HSBC Reveals Pay of Top Earners

HSBC paid 204 of its staff more than £1m in 2012, a year when Britain's biggest bank made profits of $20.6bn (£13.7bn) despite being fined £1.2bn by the US authorities for helping Mexican drug barons launder money through the financial system.

At the start of a week in which Barclays and Royal Bank of Scotland are both expected to disclose the pay of their highest earners for the first time, HSBC disclosed that 78 of those who took home more than £1m were based in the UK.

To comply with UK rules which require banks to reveal the pay of the eight highest paid staff reporting to the chief executive, HSBC produced numbers showing they were handed between £7m and £2.3m. Hong Kong rules require the bank to reveal the pay of their highest paid staff regardless of whom they report to and this produced different numbers - the highest paid received up to £7.5m and the lowest up to £3.9m.

The bank's pre-tax profits for 2012 were $20.6bn, down 6% on 2011 and included $5.2bn caused by accounting rules requiring the bank to take account of the cost of buying back its own debt.

Chief executive Stuart Gulliver was awarded a near £2m annual bonus for his "strong leadership" and "personal behaviour" in tackling the revelations which caused the US authorities to fine the bank for helping drug traffickers launder money.

The bank produced a number of methods for disclosing his pay, including one total of £8.9m – which included his £1.2m a salary, a bonus of just under £2m, benefits of £1.2m as well as £5.6m of bonuses released to him from previous years.

He has been leading an effort to improve returns for shareholders and urged staff to demonstrate "courageous integrity". He has closed or disposed of 26 businesses and non-core investments in 2012 taking the total to 47 since beginning of 2011 when he was promoted from running the investment bank.

The bank's overall bonus pool was cut to take account of the US fine although, the bonus pool in the investment bank was still up slightly on 2011 at $1.3bn.

Chairman Douglas Flint said: "Banking has been given a huge wake-up call and we are determined to play our part in restoring its reputation and thereby regaining society's trust". The US fine had been "extremely damaging to HSBC's reputation" Flint said, saying the bank had already "apologised unreservedly" for the incident in its US and Mexican operations.

He also noted that UK government had increased the levy applied on the global balance sheets of UK-based banks which cost HBSC $571m, some of which $295m related to non-UK banking activity. He said this took $0.03 off the bank's dividend, which stood at $0.45 per share for 2012.

This bank levy and $2.3bn for customer redress – including PPI and swaps mis-selling - drove the UK arm of HSBC to a loss. HSBC shares were down nearly 3% in early trading.

Powered by article was written by Jill Treanor, for on Monday 4th March 2013 09.22 Europe/London © Guardian News and Media Limited 2010


image: © Howard Lake

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