HSBC Holdings PLC (NYSE: HBC) CEO Stuart Gulliver’s paycheck remained healthy in 2012 despite numerous reports that Britain’s largest bank paid U.S. authorities $1.9 billion in December to settle money laundering allegations.
According to CNN, Gulliver raked in $11.1 million in 2012, in addition to an annual bonus worth $2.9 million, which will be deferred over five years, rather than the standard three, and payable only if conditions attached to the U.S. settlement are met.
While Gulliver’s annual income represents an eight percent fall compared with 2011, the loss is on par with the rest of HSBC’s filings, which report profits to have fallen to $13.5 billion in 2012, from $16.2 billion in 2011.
Shares of HSBC fell 2.49 percent to 710 pence in early London trading.
Douglas J. Flint, HSBC’s chairman, said in a statement last year was “a difficult one for all at HSBC as we addressed the restructuring of the firm against a lower-growth economic backdrop and with legacy issues and regulatory challenges imposing a further set of imperatives.”
Aside from the nearly $2 billion HSBC paid last year to settle a money-laundering case that allegedly dealt with illicit drug money from Mexico, the global banking giant paid an additional $1.4 billion fine in the U.K. for improperly selling financial products to customers and also wrote down the value of its own debt by $5.2 billion.
Meanwhile, with a bonus in 2012 equal to nearly four times his base salary, Gulliver's compensation remains in line with top bankers such as JPMorgan Chase & Co.'s (NYSE: JPM) Jamie Dimon and Citigroup Inc.'s (NYSE: C) Michael Corbat.
HSBC said its total variable pay pool for 2012, including short-term bonuses and long-term incentive payments, was $3.7 billion, down from $4.2 billion the previous year. Its investment bankers were awarded a larger share, taking $1.3 billion compared with $1.2 billion in 2011.
The bank’s latest financial results come one week after European Union officials agreed to cap bonuses at twice annual salary from as early as next year.
HSBC earlier reported 2012 pretax profit of $20.6 billion, down six percent from the year-earlier level and missing analysts' forecasts.