HSBC boss Stuart Gulliver admitted to the bank's shame over its Swiss tax scandal today as it disclosed profits slumped by 17% last year.
Mr Gulliver, who was not in charge at the time of allegations that HSBC's Swiss unit helped wealthy customers dodge taxes, received pay and bonuses of £7.6 million last year despite the fall to 18.7 billion US dollars (£12.1 billion).
His bonus was cut by £500,000 for last year because of control failures relating to HSBC's fine for foreign exchange rigging and his pay-out for 2013 was subject to the claw back of £1.25 million for the same reason.
Mr Gulliver, who became chief executive in 2011 and joined the board in 2008, was dragged into the ongoing tax furore following the disclosure that he had a bank account in Switzerland to hold bonus payments.
He said the bank account was set up in the name of a Panama-based company in order to prevent HSBC staff i n Hong Kong and Switzerland from knowing how much he was paid in the 1990s. The a ccount has since been closed as his pay is now disclosed to shareholders.
Mr Gulliver, who left the UK in the 1980s and has been domiciled in Hong Kong since then, said he has never paid below the highest rate of UK tax on all his earnings.
However, he reiterated the bank's regret over the conduct and compliance of its Swiss private banking arm and said that the practices were a "source of shame and reputational damage" for the banking giant.
HSBC chairman Douglas Flint, who is due to give evidence to MPs on the Treasury select committee later this week, said the bank needed to reinforce controls and demonstrate their effectiveness.
He added that it was unreasonable to penalise Mr Gulliver because the events in Switzerland happened before he was boss.
However, Mr Gulliver's total pay package is down from £8 million last year as a result of the bank's £216 million fine from the Financial Conduct Authority for its failure to prevent the rigging of foreign exchange operations.
Today's annual report disclosed that 320 senior staff still received more than one million euros (£736,000) in 2014.
Mr Gulliver admitted that it had been a challenging year, with profits down due to a number of one-off factors including the settlement of regulatory fines.
He added: "Profits disappointed, although a tough fourth quarter masked some of the progress made over the preceding three quarters.
"Many of the challenging aspects of the fourth-quarter results were common to the industry as a whole."
Mr Gulliver denied that the firm is now too big to manage and pointed to a streamlining aimed at addressing concerns that its culture had become diluted by a jump in headcount of 200,000 between 1 998 and 2007.
Investec analyst Ian Gordon said the bank's performance in the final quarter of last year was "very weak", with profits of 1.7 billion US dollars (£1.1 billion) against his forecast of 3.9 billion US dollars (£2.5 billion).
He added: " For all the recent media furore around potential conduct issues, it is the 'underlying' performance which, we believe, should be the greatest cause of investor concern - right across revenues, costs and impairments."