HSBC is to appoint its next chairman from outside its existing management team in a move that would represent a dramatic change to the way Britain’s biggest bank is run.
The pledge was made even before the current scrutiny the bank’s board is facing following revelations in the Guardian - and by other news outlets - about the way its Swiss banking arm was helping customers avoid tax in 2005 and 2007. Those reports about HSBC’s private bank have ignited a political storm and forced the bank’s chairman Douglas Flint to appear before the Treasury select committee of MPs last week, alongside the chief executive Stuart Gulliver.
Flint was named chairman in 2010 and there is no suggestion he is poised to leave the bank. He was promoted from finance director in the heat of a bitter boardroom battle that led to Gulliver’s elevation from head of the investment bank. The move was backed by shareholders even though it is unusual for the chairman of a major company to have held an executive position there in the past. HSBC also had a convention of elevating its chief executives to become chairmen.
The bank said: “In discussions with leading shareholders consulted in the process through which Douglas Flint was appointed chairman in 2010, it was indicated that the board would ensure that there were eligible non-executive candidates in place for consideration ahead of the next succession. It was acknowledged that shareholder expectation was for the next chairman to be non-executive.”
The way HSBC’s Swiss bank operated has been exposed at a sensitive time, just weeks before the general election and in the midst of the annual bonus season for banks. Gulliver received £7.6m in 2014, HSBC said last week.
Further details of bankers’ pay deals will be published this week when Barclays and Royal Bank of Scotland disclose how much they paid out in 2014. RBS is braced for scrutiny of its pay deals following last year’s £400m fine for rigging foreign exchange markets and because of outstanding payments that were promised to chief executive Stephen Hester when he left in 2013.
Hester stood to receive up to £4m of shares through past awards of long-term incentive plans over three years, the first details of which will be published on Friday. The 79% taxpayer owned bank will also publish how many of its staff were paid £1m ore more and outline share awards for its top management team.
The payments will come in the midst of a clamp down by the European Banking Authority, the pan-European banking regulator, on the top-up payments handed to top bankers following the EU bonus cap. The EBA has already said these payments - known as allowances - are breaching the ratio set out by the EU for bonuses to be no more than one times salary, unless shareholders approve payouts of two times salary.
This article was written by Jill Treanor, for theguardian.com on Sunday 1st March 2015 16.11 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010