HSBC's new bonus plans face vote
Banking giant HSBC has announced plans to reduce maximum bonuses for top bosses, but revealed its chief executive would still be in line for a package worth up to £12.5 million this year.
The group unveiled a raft of new measures it claims will reduce total potential remuneration following a near year-long review.
HSBC suffered a shareholder protest at last year's annual meeting when nearly one in four investor votes failed to back its pay report.
Under the proposals, which will be put to the vote at next month's AGM, HSBC wants to cut the maximum payout for its long-term bonus plan from seven times salary to six and trim annual bonus payouts from up to four times salary to three.
Shares awarded under its long-term scheme will also be deferred over five years, up from three, while directors will have to hold on to the shares once vested until they retire or leave the bank.
However, the plans would still see boss Stuart Gulliver entitled to a potentially mammoth pay deal this year.
On top of his £1.25 million salary, he could earn up to £7.5 million in long-term bonus shares, plus a possible £3.75 million annual bonus.
HSBC claims this is £2.5 million less than under its current scheme. But it is thought not all of HSBC's shareholders are convinced by the changes being made, with concerns reportedly focusing on how long-term bonus shares are granted.
While they will be subject to clawbacks set against performance targets each year, there are said to be concerns that the shares are awarded at a set amount rather than a notional maximum that is subject to performance criteria that will determine the actual payout on vesting.
HSBC said: "We believe these proposals will lead the way on better alignment of employee incentivisation with strategy and long-term sustainable value creation for shareholders."