More than one-fifth of HSBC’s shareholders opposed the bank’s pay policy on Friday in the latest show of anger that banks have not reined in bonuses enough in the wake of the financial crisis.
About 21 percent of investors who voted opposed HSBC’s vote on its pay policy for the next three years, not enough to block its plans, but representing significant opposition.
Pay is “wildly out of control,” said John Farmer, a private shareholder, at the bank’s annual meeting on Friday. “You are not as a bank delivering an impressive return. Please would you go away and rethink the issue totally.”
He rejected the bank’s claim that staff would leave if they were not paid as much as at rivals.
“If these people want to walk away, let them, and find someone else who will do the job for them,” Farmer said to applause from other investors.
Bankers’ pay is a politically sensitive issue due to public anger over bonuses paid to those seen by some as partly to blame for the 2008 to 2009 financial crisis.
HSBC, Europe’s biggest bank, defended its pay and changes to structure that mean more pay is now in shares and deferred for five years, and can be clawed back if problems are spotted at a later date.
“We look very carefully outside at what’s being paid. We pay way under what the American banks pay ... we have to be careful not to destroy the business from which you get profits and dividends,” HSBC remuneration committee chairman Simon Robertson said.
HSBC attempted to take the sting out of pay criticism last week by saying it would cap any bonus paid to its chairman Douglas Flint at ￡1 million (US$1.7 million), after criticism from investors about a plan to pay him a bonus of up to ￡2.25 million.