News Column

HSBC USES 'ALLOWANCES' TO BEAT EU BONUS CAP

August 14, 2014

By Rob Davies, Daily Mail, London



Aug. 14--HSBC has handed pounds sterling 7m of shares to 15 staff for just six months' work, dishing out 'fixed share allowances' designed to bypass EU bonus caps, writes Rob Davies.

Investors staged a revolt over pay at the bank's annual meeting earlier this year, with a fifth rejecting the pay policy that made these allowances possible.

But the bank went ahead with the awards, which circumvent new EU rules capping bonuses at 200pc of salary.

Using the phrase 'fixed share allowance' has allowed banks to maintain pay levels in the face of efforts to rein them in, because the shares are not technically part of a bonus.

But unlike bonuses, which are subject to 'clawback', the payouts are guaranteed to eligible staff simply for doing their jobs.

The pounds sterling 7m in shares were for six months' work, meaning awards for the full year will be pounds sterling 14m, or pounds sterling 8m after a chunk are sold to meet tax liabilities.

The biggest beneficiary was not chief executive Stuart Gulliver, whose allowance was worth pounds sterling 860,000, but investment bank boss Samir Assaf.

The head of global banking and markets pocketed an allowance worth pounds sterling 1.5m before tax at yesterday's HSBC share price of 638.3p, up 8.2p.

(ASTERISK) BARCLAYS (up 2.35p to 219.35p) is facing a pounds sterling 1.2bn hit from a mounting pile of misconduct issues, analysts at Sanford C Bernstein said.

They totted up estimated settlements over the alleged rigging of currency markets, lying to investors about its 'dark pool' exchange and mis-selling interest swaps.

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(c)2014 Daily Mail (London, )

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Source: Daily Mail (London, England)


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