HSBC, Standard Chartered bosses forego bonuses in mea culpa to calm rebel shareholders in dividend fight
- Rebel shareholders have demanded HSBC eliminate pay to top management for a year
- Move comes after UK regulator told banks not to pay bonuses to senior staff
HSBC and Standard Chartered said on Thursday that their top executives would waive their bonuses this year and donate part of their salaries to helping fight the coronavirus pandemic.
Rebel shareholders, incensed at the loss of dividends, have demanded that the bank eliminate pay to top management for a year.
In an internal memo released on Wednesday afternoon London time, HSBC said that its chief executive, Noel Quinn, and its chief financial officer, Ewen Stevenson, would waive their cash bonuses for 2020 and donate a quarter of their salary for the next six months to charity. The donation would equal about £159,000 (US$197,300) for Quinn and £93,000 for Stevenson.
Mark Tucker, the HSBC chairman, also would donate his entire fee for 2020 – £1.5 million – to charity, according to the memo seen by the South China Morning Post.
“All three of us will donate to charities supporting health care workers and vulnerable people in the UK and Hong Kong,” Quinn said in the memo.
On March 31, the PRA asked the United Kingdom’s biggest lenders to cancel their final unpaid dividends for 2019 and not pay any dividends through at least the end of 2020 to support the economy in light of the pandemic, which has infected more than 1.5 million people worldwide.
The novel coronavirus, known as SARS-CoV-2, has disrupted daily life, with cities locked down from New York to Singapore and many businesses are asking employees to work from home. Tens of millions of people have lost their jobs as the pandemic has disrupted air travel and economic activity on an unprecedented scale and likely pushed the global economy into a recession.
About a third of HSBC’s shareholders are retail investors, and many of those investors depend on the regular income they receive from HSBC’s dividends. HSBC was due to make its final payout of US$0.21 a share on April 14.
Some shareholders have said HSBC and Standard Chartered should move their headquarters from London to Hong Kong, rather than be subject to a regulator 6,000 miles away from their largest market, Hong Kong. Both banks generate more than half of their revenue in Asia.
HSBC was founded in Hong Kong 155 years ago but moved its headquarters to London in 1993 after acquiring Midland Bank. Four years ago, the bank decided to keep its home base in London after a nearly year-long review.
In a stock exchange announcement early Thursday, Standard Chartered said its CEO Bill Winters and its chief financial officer Andy Halford would forgo any cash bonus for 2020 and would make “significant personal donations” to funds assisting the pandemic.
Standard Chartered’s chairman, directors and management team also will make personal donations, the company said.
“The remuneration committee has committed to ensure that decisions regarding 2020 remuneration will be taken in the light of the group’s overall performance and the challenges faced by the group’s various stakeholders resulting from the spread of Covid-19,” the bank said.
Covid-19 is the disease caused by the coronavirus.
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