HSBC execs should be denied bonuses

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

story in The Times

Related reading