HSBC Holdings Plc said reports that its Chief Executive Officer Michael Geoghegan had threatened to resign if he was not given the chairman’s job were “nonsense.”
“It is nonsense that the group CEO threatened to resign unless he was appointed chairman,” said spokesman Patrick McGuinness in a telephone interview. “The suggestion is offensive to Mike and to the company.”
HSBC’s independent directors, led by former Goldman Sachs Europe President Simon Robertson, are seeking a replacement for Chairman Stephen Green before the end of the month, a person familiar with the situation said Sept. 10. Geoghegan threatened to quit if he wasn’t promoted to chairman, the Financial Times and the Evening Standard reported today.
Geoghegan, a 37-year HSBC veteran, has worked all over the world for the London-based bank. After stints in Asia and the Middle East, he ran the South American unit from 1997 to 2003. He became CEO in May 2006 and moved to Hong Kong from London in February to sharpen the bank’s focus on Asia.
“As previously stated, the board is working under due process to finalize HSBC’s succession plan following Stephen Green’s already announced departure and this proceeds in line with the scheduled timetable,” said McGuinness.
Green will join the British government as trade minister in January, he said on Sept. 7.
The board must decide whether to follow the bank’s tradition of promoting a CEO to the post of chairman or observe corporate governance guidelines and name an independent chairman, a person familiar with the situation said. John Thornton, a former Goldman Sachs president who is chairman of HSBC’s North American division, is the most likely rival candidate to Geoghegan, the person said.
“If John Thornton was put above him, he might see it as a slight,” said Christopher Wheeler, an analyst at Mediobanca SpA in London who has a “buy” rating on the stock. “But being CEO is a very important role.”