Top Firm Told To Amend Pay Plan Or Face Revolt

HSBC Canary Wharf

The Telegraph reports that The Association of British Insurers (ABI) is said to have told HSBC's Remuneration Committee Chairman John Thornton that some investors remain 'unhappy' with a new executive compensation plan that could mean that bank group CEO Stuart Gulliver walks off with a $20m pay package for 2011.

According to the newspaper, Thornton was called to the ABI's offices on Friday and warned that he may have to institute changes or face a revolt at the bank's May AGM.

A spokesperson for HSBC said, however, that the new compensation scheme remained a work-in-progress, and that the bank was still in the consultative phase of the review.

In the meantime, The Wall Street Journal's Heard On The Street column reports that in 2010 Northern Trust's executives missed their four key performance measures which would trigger decent incentive-based exec pay awards by 'a country mile'. Yet the board has still decided to recommended that the executives bag bonuses of between 80% - 88% of their 'target level awards'.

One banker told us: 'This kind of defeats the objective of having a performance-based pay scheme. Where's the incentive to perform if executives can achieve nowhere near what was expected of them, yet still walk off with payouts of almost 90% of the incentive pay on offer ?'.

Finally, Bloomberg reports that The European Banking Authority (EBA) is said to be reviewing this year's banker bonus awards following criticism of the payouts received by some bank executives.

The news agency says that, according to its sources, the EBA 'will check whether capital rules curbing bonuses were properly implemented by national supervisors, including the U.K. Financial Services Authority....(and)...could force authorities to explain why bonus rules weren’t implemented or propose rules that would apply in all 27 EU-member states'.

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