Global banking major HSBC is sounding out its shareholders on a proposed revision of its executive pay plans, which could see its top bankers unable to sell their stock until retirement, says a media report.
The plan, driven by John Thornton — chairman of the bank’s remuneration committee and a former Goldman Sachs executive — would see the top management assessed on a wider range of performance metrics, with an emphasis on the longer term, the Financial Times reported.
The changes, which include a cut in the maximum amounts awarded, would see potential remuneration for Stuart Gulliver, the bank’s new CEO, capped at 12.5 million pounds, as against the current 15 million pounds, it added.
Besides, the report said the same principles would apply to other top executives, though it was unclear how many would be covered by the scheme.
According to the changes, top bankers would earn three times their salary as annual bonus, in addition to six times their salary through a long-term incentive plan, compared to the current multiples of four and seven, the report noted.
HSBC said its consultation with large shareholders was underway and would be subject to investor approval at the bank’s annual meeting on May 27.
According to the publication, the proposal to force executives to hold stock awards until retirement is an imported idea. Goldman Sachs has long obliged top staff to hold 75 per cent of stock awards until they leave the bank. HSBC’s normal retirement age is 65.
Also included in the plan is a proposal to extend the period over which share awards would vest, from three years — as is the case with most UK companies — to five years, the daily said.
