HSBC chief set to brave critics and accept his bonus
James Moore is the Independent's Associate Business Editor and writes the Outlook City comment column from Tuesday to Friday. He also has a keen interest in disability issues and when not attempting to further injure himself playing wheelchair basketball.
Sunday 26 February 2012
HSBC's chief executive, Stuart Gulliver, will tomorrow bring an end to the recent trend of banking bosses passing on their bonuses.
The bank will give full details of Mr Gulliver's 2011 pay package alongside its results, which are expected to show a full year pre-tax profit of just over £14bn.
Unlike other banks, HSBC publishes its annual report containing details of its executives' pay and benefits alongside its final results.
Mr Gulliver's package is worth a maximum of £12.5m made up of a £1.25m base salary plus an annual bonus of up to £3.75m and a further £7.5m that could be earned through a long-term incentive plan.
Mr Gulliver's base salary has increased by 13.6 per cent, although his potential bonus package has been scaled down from a maximum payment of £4.4m and the annual incentive scheme from £7.7m. He could have earned up to £13.2m through this package.
The bank says it consulted "widely" on this, although nearly 14 per cent of shareholders failed to back its remuneration report at its last annual meeting – a significant minority.
Last year, Mr Gulliver chose to take his entire annual bonus in shares and may repeat that this year. His decision will be closely watched, with a further controversy looming over the award made to Bob Diamond at Barclays. He is expected to receive a £3m award, but Barclays refused to comment on its executives' pay at its recent results.
Neither HSBC nor Barclays received any direct aid from the taxpayer during the financial crisis, in contrast to Lloyds and Royal Bank of Scotland. Their chief executives, Antonio Horta-Osorio and Stephen Hester, respectively, both refused their bonuses this year.
HSBC made its first ever profit warning in the run-up to the financial crisis due to its troubled US arm's involvement in sub-prime mortgages. But it weathered the storm better than most, thanks to its presence in the fast growing economies of Asia.
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