HSBC's Chairman Green Will Stay at Least Until 2011
“I would have preferred not to say anything, because actually we have nothing to announce,” Green told shareholders during the bank’s annual general meeting in London today. “I look forward to chairing the next AGM in 2011.”
Green, 61, succeeded John Bond as executive chairman of the bank in 2006 after a three year period as chief executive officer. He handed control of the bank’s strategy to CEO Michael Geoghegan, who moved to Hong Kong from London in February, to focus on the bank’s expansion in China.
The Sunday Telegraph reported on May 23 that Green would step down this year and would be succeeded by John Thornton, chairman of HSBC’s North American unit and former Goldman Sachs Group Inc. co-chief operating officer.
“Rest assured, when there’s something to say, we will say it to our shareholders first,” Green said, adding that you shouldn’t believe everything that’s in the newspapers.
The chairman’s role “must be essentially full-time” and that the CEO should be Hong Kong-based, Green said.
HSBC in March posted a 1.7 percent rise in net income for 2009 to $5.83 billion. The bank has set aside more than $58 billion for bad loans in North America following its $15.5 billion acquisition of subprime lender Household International in 2003.
The U.S. unit posted its first profit in three years in the first quarter, after closing its consumer finance operation last year to curtail bad loans.
Thornton was elected to run HSBC’s remuneration committee, taking over from Mark Moody-Stuart who is retiring. Thornton will consult shareholders during a review into how HSBC pays staff this summer, Green said. The chairman defended the bank’s pay policies saying that it must be internationally competitive or risk losing its best staff.
A representative of Standard Life Plc, an Edinburgh-based fund manager and a shareholder in the bank, said it would vote against the remuneration report because it contained “unacceptable” pay rises.
Investors backed the director’s pay report, with 87 percent voting in favor, fewer than last year’s figure of 91.2 percent.
The Association of British Insurers, whose members own about 15 percent of British publicly traded companies, this month issued an “amber alert,” on HSBC’s pay packages, indicating investors should scrutinize the plans.
In March, HSBC said in its annual report that it would pay Geoghegan a 300,000 pound ($448,000) allowance to live in Hong Kong and that his salary will be raised to “international levels” within the next 12 months. Geoghegan has pledged to give as much as 4 million pounds of his bonus to charity.