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HSBC reveals pay of top earners 200 HSBC staff paid more than £1m in 2012
(about 2 hours later)
HSBC paid 204 of its staff more than £1m in 2012, a year when Britain's biggest bank made profits of $20.6bn (£13.7bn) despite being fined £1.2bn by the US authorities for helping Mexican drug barons launder money through the financial system.HSBC paid 204 of its staff more than £1m in 2012, a year when Britain's biggest bank made profits of $20.6bn (£13.7bn) despite being fined £1.2bn by the US authorities for helping Mexican drug barons launder money through the financial system.
At the start of a week in which Barclays and Royal Bank of Scotland are both expected to disclose the pay of their highest earners for the first time, HSBC disclosed that 78 of those who took home more than £1m were based in the UK.At the start of a week in which Barclays and Royal Bank of Scotland are both expected to disclose the pay of their highest earners for the first time, HSBC disclosed that 78 of those who took home more than £1m were based in the UK.
To comply with UK rules which require banks to reveal the pay of the eight highest paid staff reporting to the chief executive, HSBC produced numbers showing they were handed between £7m and £2.3m. Hong Kong rules require the bank to reveal the pay of their highest paid staff regardless of whom they report to and this produced different numbers - the highest paid received up to £7.5m and the lowest up to £3.9m. Unite described the scale of the pay for top bankers as an "outrage" given that some of its members take home £14,000 a year and are facing changes to their pension schemes and holiday.
The bank paid $200m of corporation tax in the UK on the profits, which were lower than the City expected, causing a near 3% fall in the share price by 10.30am to 708p.
To comply with UK rules which require banks to reveal the pay of the eight highest paid staff reporting to the chief executive, HSBC produced numbers showing they were handed between £7m and £2.3m, totalling just over £28m. Hong Kong rules require the bank to reveal the pay of their highest paid staff regardless of whom they report to and this produced different numbers - the highest paid received up to £7.5m and the lowest up to £3.9m and £27.8m in total.
The bank's pre-tax profits for 2012 were $20.6bn, down 6% on 2011 and included $5.2bn caused by accounting rules requiring the bank to take account of the cost of buying back its own debt.The bank's pre-tax profits for 2012 were $20.6bn, down 6% on 2011 and included $5.2bn caused by accounting rules requiring the bank to take account of the cost of buying back its own debt.
Chief executive Stuart Gulliver was awarded a near £2m annual bonus for his "strong leadership" and "personal behaviour" in tackling the revelations which caused the US authorities to fine the bank for helping drug traffickers launder money. Banks are not required to disclose how many of their staff take home over £1m but HSBC has done so voluntarily in recent years. When Barclays and RBS release annual reports in the coming days, they are expected for the first time to formally lay out details of their highest paid staff, with Barclays likely to reveal as many as 600 took home more than £1m.
Bonuses worth just $700,000 were clawed back from staff, according to a separate disclosure required to comply with international regulations which also showed that HSBC paid its 314 "code staff" – takers and spotters of risk – a total of $384.3m, an average of $1.2m.
HSBC's chief executive Stuart Gulliver was awarded a near £2m annual bonus for his "strong leadership" and "personal behaviour" in tackling the revelations which caused the US authorities to fine the bank for helping drug traffickers launder money.
The bank produced a number of methods for disclosing his pay, including one total of £8.9m – which included his £1.2m a salary, a bonus of just under £2m, benefits of £1.2m as well as £5.6m of bonuses released to him from previous years.The bank produced a number of methods for disclosing his pay, including one total of £8.9m – which included his £1.2m a salary, a bonus of just under £2m, benefits of £1.2m as well as £5.6m of bonuses released to him from previous years.
He has been leading an effort to improve returns for shareholders and urged staff to demonstrate "courageous integrity". He has closed or disposed of 26 businesses and non-core investments in 2012 taking the total to 47 since beginning of 2011 when he was promoted from running the investment bank.He has been leading an effort to improve returns for shareholders and urged staff to demonstrate "courageous integrity". He has closed or disposed of 26 businesses and non-core investments in 2012 taking the total to 47 since beginning of 2011 when he was promoted from running the investment bank.
The bank's overall bonus pool was cut to take account of the US fine although, the bonus pool in the investment bank was still up slightly on 2011 at $1.3bn. The bank's bonus pool was cut to take account of the US fine although the bonus pool in the investment bank was still up slightly on 2011 at $1.3bn – although was down across the bank.
Chairman Douglas Flint said: "Banking has been given a huge wake-up call and we are determined to play our part in restoring its reputation and thereby regaining society's trust". The US fine had been "extremely damaging to HSBC's reputation" Flint said, saying the bank had already "apologised unreservedly" for the incident in its US and Mexican operations. Chairman Douglas Flint said: "Banking has been given a huge wake-up call and we are determined to play our part in restoring its reputation and thereby regaining society's trust". The US fine had been "extremely damaging to HSBC's reputation" Flint said, saying the bank had already "apologised unreservedly" for the incident in its US and Mexican operations which "exercised greatly" the board of the bank.
He also noted that UK government had increased the levy applied on the global balance sheets of UK-based banks which cost HBSC $571m, some of which $295m related to non-UK banking activity. He said this took $0.03 off the bank's dividend, which stood at $0.45 per share for 2012. He also noted that UK government had increased the rate of levy applied on the global balance sheets of UK-based banks which cost HBSC $571m, some of which $295m related to non-UK banking activity. He said this took $0.03 off the bank's dividend, which stood at $0.45 per share for 2012.
This bank levy and $2.3bn for customer redress – including PPI and swaps mis-selling - drove the UK arm of HSBC to a loss. HSBC shares were down nearly 3% in early trading. This bank levy and $2.3bn for customer redress – including PPI and swaps mis-selling - drove the UK arm of HSBC to a $1bn loss.
In total HSBC used $8.5bn to pay dividends to shareholders, while its total bonus pool was $3.9bn, down from $4.2bn in 2011. The bank took the unusual step of revealing that its policy for its first three interim dividends for 2013 which will be $0.10 per share, up 11%.