HSBC shareholders vent anger at 'wildly excessive' pay

AN INVESTOR rebellion against HSBC's remuneration policy rocked the board at the bank's annual general meeting yesterday, with 20 per cent of shareholders refusing to back the plan.

However, Edinburgh-based Standard Life Investments (SLI), a long-term critic of HSBC's board remuneration, voted in favour of the new scheme subject to certain conditions, including it being reviewed no later than 2014.

The move came as shareholders criticised the bank for lacklustre financial returns, a subject that new chief executive Stuart Gulliver said recently he would address as he unveiled a new strategic plan.

There had been a similar backlash against HSBC's remuneration structure at last year's AGM, leading to a new pay format that limits "long-term incentive plan" share payouts to six times basic salary, down from seven times.

New measures include making staff hold on to share bonuses until they retire or leave the bank. But private shareholder Michael Mason-Mahon was one of those who criticised the largesse that could see Gulliver earn up to 12.5 million this year. "How greedy is this board of directors?", Mason-Mahon asked, as another investor called on HSBC to move away from "wildly excessive remuneration at board level".

Despite backing all the AGM resolutions, a representative of SLI asked the board to consider strenthening the roles of deputy chairman and senior independent director.

Jonathan Cobb, SLI's investment director for governance and stewardship, said afterwards: "In the past three years we have voted against the remuneration report at the AGM. This year we wanted to publicly mark that we support the efforts of HSBC to improve arrangements in this important area of company stewardship.

"We have also sought assurance on certain matters relating to board responsibility that we believe will improve the ability of non-executive directors to provide the appropriate degree of challenge to executive directors within the context of a unitary board."