglas Flint, chairing his first AGM, with questions about boardroom pay, the bank's financial performance and the bank's links to Libya.

Mr Flint told a shareholder: "There is nobody sitting here or standing here that would disagree with the proposition that total shareholder return over the last five years has been not only disappointing but inadequate."

Mr Flint replaced Stephen Green as chairman late last year and Stuart Gulliver took over as chief executive after a leak-ridden leadership race that saw Michael Geoghegan, the previous chief executive, forced out.

The remuneration report included a £5.2m bonus for Mr Gulliver and a £2.8m bonus for Mr Flint, who was finance director until December.

HSBC barely generated any total shareholder returns in the past five years while the FTSE 100 index yielded more than 25 per cent.

Mr Flint said he accepted shareholders' points about the level of boardroom pay and condemned "egregious" and "horrendous" examples in the US.

But he added: "It would be irresponsible to allow our comparative advantages to wither by ignoring the market forces that exist around compensation, even though we understand how sensitive the subject is."

Jonathan Cobb, of Standard Life Investments, told Mr Flint he was"dismayed by the manner and timing of the board changes".

Mr Flint said: "We were more than dismayed by the leaks that happened right towards the end of a process that had been going on for eight or nine months."

The near 19 per cent vote against the remuneration report followed similar revolts at Barclays and Lloyds Banking Group.

A document leaked to the campaign group Global Witness this week showed HSBC held £177m of funds from Libya's state investment fund. Mr Flint declined to comment on whether Colonel Gadaffi was a customer.