Although 88.41% of shareholders approved the remuneration report and 90.2% approves the new executive share plan the mood in the meeting was strongly against the vote. One shareholder stated that it was pointless using the electronic voting machine implying that the Board had already persuaded institutional investors to vote in favour.

PIRC, the UK based corporate governance firm, and the Association of British Insurers had recommended a vote against the new executive share scheme which would enable executives to receive twelve times their base salary in total compensation if they achieved “moderate” targets.

But what was the most memorable aspect of the meeting was the apparent mutual disregard shown to each other by both the shareholders and members of the Board. At one stage, the HSBC Chairman, Stephen Green explained what the Head of the Remuneration Committee, Sir Mark Moody-Stuart had said was, “..if shareholders don’t like HSBC shares, they are free to sell them, and if they don’t like the sector they can get out.”

There were some favourable comments from shareholders but generally they were angry about both the performance of HSBC’s US consumer finance arm and the remuneration of senior executives.

The lengthy meeting (3 hours and 20 minutes) was punctuated with heated comments by shareholders and some derisory comments from the Board members. Eric Knight, of the activist fund manager, Knight Vinke, received particular focus. He was accused of misrepresentation and was told that his calculations were nonsense.

One shareholder, Derek Young, stated that the British Airways chief executive, Willie Walsh, also ran a company that had achieved a 10% growth in profits in the previousyear but due to the problems experienced at Heathrow’s Terminal 5, he had declined a bonus for the year. The shareholder requested HSBC’s executives to consider this approach.

Another shareholder, Brian Dodd, raised the issue concerning the much debated 2005 compensation scheme. The Chairman replied that HSBC had the matter examined by lawyers and a Queens Counsel and had received an opinion that the scheme was legal.

Mr Dodd also complained that over the last three years, HSBC’s Total Shareholder Return had been 9% , whereas inflation had been 11% and the compensation of Stephen Green, Michael Geoghegan and Douglas Flint had increased by 71%, 547% and 61% respectively.

With regard to HFC, Stephen Green defended the business, claiming its importance to the Group’s international credit card operation. He admitted that the Group had learnt lessons but did not admit mistakes nor apologise to shareholders for the £5.5 billion of provisions. Robert Muriel, another shareholder, claimed HFC was a near disaster. He also asked who had suffered as a result of the losses as senior executives had still received their bonuses.

Another shareholder, who did not want to be identified, stated after the meeting that many of the shareholder questions were not answered and that the Chairman avoided the difficult questions by responding with prepared text.

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