HSBC share price: Bank set to revamp pay policy
HSBC Holdings (LON:HSBA) is set to revamp its pay policy for executive directors in response to shareholder concerns. The proposal was unveiled during the group’s annual general meeting (AGM) today when Europe’s biggest bank also warned of the impact of a potential Brexit on its operations.
HSBC’s share price has fallen into the red in today’s session, having lost 1.38 percent to 465.40p as of 13:11 BST. The decline is part of a broader market selloff which has seen the blue-chip FTSE 100 index shed 1.22 percent to 6,303.60 points so far in today’s session.
HSBC chairman Douglas Flint told the bank’s shareholders today that the group was proposing to reduce the maximum amount its executive directors could earn by seven percent.
“We had expected that the Remuneration Policy you approved back in 2014 would not need to be refreshed until it expired next year,” Flint said in an AGM statement. “However regulatory changes as well as responding to shareholder feedback have caused us to make some revisions.”
The overhaul of HSBC’s pay plans follows shareholder revolts at the annual meetings of blue-chips BP (LON:BP) and Anglo American (LON:AAL).
The group’s chief executive Stuart Gulliver meanwhile moved to assuage investors’ dividend concerns, noting that the bank remained “committed to a progressive dividend, subject to the overall long-term profitability of the Group and the further release of less efficiently deployed capital”.
HSBC, which earlier this year decided to remain headquartered in the UK following a review of its domicile, also commented on the potential Brexit, cautioning that it might be forced to restructure its wholesale operations in the UK if the country voted to leave the EU.
“Our own economic research is very clear about the advantages of Britain being at the heart of a reformed EU,” HSBC pointed out, adding that it believed that the country would “enter a period of great economic uncertainty in the event of a vote to leave”.
HSBC’s AGM comes ahead of the lender’s first-quarter results on May 3.
As of 13:51 BST, Friday, 22 April, HSBC Holdings plc share price is 465.63p.