James Moore: Precious little humility from those at the top despite banks' misdeeds

Outlook. Plus: Swiss show the way and block an escape route

What would it take for a banking executive to not be awarded a bonus, as opposed to voluntarily forgoing a payout, as only Antony Jenkins at Barclays did this year?

It is a question worth asking now that the reporting season has been brought to a close by HSBC, which handed a £2m annual payout and all sorts of other sweeties to its chief executive, Stuart Gulliver.

HSBC, you may remember, was fined a record £1.2bn last year by United States regulators, who charged it with acting as a conduit for Mexican drug money and assisting with sanctions busting on behalf of the murderous regime in Iran.

Before answering the question, let's step back a moment.

HSBC failed to live up to the City's expectations for its profits last year, it is true. But the bank still made an awful lot of money and increased its dividend by 11 per cent. It was the only British-based bank, in fact, to pay more to shareholders who put their money at risk to enable banks to conduct their activities than it paid to its staff.

HSBC also paid a substantial amount of corporation tax, gave the oft-voiced threat to relocate its headquarters away from the UK a rest (a decision on location is apparently on indefinite hold) and performed some socially useful functions.

One notable endeavour was a £5bn fund set up to help UK businesses wanting to export to the Far East, which is just the sort of thing banks ought to be doing, but too rarely do. A look at the best buy tables will even show that it has some very competitive mortgage deals on offer.

All well and good. But that fine puts a tarnish over everything HSBC has done. Sanctions busting and drug money. That bears repeating, again and again.

The arguments for paying up this year go something like this: the team at the top of HSBC weren't responsible and are doing their best to sort out the mess. And of course, they're the Lionel Messis or the Pelés (for those of a more mature vintage) of the business world with rivals beating a path to their doors (even though the executive transfer market is as quiet as it has ever been).

Funnily enough, those same arguments were advanced about their predecessors, and about the former bosses at other banks who were in charge when the current sink hole full of scandals were in their most active phases.

Ah, but now we have clawback! For the first time institutions will be able to withhold some of the bonus money if things go bad.

Excuse me for being cynical, but given the industry's record I have a degree of scepticism about how willing boards will be to push the button should problems emerge in future. After all, while banking executives have been quick to take credit for improvements they have been even quicker to disavow any responsibility for anything that has gone wrong.

Which leads us back to that fine. So gross were HSBC's misdeeds that they warranted a gesture from its leaders, an acknowledgement that this and the other problems the bank has been through (US subprime loans anyone?) merited some humility from those at the top beyond the standard sotto voce expressions of regret.

They merited leadership. Sadly, there was precious little of that in evidence yesterday, just as there was precious little from Royal Bank of Scotland or Lloyds Banking Group.

It's true that in banking the tune has changed a bit. Given the public's fury at what has been going on in the City, it had to. But the song remains the same.

Swiss show the way and block an escape route

Has the entire nation of Switzerland suddenly started subscribing to Pirc's shareholder voting advice service?

You'd think so given the outcome of its referendum on boardroom pay.

A majority in every canton, and more than two thirds in total, backed the sort of curbs that have produced howls of protest from the business lobby in this country, combined with dark threats of quitting these shores for more "favourable" business climes. Such as, say, Switzerland.

Where, in addition to a mandatory vote that will allow shareholders to block executive packages, there will be no more golden hellos or excessive pay-offs for the bosses of public companies listed there or for Swiss companies listed overseas.

The multimillion-pound bung paid to Marc Bolland before he joined Marks & Spencer would be outlawed under the scheme.

The usually conservative burghers of Switzerland have had enough. Well, this is the country that has had to pay up for UBS, and that's just your starter for ten.

It's worth noting here that the plan was put together by a businessman, although to make it truly effective it would still require shareholders to do more than they have so far proved capable of doing.

There is a message here, in the Swiss plan and the European Union's even more controversial scheme to limit bonuses at banks to no more than 100 per cent of salary, or perhaps twice that if a super-majority of shareholders approve.

Politicians have little choice but to act when faced with the outrage of voters who have suffered severe pain from the excesses of banking and find it inexplicable that executives generally award themselves enormous pay rises when their workers are squeezed.

The fact that the reforms in this country have been so half-hearted is part of the reason for the disillusionment with politicians here.

As for the threats by executives to quit? Well, there are countries where they don't have pesky things like democracy. But suggesting you'll depart for corrupt places where you won't have to put up with complaints or votes probably won't go down too well.

Start your day with The Independent, sign up for daily news emails
News
The two faces revealed by the ultraviolet light
newsScholars left shaken after shining ultraviolet light on 500-year-old Welsh manuscript
News
Rosamund Pike played Bond girld Miranda Frost, who died in Die Another Day (PA)
news
Arts and Entertainment
books
News
newsHow do you get your party leader to embrace a message and then stick to it? With people like this
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Loren Hughes: Financial Accountant

£45,000 - £55,000: Loren Hughes: Are you looking for a new opportunity that wi...

Sheridan Maine: Finance Analyst

Circa £45,000-£50,000 + benefits: Sheridan Maine: Are you a newly qualified ac...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat