Irish chief executive of HSBC pledges £4m bonus to charity
Disappointing results as $5.83bn earnings fall short of analyst estimates
Published 02/03/2010 | 05:00
MICHAEL Geoghegan, the Irish chief executive of London-based HSBC bank, said yesterday that he would hand over his £4m (€4.4m) bonus to educational charities.
Mr Geoghegan, the 57-year-old son of a UCD academic from Co Tipperary, plans to give his bonus to charities in the UK and overseas, according to an emailed statement.
Mr Geoghegan went to school in Windsor in England and in Dublin but turned down a place at his father's employer, University College Dublin, to take up a job in the international division of HSBC. He has been with the bank ever since.
Mr Geoghegan, who didn't receive a bonus last year, will receive the bonus in stock over the next three years and then donate it to charity.
"Between now and 2013 I will give up to £4m to charities around the world, including important causes in Hong Kong and in the UK," he said.
Bonuses for bank bosses is a political football in the UK where the CEOs of Royal Bank of Scotland, Lloyds Banking Group and Barclays all waived their bonuses last month in response to public protests over pay.
HSBC, which didn't receive a government bailout, yesterday posted full-year net income that missed analyst estimates after costs for bad loans climbed and profit fell for units in Europe, the Middle East and Asia.
Earnings increased to $5.83bn (€4.3bn) from $5.73bn a year earlier. That was less than the $7.76bn median estimate of analysts surveyed by Bloomberg.
"These results are disappointing," said David Crawford, a money manager at Octopus Investment who had the best- performing long-short fund in the UK last year.
"It is the most highly valued bank in Europe, so it needs to deliver on that high valuation. People expect great things from it."
The bank plans to trade its shares in Shanghai and last month moved chief executive Mr Geoghegan to Hong Kong from London to sharpen its focus on Asia.
HSBC halted consumer finance loans in the US after racking up provisions of at least $70bn in the past four years following its acquisition of US subprime lender Household International.
Impairment charges and other credit risk provisions rose to $26.5bn in 2009 compared with $24.9bn the previous year, the company said.
Full-year pretax profit fell by 63pc to $4bn in Europe, by 9.4pc to $10.2bn in Asia and by 74pc to $455m in the Middle East from the year-earlier period.
(Additional reporting by Bloomberg)