HSBC boss Stuart Gulliver is facing pressure from shareholder groups over "excessive" pay

Oliver Gill
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HSBC chief executive Stuart Gulliver has been at the helm since 2011 (Source: Getty)

HSBC is set to receive a frosty response from shareholders at its annual general meeting (AGM) on Friday, with some investor groups advocating a vote against top exec pay.

Investor body Pirc has recommended a vote against HSBC's remuneration report, calling benefits allocated to chief executive Stuart Gulliver "excessive". Pirc added the ratio of executive pay to average employee remuneration, 102:1, was "highly excessive".

Read more: Corporate governance experts slam executive pay ahead of shareholder votes

However, the advice from Pirc has not been replicated by other shareholder group, with Glass Lewis and ISS recommending investors agree to HSBC pay packets.

Nevertheless, ISS was hardly glowing about the amounts to be dolled out. It noted the proposed board remuneration was a "higher annual bonus pay-out vis-a-vis previous year despite a significant reduction in reported profit".

Board members Irene Lee and Paul Walsh were up for re-election on Friday and ISS and Glass Lewis both recommended a vote against their reappointment amid fears both have too many other board appointments.

But former Diageo boss Walsh announced last week he will step down, leaving Lee under pressure to take the same decision.

Nevertheless, Pirc concluded Lee should be reappointed but registered an abstention vote for Walsh.

Dividend and share buybacks

Pirc also raised significant concerns over HSBC's dividend and share buyback regimes, registering an "oppose" vote against both as well as the firm's annual report.

Read more: Power grab: Drax shareholders rebel against "excessive" executive pay

Pirc said: "It is noted that the company has not provided shareholders with an opportunity to approve dividends paid during the year.

"The vote by shareholders on the payment of a dividend on unqualified accounts, discharges the duties of the directors in tandem with the legal responsibilities of the auditors, and reaffirms the necessity of reliably audited accounts for financial governance to function properly."

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