 Shareholders expressed their strong views regarding HSBC’s acquisition and management of the now named HFC, its US consumer finance operation. They were also critical of the senior executives’ current and planned remuneration.
Shareholder comments included : “..near disaster in America – who has suffered as a result of this £5.5 billion in losses – I challenge the CEO on integrity – with Household you have bought a puppy that has grown up with distemper – how long do we have to put up with paying you this sort of money to lose this sort of money? – eight of you taking in excess of US$ 72 million this year , shame on you, shame on you – it’s galling as a shareholder to see the business taking all these provisions - a US 100 billion problem - you glossed over a pathetic TSR underperformance – when will this enormous Board – who is responsible for that fiasco? – it is absolute nonsense – how dare you!”
But it wasn’t just the shareholders who were emotional. Various members of the Board responded with “…frankly you’ve got the wrong end of the stick – it is utter nonsense – it’s nonsense – you have made an extraordinary misrepresentation – very, very misinterpreted – this is a very false comparison.” The final comment from the HSBC Chairman to shareholders sounded very Alan Sugarish when he attempted to clarify the words of Sir Mark Moody-Stuart, “…if you don’t like HSBC shares, you are free to sell them...”
There were some positive comments from both shareholders and the Board but the majority of the meeting was either hostile or accusatory. Some of the critical shareholders were heckled but much of this was led by a former HSBC Chief Executive sitting in the audience.
Sir Mark Moody-Stuart told shareholders that they should look at the other parts of the business which had performed well and that shareholders should be pleased that they were not being asked to subscribe to a rights issue.
One shareholder stated that another British company, British Airways, had also grown profits by 10% in the previous year, but following a public disaster, the opening of Terminal 5 at Heathrow, the Chief Executive decided to forgo his bonus. The shareholder asked if HSBC executives should consider a similar action.
Another shareholder stated that it was pointless learning how to use the electronic voting machine because the voting at the AGM would make no difference to the results, implying that the institutional shareholders had already voted in favour.
Ignoring the critical business issues discussed at the meeting, the most disappointing matter to come out of the AGM was the apparent break down in the relationship between the shareholders and their representatives, the Board.
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