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HSBC Executives receice maximum awards |
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Following the approval of the revised HSBC Group Share Plan at the May 2008 Annual General Meeting, the two senior executive directors at the company received the maximum award. Stephen Green, the HSBC Group Chairman, was awarded 1,025,584 shares valued at £ 8,743,103 (US$ 17.3 million) as at the award date. Micheal Geoghegan, the HSBC Group Chief Executive, received an award of shares valued at £ 7,471,378 (US$ 14.8 million). The performance share awards will vest in three years on a proportional basis depending on how the performance targets are met. The performance shares are awarded annually.
The revised share plan was passed with a majority of 90.2% of votes at the AGM, although 16.9% were either voted against the plan or were withheld. Prior to the AGM, the Association of British Insurers and PIRC, the corporate governance advisory firm, had expressed their concern with the plan. Knight Vinke, the activist investor firm, had also stated that the performance targets set were not sufficiently challenging.
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HSBC Holdings (Headquarters - London) HSBC is one of the largest banking and financial services organisations in the world. HSBC's international network comprises over 10,000 offices in 83 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. HSBC provides a comprehensive range of financial services: personal financial services; commercial banking; corporate, investment banking and markets; private banking; and other activities. With listings on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by over 200,000 shareholders in some 100 countries and territories.
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HSBC announced that that its 3rd quater profit 2008 was higher than that in 2007 despite an increase in write downs of US$ 4.9 bn. The quarters impairment charges were offset by a number of one off gains including US$ 3.4 billion fair value gain, US$ 2.4 bn pre-tax profit on the sales of its French regional banks and US$ 0.835 bn through reclassification of certain trading assets. Readmore | HSBC announced today that its ist half 2008 profit before tax fell by 28% to US$ 10.247 billion, a fall of US$ 3.9 billion over the 1st half 2007. Its US operations reported a fall in profit befor tax of US$ 5.328 billion to a net loss os US$ 2.435 billion. Readmore | Following the approval of the revised HSBC Group Share Plan at the May 2008 Annual General Meeting, the two senior executive directors at the company received the maximum award. Stephen Green, the HSBC Group Chairman, was awarded 1,025,584 shares valued at £ 8,743,103 (US$ 17.3 million) as at the award date. Micheal Geoghegan, the HSBC Group Chief Executive, received an award of shares valued at £ 7,471,378 (US$ 14.8 million). The performance share awards will vest in three years on a proportional basis depending on how the performance targets are met. The performance shares are awarded annually. The revised share... Readmore | At HSBC’s Annual General Meeting, shareholders showed their displeasure over the current and panned compensation for senior executives. Readmore | Business and Financial press are highlighting investor concern over the planned new executive compensation scheme for HSBC executives. Readmore | | Show options |
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HSBC Group – Recent Events
Sub-prime ExposureOn 7 February 2007, HSBC Group issued a Trading Update Statement. The statement, referred to by many as a “Profit Warning”, commented on the challenges of the Mortgage Services operations on HSBC Finance Corporation. The statement explained that the slowing house price growth was being reflected in the accelerated delinquency trends across the US sub-prime mortgage market. As a result the Group expected to increase impairment and other credit risk provisions for 2006 to a level of 20% above consensus estimates. In the Financial Statements for 2006, issued in March 2007, the Group confirmed that the impairment charges for the US operations rose by US$ 1.880 billion to US$ 6.796 billion. In the Financial Statements for 2007, issued in March 2008, the Group confirmed that the impairment charges for the US operation had risen by US$ 5.360 billion to US$ 12.156 billion, resulting in a profit for the year of only US$ 91 million for the entire US operations (US$ 4.668 billion in 2006). HSBC acquired Household Finance Corporation for US$ 14 billion in 2003.Activist Investor - Knight Vinke Asset Management LLC (KVAM)Following on from a meeting in June 2007 with HSBC Group’s Finance Director, KVAM wrote to the HSBC Board of Directors in September 2007. The letter highlighted KVAM’s concern over strategy, asset allocation, governance, share price performance and HSBC’s sub-prime exposure. It stated a request for an independent strategic review. In November 2007, KVAM restated its six key areas of concern: 1 Perennial stock market underperformance compared to peers. 2 Pursuit of geographic diversification instead of comparative advantage. 3 Lack of scale in key markets – UK, USA and France. 4 Good position in Hong Kong, but franchise at risk due to lack of credible China strategy. 5 Lack of credible CIBM strategy – trading assets now tie up a third of the group balance sheet. 6 Strategy unchallenged due to poor Board structure and lack of economic incentives for senior executives to do so. HSBC rigorously defended itself on all points raised by KMAM including that they had already reviewed their strategy and therefore their was no need for an independent review.
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