‘Shareholder spring’ continues with bid to block election of HSBC chairman

ADVISORY body PIRC is calling on investors to oppose the re-election of HSBC chairman Douglas Flint at the banking group’s annual meeting on Friday in a further sign that the ‘shareholder spring’ is set to continue.

Corporate governance group Pensions and Investment Research Consultants (PIRC) cited Flint’s executive capacity as “an obstacle to independence” and noted his role in setting accounting standards that “fail to give a true and fair view” of HSBC’s performance.

“Further, the acquisition of HFC, whilst he was finance director, involved a substantially overvalued balance sheet due to problems with the accounting standards,” PIRC said.

The group is also recommending that shareholders vote against the remuneration report at HSBC, whose chief executive Stuart Gulliver is in line for a pay package worth nearly £8 million. The bank’s bonus scheme has drawn criticism from unions representing staff at HSBC, who are facing the loss of more than 2,000 UK jobs as part of a global drive to cut costs and boost profits.

Aviva and Cairn Energy are among the companies which have seen their remuneration plans defeated in recent weeks amid a backlash of shareholder fury. However, it is understood that the Association of British Insurers has not flagged up any major points of concern at HSBC, making an all-out revolt unlikely.

Other issues set to dominate the HSBC gathering will centre on the bank’s on-going commitment to the UK.

The company – which has touted the possibility of taking its headquarters out of London for more than a year – sounded the alarm on the future of its broader UK business at its annual investors’ day last week. Referring to government proposals to ring-fence retail banking from other commercial activities, Gulliver said the bank would run its “five filters” test of financial and economic performance over the resulting operations.

Both would be required to meet certain targets or face the prospect of a sell-off.

Also coming under the microscope on Friday is Standard Life, which will ask shareholders at its AGM in Edinburgh to approve a package that saw two of its top directors break through the £2m pay barrier last year.

David Nish, chief executive of the life assurer, received total remuneration of £2.04m in 2011, an increase of 3.6 per cent. Keith Skeoch, head of asset management arm Standard Life Investments, saw his total pay rise by nearly 7 per cent to £2m.

The remuneration vote could prove particularly uncomfortable for Standard Life, whose £155 billion fund management arm has been at the forefront of a number of recent shareholder rebellions against pay at other companies.

Though the company turned in a strong first quarter performance, many have suggested that it should be doing better. Last year, more than 21 per cent of Standard Life’s shareholders refused to back the company’s remuneration scheme.