HSBC chief executive Michael Geoghegan may have relocated to Hong Kong but he has not escaped the long arm of the British government, which has indirectly scotched the banking giant's plans to give him a pay rise.
The bank has shelved its goal to raise Geoghegan's salary 40 per cent to GBP1.5 million (HK$18 million) from GBP1.07 million, British media reported. This followed a shareholder revolt evidently inspired by the government, which has been eager to punish bank chiefs for the nation's financial crisis.
The HSBC chief was not paid a cash bonus last year after the bank's dismal performance in 2008.
Earlier this month, Britain's City minister Lord Myners fired off a strongly worded letter to 50 of the country's leading investment funds demanding that they urge banks to show restraint on executive pay.
An HSBC spokesman declined to comment. The bank's remuneration committee will formally recommend a salary package for Geoghegan and the rest of HSBC's board tomorrow, before revealing its decision on Monday alongside the bank's 2009 financial results.
But a person familiar with Geoghegan's personal affairs said: 'The British government has been keen for banks to toe the line.'
The bank was set to increase HSBC group finance director Douglas Flint's salary to GBP900,000, the Financial Times said, but is now likely to freeze his base pay.
