HSBC’s Gulliver to undershoot bonus targets

Michael Bow
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HSBC chief executive Stuart Gulliver is expected to fall short of targets that would net him a potential £3.75m bonus today as the bank unveils record pre-tax profits.

The banking giant, which was hit with a $1.9bn (£1.2bn) fine in a money laundering case in December, is expected to keep Gulliver’s bonus roughly in line with his £2.2m payout last year after the bank missed its expense ratio and return-on-equity targets in the third quarter.

Reputational damage due to the money laundering case is also set to play a role in slashing his total pay, which has a maximum value of £12.5m.

Markets are expecting the bank to deliver a bumper $23.5bn pre-tax profit this morning, up from $21.9bn last year.

This comes despite a forecasted drop in net operating income, excluding loan impairment charges and other credit risk provision, to $70.2bn down from $72.3bn in 2011.

Shares in HSBC closed down almost half a per cent on Friday at 728p, ahead of today’s results.

Gulliver is paid a £1.25m base salary and can receive up to £3.75m in bonuses and £7.5m in long-term bonuses.

HSBC executive pay is based on a widely welcomed scorecard approach, which rates how well the chief executive has down over the year. Last year Gulliver received a total payout of £7.2m.