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.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Rick Cassidy, the chairman of Taiwan Semiconductor Manufacturing Co's (TSMC, 台積電) US subsidiary, TSMC Arizona Corp, plans to retire, but the company has yet to name a successor. After Cassidy made his intention to retire known, TSMC Arizona held a special general meeting and approved a resolution that Cassidy would not continue as chairman and would not remain as a director, TSMC said in a statement filed with the Taiwan Stock Exchange last night. The meeting also approved a plan to appoint TSMC Arizona president Rose Castanares as a director, the company said, adding that Cassidy has been named as an advisor
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
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