London, UK (BBN) – An overwhelming majority of HSBC shareholders have approved a new pay policy for executive directors (EDs).
The move will cut the maximum amount directors can earn by 7.0 per cent, but the executives’ pay awards for 2015 were backed by 96 per cent of investors, reports BBC.
They include a total package worth £7.34m for chief executive Stuart Gulliver.
A shareholder advisory group had asked shareholders to reject the 2015 remuneration report.
Earlier this week, Pensions and Investment Research Consultants (Pirc) said HSBC’s executive pay awards for 2015 were “excessive”.
HSBC held its annual general meeting on Friday.
It outlined its proposals to cut the amount of cash given to directors in lieu of a pension from 50 per cent to 30 per cent of base salary and make them wait three years before they receive long-term bonuses.
Europe’s biggest bank told shareholders in its AGM statement that the new proposals took into account regulatory changes but also “address your feedback”.
The chairman of HSBC’s remuneration committee, Sam Laidlaw, said in his statement the committee believed there should be rewards for delivering results and penalties when they are not delivered in the right way.
Last year’s bonus pool had been cut by $431m (£300m) to “reflect fines, penalties and the cost of customer redress”.
According to the annual report, Mr Gulliver received a total of £7.34m last year, down from £7.61m in 2014.
Mr Laidlaw asked shareholders to vote in favour of both last year’s remuneration report and the new three year policy.
Investors in other big companies have been grappling with the issue of directors’ pay recently.
Earlier this month, BP shareholders rejected a pay package of almost £14m for chief executive Bob Dudley at the oil company’s annual general meeting.
Just over 59 per cent of investors voted against Mr Dudley’s 20 per cent increase, one of the largest rejections to date of a corporate pay deal in the UK.
On Thursday, 42 per cent of shareholders in Anglo-American voted against the £3.4m remuneration package of chief executive Mark Cutifani.
The UK-listed mining giant saw the value of its shares fall by 75 per cent last year, the worst performance of any of the companies listed on the FTSE 100 and the fifth year in a row that the share price has fallen.
Also on Thursday, a report said the present method of calculating executive pay is “not fit for purpose” and needs reform.
The Executive Remuneration Working Group, which was established by the Investment Association, said there was “widespread scepticism and loss of public confidence” over executive pay.