HSBC has '£1.5bn bonus pot' but directors denied pay rise

HSBC has scrapped big pay rises for its top two executives following complaints from investors.

Britain's biggest bank is the latest of the high street giants to bow to mounting pressure from the City and the public over pay awards to chief executives.

HSBC, whose top shareholders include Credit Suisse, Legal & General, Standard Life and Fidelity, wanted to give chief executive Michael Geoghegan and finance director Doug Flint basic pay rises of almost 40 per cent for last year.

Geoghegan's basic pay would have risen from £1.07 million to about £1.5 million while Flint's would have gone from £700,000 to £900,000. By raising their basic pay the bank could also have automatically upped their bonuses.

Last week John Varley and Bob Diamond of Barclays agreed to turn down bonus payments and Royal Bank of Scotland's Stephen Hester and Lloyds' Eric Daniels have followed suit.

Critics of the banking sector say the moves, although welcome, could merely be an attempt to draw attention from the millions in bonuses that will still be paid to bankers outside the boardroom.

HSBC reports annual results on Monday when it will also disclose the size of its bonus pot and reveal what it paid its top five earners — although it will not name them.

Analysts expect HSBC, which also owns First Direct, to give out bonuses of £1.5 billion, compared with £2.3 billion at Barclays.

Geoghegan is entitled to a 2009 performance-related bonus of up to four times his salary, although HSBC has yet to say whether he will take it or not.

The company had argued that the two men should be paid more because of the extra responsibilities they have taken on in the past year. Geoghegan moved from HSBC's London headquarters last month to run the bank's operations out of Hong Kong.