HSBC share price: Investors urged to reject pay plans and chair re-election

HSBC Holdings’ (LON:HSBA) shareholders should reject the bank’s executive pay plans and oppose the re-election of the group’s chair Douglas Flint, a leading shareholder advisory group has said. The comments come ahead of the blue-chip lender’s annual general meeting (AGM) next week.

HSBC’s share price has soared in today’s trading, having added 4.62 percent to 439.50p as of 09:35 BST, and outperforming the benchmark FTSE 100 index which currently stands 1.25 percent higher at 6,320.13 points. The group’s shares have lost nearly 30 percent of their value over the past year, and are down some 18 percent in the year-to-date.
The Guardian quoted Pensions & Investment Research Consultants (PIRC), which advises pension funds and others on how to vote at AGMs, as saying yesterday that it was concerned about the variable pay of HSBC’s chief executive Stuart Gulliver which exceeded 200 percent of his salary. The group further described his benefits package, worth 50 percent of salary, as ‘excessive and inappropriate’.

The shareholder advisory group also urged investors to vote against the re-election of HSBC’s chair Douglas Flint, arguing that his position is ‘untenable’ since he was finance director at a time when there were regulatory breaches for which the blue-chip lender was later fined.
“Pirc would expect such issues to require intense scrutiny by the board of the position of the finance director and the auditors,” the group said, as quoted by the Guardian. “Given this, it is considered that Mr Flint has failed in his responsibilities and his position is untenable.”
Flint, who has been the group’s chair since 2010, is planning to step down, with the board aiming to nominate a successor next year. The bank’s new chair is then expected to begin a search for a successor to chief executive Stuart Gulliver.
HSBC’s AGM is scheduled for April 22, to be followed by the bank’s first-quarter results on May 3.
As of 09:54 BST, Wednesday, 13 April, HSBC Holdings plc share price is 437.85p.