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£7.4m pay package for HSBC boss


HSBC is expected to announce pre-tax profits of £15.6 billion pounds

HSBC is expected to announce pre-tax profits of £15.6 billion pounds

PA Wire/Press Association Images

HSBC is expected to announce pre-tax profits of £15.6 billion pounds

HSBC revealed a £7.4 million pay package for boss Stuart Gulliver, after a year in which the banking giant racked up more massive profits.

Mr Gulliver said the bank had made significant progress in 2012, although its performance was marred by a record fine of 1.9 billion US dollars (£1.2 billion) to settle a US investigation into money-laundering,

Pre-tax profits fell 6% to 20.6 billion US dollars (£13.7 billion) but when excluding movement in the value of its debt, HSBC said underlying profits were up 18% to 16.4 billion US dollars (£10.9 billion).

Mr Gulliver, who took the helm in 2011 and has led an extensive overhaul of the business, received around half of his bonus entitlement, with the £2 million payment subject to clawback and not accessible until he retires or leaves HSBC.

The overall £7.4 million figure, which compares with £8 million a year earlier, includes his base salary of £1.25 million, around £1.2 million of benefits including pension entitlement, plus long-term share incentive awards worth £3 million. HSBC disclosed it paid 204 of its staff more than £1 million in the year, with 78 being based in the UK. TUC general secretary Frances O'Grady said: "The culture of entitlement is alive and well in the City. At a time when real wages are falling for the vast majority of people, the banking sector is continuing to hand out huge bonuses as if they were pocket change."

The banking group, which employs 270,000 people, makes an estimated 90% of its money outside Britain and has benefited from its exposure to emerging markets in Asia. There are 48,000 people in the UK business.

HSBC's record settlement with US regulators in December followed accusations it allowed rogue states and drug cartels to launder billions of pounds through its US arm. 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. The findings led to the resignation of head of compliance David Bagley. As well as the US penalties, it recorded an additional provision of 1.4 billion US dollars (£930 million) to cover compensation claims relating to the mis-selling of payment protection insurance interest rate swaps in the UK.

Mr Gulliver said: "HSBC made significant progress in 2012. First and foremost we grew our business. We increased revenues, performed well in most faster-growing markets and enjoyed a record year in commercial banking."

The lower-than-expected profit figure meant HSBC's shares were 3% lower, despite a 10% rise in its dividend for 2012.

Britain's biggest union Unite said the profits haul came just weeks after HSBC told 10,000 staff that it intends to close their final salary pension scheme to future accrual. Unite national officer Dominic Hook said: "Long-serving HSBC staff earning as little as £14,000 a year are having their pensions attacked while the bank announces astronomical profits. In an act of sheer pettiness the billion dollar bank is also snatching two days' holiday a year from its staff and cutting sick pay. The savings the bank is making from these changes are a drop in the ocean compared to its profits and the bonuses being awarded. HSBC can easily afford to provide decent pensions to all its staff."