Sunday 20 May 2018

HSBC urges regulators to speed up reforms

London, May 25, 2013

HSBC called on regulators to speed up industry reform as its shareholders urged Europe's biggest bank to take a lead in cutting pay and criticised it for compliance failings and aiding tax avoidance.

HSBC chairman Douglas Flint told around 400 shareholders at the bank's annual meeting that the fallout from recent scandals had created a "once-in-a-generation" opportunity to reform banking and the broader financial industry.

"As a first priority we need to speed up the reform process. Otherwise investor confidence in the sector will continue to be undermined," he said.

Investors approved its 2012 pay plan, with 11 per cent of shareholders voting against it, compared with 10 per cent at last year's meeting. Including abstentions, 14.7 per cent of shareholders this year failed to back the plan.

"I'd like to see an immediate end to any increase in pay and a reduction in bonuses, which are totally disproportionate to what is delivered," said private shareholder David Haslam.

He said it was an industry problem, rather than specific to HSBC, but added the bank should lead the way in pay reform.

Chief executive Stuart Gulliver was paid £7.4 million ($11 million) last year, down from £8 million for 2011. The bank paid 204 employees more than £1m last year, including 78 in Britain.

Flint apologised to shareholders for the bank's failings after it was handed fines of $1.9 billion in December, the largest ever imposed on a bank, following a US investigation into its Mexican and US operations.

The probe made scathing criticism of HSBC's anti-money-laundering systems and found its lax controls allowed two drug cartels to move $881 million through the bank.

"We were humbled and horrified to discover findings of such magnitude," said Flint.

The settlement included a deferred prosecution agreement (DPA), meaning the bank's operations would be monitored but it remains exempt from prosecution unless it transgresses again.-Reuters

Tags: HSBC | reforms |


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