HSBC criticised over pay by Standard Life Investments

2 June 2010

Standard Life Investments (SLI), one of HSBC’s largest shareholders, has criticised the bank over its payment policies for top executives.

According to SLI, the pay practices for senior members of the bank were “unacceptable”.

The firm, which is one of the largest investors in the bank, was among 22.6 per cent of shareholders who voted against HSBC’s remuneration policy.

Criticism was levelled at the institution over its decision to award Michael Geoghegan, the bank’s chief executive officer, with a bonus of more than £4 million and a relocation fee of a further £800,000 following his move to Hong Kong.

Although HSBC’s CEO later donated the former figure to charity, the decision to pay Stuart Gulliver, HSBC’s head of investment banking, a £9 million bonus was also attacked by shareholders.

Guy Jubb, head of corporate governance at SLI, said: “Despite our clear communication of concerns, the bank has not been listening.”

He was quoted by the Daily Telegraph as saying: “The independent non-executive directors have stated their unanimous resolve to bring remuneration, including the group chief executive's salary, to internationally competitive levels within a year. We urge them to carefully reflect on their position.”

John Thornton, chairman of the bank’s remuneration committee, has been tasked with undertaking a review into HSBC’s payment practices.

By Jim Ottewill

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