HSBC may have misled shareholders into believing the executive bonus scheme was much less generous than it really was, according to a QC’s opinion, commissioned by rebel shareholder Knight Vinke, who is campaigning for change at the bank.
In advertisements placed in The Times and other newspapers, Vinke accuses the bank of giving the impression to shareholders that the performance hurdles of the scheme were significantly more demanding than they really were.
Stephen Green, HSBC’s chairman; Mike Geoghegan, chief executive; Douglas Flint, finance director; and two retired executives will collect bonuses estimated at £5.8m because of the lax way the scheme rules were drawn up, Vinke said. Based on a literal interpretation of the scheme, as it was first presented to investors in 2005, executives could have been expected to receive nothing.
Lord Grabiner, QC, has advised Vinke HSBC may also have breached the Financial Services and Markets Act and the listing rules, The Times reports. He said the 2005 shareholder approval for the scheme was void and the bonuses could not be paid out without the bank returning to shareholders with a fuller explanation.
Further reading:
Q&A: HSBC's FD on the company's sub-prime turmoil
Awards 2007: Finance Director - Blue Chip (over £50m turnover)
Comments
Have your say on this article