LONDON // HSBC has shelved plans to award its chief executive a pay rise of more than a third after shareholders rejected the proposals amid concerns of a rising backlash over banker pay. The London-based bank has been discussing with investors increasing base pay for its top executives in the past two weeks, shareholders have told Reuters. The bank was proposing increasing the chief executive Michael Geoghegan's pay by about one-third from £1.1 million. The remuneration committee met earlier this week, and details will be unveiled with its 2009 results on Monday.
A spokesman for the bank declined to comment on what executives will be paid, but said it was not uncommon to discuss the matter of pay with investors. "It's not unusual to update shareholders on the subject of remuneration. The FSA has confirmed that the bank's policy is fully compliant with its Remuneration Code," the spokesman said. HSBC was also considering increasing the pay of its finance director, Douglas Flint to £900,000, the Financial Times said.
Pressure has built on the bank to reign in financial rewards for top staff following the decisions by chief executives of UK banks to waive their bonuses in recent weeks. In the last week chief executives at Barclays and Lloyds Banking Group have all said they will forgo their bonuses for 2009 as anger over "fat cat" banker pay has become a major political issue in the run up to an election expected in May.