HSBC executives cash in shares worth HK$46m

Top three sold holdings on same day banking giant announced 18pc rise in underlying profit

PUBLISHED : Saturday, 09 March, 2013, 12:00am
UPDATED : Saturday, 09 March, 2013, 5:43am

HSBC plans to raise its dividends in the first three quarters this year, but its three top executives are not waiting to reap the full benefit of this move.

Chief executive Stuart Gulliver, chairman Douglas Flint and finance director Iain Mackay sold shares worth a total of £4 million (HK$46.6 million) on Monday.

That was the day the global banking giant announced its results for last year, with an 18 per cent rise in underlying profit, but a fall of 6 per cent in pretax profit.

The Hong Kong stock exchange forbids directors from buying or selling their company's shares for one month before full-year results are announced.

As soon as HSBC's closing period ended, Gulliver sold 500,148 shares, about 10 per cent of his holdings. Flint sold 60,658 shares, and Mackay sold 8,618 shares.

We don't know their circumstances, and that is not a significant change of ownership. They are just selling down their interest

The shares were sold in London for £7.108 apiece. Gulliver reaped £3.5 million from the sale. Flint and Mackay got £431,300 and £61,200 respectively.

From Monday, the share price of HSBC rose 3.4 per cent in London to £7.36, near a 26-month high, in mid-afternoon trading yesterday, and gained 0.8 per cent in Hong Kong to close at HK$84.95.

The bank said it would increase the dividend for each of the first three quarters of this year by 1 US cent per share to 10 US cents. Last year's fourth-quarter interim dividend rose 28.5 per cent to 18 US cents.

Gulliver said in a conference call that the bank would deliver a progressive dividend payout in the range of 40 to 60 per cent.

Steven Chan, an analyst at Citic Securities, said top managers might need to obtain cash after their bonuses were cut.

Gulliver's bonus was £1.95 million for last year, compared with £2.15 million a year earlier. Flint received no bonus for 2011 and 2012, while Mackay's bonus rose to £1.34 million last year from £1.08 million in 2011.

Chan suggested some shares may have been sold to pay taxes.

An HSBC spokesman refused to comment on the deals. "We don't know their circumstances, and that is not a significant change of ownership. They are just selling down their interest."