HSBC stops bonuses for top directors

HSBC’s top directors saw their overall pay packets plunge last year after bonus payouts for 2008 were axed, the bank’s annual report shows.

Chief executive Michael Geoghegan’s package fell from £3.54m (€3.94m) to £1.67m (€1.86m), while chairman Stephen Green’s overall compensation fell by almost two-thirds to £1.27m (€1.41m).

The bank is not awarding any share-based compensation based on last year’s performance, and the bank’s executive directors have also asked not to be considered for any cash bonuses.

Despite HSBC’s better performance in relation to its struggling rivals, the executive directors took the decision “in view of general conditions in financial markets”.

Executive salaries have also been frozen for 2009 – although with Mr Geoghegan and Mr Green currently on £1.07m (€1.19m) and £1.25m (€1.4m) respectively, this is unlikely to sting too much.

Mr Green – who waived his right to a cash bonus in 2007 – today said the banking industry must respond to calls for “a more sober and reasonable approach” to compensation.

He said: “We are committed to the principle of sensible market-related pay, structured to align executive actions with long-term shareholder interests.

“A small number of individuals in a market system will inevitably receive compensation that is high in absolute terms, but this must be genuinely linked to long-term shareholder interests.”