HSBC under fire over £120m bonus scheme for execs

HSBC, Europe's largest bank, faced a barrage of criticism from shareholders at today's annual

The scheme, which had already raised concerns from corporate governance advisers Pirc and the
Association of British Insurers, would allow chief executive Michael Geoghegan a pay packet
of up to £12 million a year.

Several shareholders condemned the scheme, coming from a bank that wrote off almost $18 billion (£9.1 billion) last year, largely due to its exposure to US subprime loans.

"How long do we have to put up with paying you so much money to lose us money?" asked one
shareholder.

Despite such concerns, the pay deal was expected to be agreed by shareholders with at least 90% of
the shares.

Eric Knight, chief executive of activist investor Knight Vinke, took aim at HSBC's US division HFC, which has cost the bank $60 billion since it was bought in 2003.

Knight, who wants the bank to cut off the troubled US division, described it as "a $100 billion problem", adding: "The real problem
at HFC is not the assets, but the liabilities. These exceed the value of the business."

Chairman Stephen Green claimed Knight had "got hold of the wrong end of the stick", confusing
investment in HFC with its funding. Green said HFC had no funding problems, even during the credit crunch.

Dismissing calls to pull out of HFC, he said: "Abandoning problems, as it is sometimes suggested we should do, is not in our genes."

Despite getting a rough ride from some shareholders, the board received a great deal of
support from others.

Geoghegan promised shareholders: "You have my commitment to be hands-on in the US for the benefit of all shareholders and sort it as soon as possible."