Mis-selling scandal will see HSBC cut executives' bonuses
Senior executives at Britain's largest bank, HSBC, are set to lose out on thousands of pounds of bonus payments after a mis-selling scandal that cost the company £40m.
Managers are seeing their payouts reduced after the bank was fined £10.5m by the Financial Services Authority and ordered to pay £29.3m in compensation in December, following the revelation that it sold £300m of unsuitable bonds to elderly or disabled customers.
Under his contract, HSBC chief executive Stuart Gulliver could earn up to £12.5m in cash and shares. But the mis-selling affair is reportedly eating in to not only Mr Gulliver's personal bonus, but also the overall pool for payments for other employees. The news came as the company was preparing to announce its 2011 profits, expected to be as high as £14bn, as well as, for the first time, the pay of its top eight executives. A source indicated that the move to reduce bonus payments in acknowledgement of the scandal is a routine measure under the terms of staff contracts, though it is being viewed as an attempt to improve the bank's image in anticipation of further controversy surrounding bonus levels at British banks. The bank said last year that it was "profoundly sorry" for the mis-selling incident, which saw 2,485 customers of its subsidiary NHFA being advised to invest in the bonds, despite it later being revealed that 87 per cent of the sales – whose customers had an average age of 83 – were unsuitable.
The cuts come a week after Lloyds became the first British bank to demand that executives repay parts of their bonuses, clawing back £2m from 13 directors due to the mis-selling of £3.2bn in payment protection insurance. The HSBC cuts are likely to be less severe.
In its annual report, due out today, HSBC will be the first British bank to publicly document and explain the pay of its top eight executives. But the report may not offer details as to who has been hit by the cuts and by how much.
Gay couple beaten in park urge MPs to moderate language on gay marriage
Strewth mate. Aussies wave goodbye to Britain as it becomes too pricey to stay
World news in pictures
X marks the spot: The find that could rewrite Australian history
'There are empty spaces where there used to be living rooms, bedrooms, classrooms': President Barack Obama says America is praying for Oklahoma in wake of tornado that claimed 24 lives
- 1 'He was lucky he didn't die' - George Michael fell out of speeding car onto M1 motorway, according to eye witness
- 2 Tottenham to smash pay scale with £150,000-a-week contract in attempt to tie Gareth Bale to club
- 3 Austerity has hardened the nation's heart
- 4 Gay couple beaten in park urge MPs to moderate language on gay marriage
- 5 Why Arsène Wenger must spend to put icing on the cake and buy likes of Stevan Jovetic for Arsenal
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Win anything from gadgets to five-star holidays on our competitions and offers page.
iJobs Money & Business
£180 - £230 per day: Orgtel: Operations Analyst - Leading Bank in the City of ...
£500 per day: Orgtel: A top tier banking client urgently requires Finance Busi...
£425 - £550 per day: Orgtel: Senior Finance Project Manager - £550 - Bristol -...
£150 - £250 per day: Orgtel: KYC Analyst - London - Banking - £150-250/day C...