HSBC suffered an embarrassing 11% shareholder rebellion against its executive pay report on Friday.
Douglas Flint, chairman of the bank, said just 89% of investors voting ahead of its annual meeting supported its pay scheme, which handed chief executive Stuart Gulliver a near £2m annual bonus despite the bank's involvement in a string of high profile scandals, including helping Mexican drug barons launder money.
The bank said Gulliver's bonus was awarded in recognition of his "strong leadership" and "personal behaviour" in tackling the revelations that led to the bank being fined £1.2bn by US authorities for allowing at least $880m (£582m) of drug trafficking money to be laundered throughout the bank's accounts.
Gulliver's total pay and benefits for 2012 came in at £7.4m - more than 500 times that earned by the bank's lowest paid workers.
A total of 204 HSBC staff collected more than £1m in pay and benefits last year.
Britain's biggest union, Unite, described the scale of the pay as an "outrage" given that some of its members at HSBC take home £14,000 a year and are facing changes to their pension schemes and holidays.
The bank did not immediately state how many of its investors abstained from the pay vote, which could increase the proportion of shareholders failing to back the remuneration report. It will report the full numbers to the London stock exchange this afternoon.
Earlier on at the AGM in the Barbican centre, in central London, Flint apologised to shareholders for the bank's role in a series of "extremely damaging" scandals, including rigging the Libor interest rate, PPI mis-selling and money laundering for Mexican drug cartels and terrorists.
Flint said the bank had already "apologised unreservedly" to stakeholders and has paid "huge penalties both in monetary cost and reputational damage". But said he wanted to "apologise again in person".
"As you will all be acutely aware, the last two years have been extremely damaging to HSBC's reputation and to our own perception of ourselves," he said. "We experienced serious historical failings both in the application of our standards and in our ability to identify, and so prevent, misuse and abuse of the financial system through our networks."
He said the bank had been given a "huge wake-up call" and HSBC was "determined to play a leading part in restoring the reputation of the industry and thereby regaining society's trust".
"We need to prove that a strong economy needs a strong banking sector," he said. "More important than apologies, however, are the steps being taken to prevent recurrence.
"We have a once-in-a-generation opportunity to reform banking and the broader financial industry.
"We need to demonstrate that the business model of banking is fair, transparent, sustainable and meeting its core purpose of serving society."
The bank has created a new financial system vulnerabilities committee of five experts to "identify areas where HSBC may become exposed to financial crime or system abuse".
"Their expertise includes the combating of organised crime, terrorist financing, narcotics trafficking, tax evasion and money laundering as well as expertise in intelligence gathering and international payments systems," Flint said.
The bank agreed in December last year to pay a $1.9bn fine to US authorities to settle money laundering charges, but the deal has been delayed by a row between the justice department and the judge overseeing the case.
The deal – known as a deferred prosecution agreement (DPA) – meant HSBC was exempt from prosecution and triggered a storm of criticism. Judge John Gleeson is now believed to be considering rejecting the deal, a move that could leave HSBC facing a criminal prosecution and the threat that its charter to do business in the US could be revoked.
US authorities reached the deal with HSBC last December after uncovering evidence that the bank had illegally conducted transactions on behalf of Mexican drug lords, terrorists and customers in Cuba, Iran, Libya, Sudan and Burma – all countries that were subject to US sanctions.
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