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10% vote against HSBC pay report

 

Jamie Grierson
Friday 25 May 2012 15:37 BST
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More than 10 per cent of shareholder votes went against HSBC's pay report at its annual meeting today after the banking giant's boss took home £7.5 million in pay and bonuses last year.

Chief executive Stuart Gulliver took a 14 per cent pay cut in 2011, after earning £8.4 million in pay in 2010 when he was in charge of the investment banking division.

But 10.1 per cent of investor votes went against HSBC's remuneration report following criticism from shareholder body Pensions & Investment Research Consultants (Pirc).

However, this is down on the near 19 per cent of shareholder votes that went against the 2010 pay report.

HSBC chairman Douglas Flint alluded to pay earlier in the meeting and appeared to defend the bank's high rewards.

He said: "We continued to develop a truly meritocratic culture because as international competition for the best talent intensifies, we need to ensure that HSBC is making the most of the skills and abilities of our people and encouraging them to reach their full potential."

The group, which reported a 15 per cent rise in profits to £13.8 billion in 2011 but saw its share price slide 23 per cent, is the latest company to be stung by shareholders following discontent over pay.

Last month, rival Barclays saw 27 per cent of votes go against its pay report amid anger over chief executive Bob Diamond's hefty payout.

In its alert note, Pirc advised members to vote against the remuneration report.

It said: "It is not clear, in the remuneration report, why a bigger emphasis was made on rewarding the chief executive for still being employed after a few years, rather than for leading the bank to outperform."

The so-called "shareholder spring" that has rocked boardrooms over recent weeks has been driven by anger that huge salaries and even bigger bonuses are out of kilter with falling share prices and pressure on profits.

Business Secretary Vince Cable and his department have finished a consultation on binding shareholder votes, which would mean pay deals require the support of 75 per cent of votes, and will update on progress next month.

PA

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