Updated: Mon, 27 May 2013 17:05:55 GMT | By pa.press.net

Shareholders object to HSBC pay

HSBC has been rebuked by shareholders over huge pay packages in what the banking giant admitted was a "humbling and damaging" year.

About 11 per cent of shareholders rejected HSBC's remuneration report

About 11 per cent of shareholders rejected HSBC's remuneration report

HSBC has been rebuked by shareholders over huge pay packages in what the banking giant admitted was a "humbling and damaging" year.

About 11% of shareholders rejected its remuneration report after the bank gave its chief executive Stuart Gulliver a £7.4 million pay package in 2012, and paid 204 staff more than £1 million in the year.

It was fined a record 1.9 billion US dollars (£1.3 billion) last year after revelations that it allowed rogue states and drug cartels to launder billions of pounds through its US arm.

Chairman Douglas Flint said it was the most difficult year he had faced during 17 years with the bank and he was "humbled and horrified to discover failings of such magnitude".

The bank was taken to task by a Methodist minister from Evesham, Worcestershire, at its AGM in London. The Rev David Haslam said HSBC's pay deals dwarfed those of nurses, teachers, social workers and carers. He said: "There's still a very strong feeling that bankers pay themselves too much. Eight hundred and eighty million US dollars of drug money was laundered through HSBC in Mexico - so much so that cashiers' windows had to be widened to get the boxes of money through."

The bank was accused by the US senate of ignoring warnings and breaching safeguards that should have stopped the laundering of money from Mexico, Iran and Syria.

Mr Flint said: "One of the most humbling experiences anyone can have is to discover they are not as good as they think they are. The last two years have been extremely damaging to HSBC's reputation and to our own perception of ourselves. I want to take this opportunity to apologise again in person to you."

The bank faced an array of questions from shareholders over the fine, pay and clawback of bonuses from staff. One shareholder urged Mr Flint, the bank's former finance director, to stand down, and offered him an orange prison-style jumpsuit. He said: "No director has been sacked or resigned concerning the 10 years of illegal behaviour." However, all directors were re-elected at the meeting.

Mr Flint said the bank aims to become "bulletproof" over its compliance with standards to regain the public's trust and respect. Mr Flint said: "People often come together in adversity, learning lessons to help build a better, more secure future. I believe that's what has happened here." Chief executive Stuart Gulliver said: "We are doing everything we can to put right our past errors and strengthen the bank for the future."

Mr Flint defended pay at the bank as an important tool in attracting top staff, after a year when HSBC's underlying profits grew 18% to 16.4 billion US dollars (£10.8 billion). "The quality and commitment of our people is fundamental to our success. Our aim is to recruit those who are committed to maintaining a long-term career with this organisation." He added the 2012 bonus pool was reduced after the US fine and new clawback rules will give it the opportunity to reclaim bonuses from staff in future. "It's one of the most important regulatory changes that's been put in across the whole industry," said Mr Flint. All resolutions were passed at its AGM.

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