HSBC Flouted Board Best Practice on Aldinger Pay by Jim Armitage
Armitage, Jim, The Evening Standard (London, England)
Byline: JIM ARMITAGE
BANKING group HSBC breached Stock Exchange recommendations in the way its board approved a [pounds sterling]35 million pay package for its new US-based director.
According to best practice principles for UK-listed companies, executive directors' pay deals must be assessed and approved by the remuneration committee independently of the executives.
Such practice, set in stone in most boardrooms, prevents the perception of non-executives being steamrollered into approving pay packages pushed by powerful personalities on the executive board.
But chairman Sir John Bond said the directors had decided together in setting pay for William F Aldinger III. There was no separate approval from non-executives on its remuneration committee.
The package, which includes a potential [pounds sterling]20 million payout should Aldinger be sacked, ran into fierce opposition at the bank's annual general meeting on Friday.
Bond's admission provoked fresh ire from the influential Pensions Investment Research Consultants, which has already branded Aldinger's deal as "outrageous".
It wants boards to adopt the Combined Code of conduct for stock market-quoted companies, established after the Greenbury, Cadbury and Hampel committees on corporate governance best practice. …