Large bonuses paid to executives of loss-making banks are headline news in the UK. The public is up in arms because banks are seen as the most blameworthy institutions in the current financial crisis, while the press regularly reports that banking executives are ‘paying themselves’ large bonuses, despite banking job cuts and a continuing decline in profits.
This week, it is the turn of HSBC to brave public opprobrium, with chief executive Stuart Gulliver pocketing £7.2 million in basic pay and bonuses. However, his bonuses (potentially totalling up to 100% of his salary) were capped at 50% by the HSBC board pay committee, since the bank failed to meet several of its yearly targets, such as return on equity, cost efficiency and compliance. (more…)