HSBC says bonus for chairman capped at 1 million pounds
London: Banking group HSBC Holdings Plc has attempted to head off investor criticism over a new pay plan, capping any share bonus for its Chairman Douglas Flint this year at 1 million pounds ($1.7 million) and saying it would be a one off.
Under new pay proposals set out in March, HSBC said it could have awarded Flint up to 2.25 million pounds worth of shares as an annual bonus in exceptional circumstances.
The bank had said in 2010, when the former finance director became chairman, he would be paid his salary but no bonus and some investors were concerned about the change in structure.
HSBC said it had met with investors ahead of its annual shareholder meeting on May 23 and had made adjustments to the plan.
Simon Robertson, chairman of the remuneration committee, said in a statement if any award was made this year to Flint it would reflect changes to his responsibilities since his original appointment when salaries were set.
"Any award would be made in recognition of the exceptional circumstances facing HSBC over the medium term of intense regulatory change, an increased focus on changing conduct and behavior and the implementation of enhanced banking standards," Robertson said.
He said the share bonus would be specific to Flint, and the bank did not intend to make such payments a feature of the chairman`s pay over the long-term.
Flint was paid 2.4 million pounds last year. Under the structure announced in March, he could have received 4.7 million pounds, but the maximum he can now get is 3.4 million.
HSBC, like many other banks, has changed its pay structure this year to meet new EU rules that cap bonuses at the level of their fixed pay, or double the amount with shareholder approval.
Rivals Standard Chartered Plc and Barclays Plc have faced significant opposition to their pay policies at recent shareholder meetings.