£23m payout softens blow to Geoghegan
MICHAEL GEOGHEGAN, the outgoing chief executive of HSBC, will have earned a potential payout of up to £23m by the time he leaves the bank next year, in the wake of an effective coup at the helm of the group.
Geoghegan is in line for a severance payout of £1.24m, while he is also eligible for a bonus of up to £4.2m for the current financial year. He owns £6.2m of shares built up throughout his 37-year career at HSBC, around £4m worth of restricted shares from previous bonuses yet to vest, and £7.2m in a long term incentive plan.
But the actual amount Geoghegan will take home will almost certainly be considerably less than £23m, due to the stringency of the targets to which HSBC’s long term incentive plan is aligned. The scheme typically only pays out a quarter of its value over time. He has also previously donated bonuses to charity, including £4m in the prior financial year, meaning the 2010 award and restricted shares may end up in third sector coffers.
HSBC’s treatment of Geoghegan during the succession process, when lurid details of a rift on the board were leaked to the press, has come under fire from investors despite the bank’s denial of any bad blood.
George Godber, a fund manager at Matterley, said: “There have been many raised eyebrows about the process, which was very out of character for HSBC, a deeply conservative organisation. It all just seemed extremely unprofessional.”