Odd one this. Most complaints about pay relate to the size of a fat cat’s
salary. But Eric Knight, of Knight Vinke, is more concerned about proper
disclosure. Can’t blame him for that. Though I can’t help feeling that if Flint
really has sorted out the sub-prime crisis HSBC found itself in, he is worth
every penny to the investors. The FD of another high street bank I sat next to
at a dinner recently told me that, despite everything, HSBC was a terrific
business and rated Flint very highly indeed.
Still, executive pay needs to be properly disclosed, whoever the executive
happens to be. It’s a basic tenet of corporate governance and a key
responsibility to investors anxious to know what they are paying for their
Now, to be honest, I don’t know whether Knight’s complaints are justified.
But whether they are or not, they present a very unflattering view of HSBC’s
executives to the public. And here’s why. Flint also happened to chair the
review of the Turnball guidance on internal controls, on behalf of the Financial
Reporting Council, and has also served on the Accounting Standards Board. These
roles have placed him at the forefront of decision making on corporate
governance and quality accounting. If anyone knows how to disclose remuneration
properly, he should.
Which is what makes Knight’s critique so biting and no doubt caused Flint
some considerable discomfort. How do you lecture everyone else on governance
while being accused of inadequate disclosure yourself? Tough one. I certainly
wouldn’t like to be in Flint’s shoes.
Gavin Hinks is editor of Accountancy Age