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HSBC chief is sorry for 'out of control' bonuses
Jonathan Prynn2 Mar 2009
Britain's most senior banker issued an extraordinary apology today for the "out of control" City bonus system.
Stephen Green, chairman of Europe's biggest bank, HSBC, said: "It is clear that the banking industry got it wrong in the go-go years."
But the high street lender also revealed it paid two of its bankers almost £25 million last year, virtually all of it in the form of bonus or "signing on" fees. They are thought to be Tom Cole and Dan Toscano, HSBC's co-heads of leveraged and acquisition finance in the US.
Both were head-hunted from rival Deutsche Bank in September 2007 and are believed to have been paid huge guaranteed bonuses to lure them to HSBC.
The accounts show one got between £13.7million and £13.8million and the other between £11 million and £11.1 million last year. Their packages are thought to have been almost entirely in the form of bonuses and fees with only a relatively small amount as base pay.
Industry sources suggested deals on that scale were unlikely to be seen in the City or on Wall Street for many years. "These are very much 2007 negotiated packages," one said.
The executive directors and MrGreen waived bonuses of more than £10million but the board and senior management still got $49.84million (£34.9million) with pay and benefits.
The biggest loser was Stuart Gulliver, head of HSBC's investment banking arm, who was entitled to a bonus of £5.6million.
Today's apology from Mr Green is the most fulsome recognition yet from the City of the intensity of anger over huge bonuses paid to traders and bankers whose deals helped trigger the global financial meltdown. It goes far beyond those from the four former bosses of Royal Bank of Scotland and HBOS at the Treasury select committee last month.
Mr Green said: "The industry has done many things wrong. It is important to remember that many ordinary bankers have always sought to provide good service to their customers, but we must also recognise that there have been too many who have profoundly damaged the industry's reputation.
"Inappropriate products were sold inappropriately by many. Compensation practices ran out of control and perverse incentives led to dangerous outcomes. There is genuine and widespread anger that the contributors to the crisis were in some cases amongst the biggest beneficiaries of the system."
He said the bonus system would survive but in a "sober and reasonable" form and that a "small number" of top performers would continue to get rewards that were "high in absolute terms".
Reader views (6)
If you make decent interest/earnings on your money with a bank, or get a great loan, and the folks running the bank make a lot of money, what's not to like?! Don't we call that a win-win?
- Howard, New York, NY, 27/08/2009 21:08
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This is unspeakable evil. It seems obvious that the UK government, in giving all these banks BILLIONS of taxpayers' money, knew full well that the top boys were being given astronomical bonuses and pension funds. Why are you all allowing the Labour government to get away with all their activities to the detriment of the UK community? The UK taxpayers should demand that Brown resign immediately and hold a a general election. Good luck.
- Ben Adamson, New York, NY, 02/03/2009 14:48
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HSBC are not state funded, so renumeration is an issue for their shareholders.......
if you don't like your bank's policies, as a customer you ar free to move elsewhere...as a shareholder you free to move your money out...
- Martin_Clerkenwell, London, 02/03/2009 13:50
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And it still goes on!!! Whose next????
- C Cusano, Bedford, 02/03/2009 12:18
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Only goes to show what I've know for years, bankers just use your money to make themselves rich.
It will be a very clever bank that gets its hands on my money after this debacle. Best put it in a jar and bury it.
- Ray, Sydney, 02/03/2009 10:33
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Well there you are. The executives working hard at failing for the investors and lavishly rewarding themselves. Today they need approximately 12 billion of investment. The investors are losing their hard earned funds invested with these so called robber institutions and the banking fat cats who lack the any moral fibre are benefiting personally. This is nothing but criminal.
- Peter Noterfed, Paris, France, 02/03/2009 10:09
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