Europe's top bank HSBC unveils boardroom shake-up
HSBC unveiled a huge boardroom shake-up on Friday as Europe's biggest bank looks to build on its recovery after the financial crisis as well as profiting from strong growth in Asia.
HSBC said Stuart Gulliver, head of its investment arm, would replace Michael Geoghegan as chief executive and chose finance director Douglas Flint as its new chairman following a reported boardroom struggle.
The announcements came after markets closed in London.
"Douglas Flint will succeed Stephen Green as Group Chairman and Stuart Gulliver will be appointed Group Chief Executive, following Michael Geoghegan's decision to retire early next year," HSBC said in a statement.
The dramatic overhaul at the top of HSBC caps a tumultuous period for the bank since Green announced he was quitting, with Geoghegan reportedly failing to win enough support to become chairman after 37 years with the lender.
"As a result of Stephen Green's decision to step down earlier than planned, Michael Geoghegan suggested and the Board agreed to accelerate HSBC's management succession plan and appoint his successor, so that a new leadership team would be in place in 2011," HSBC said in Friday's statement.
Geoghegan will step down on December 31 but will continue to be employed by the group in an advisory capacity until March 31, 2011, the bank said.
"It has been an honour and a privilege to serve HSBC and its customers over nearly four decades and to lead the company since 2006," Geoghegan said Friday as the bank announced he would receive a pay-out worth 1.42 million pounds (1.67 million euros, 2.25 million dollars), excluding bonuses.
His replacement Gulliver, who will be based in Hong Kong, will receive 1.25 million pounds and be entitled to performance-related bonuses.
New chairman Flint will earn a basic annual salary of 1.5 million pounds but will not be entitled to any bonus or share incentive awards, HSBC said.
Hong Kong-based Geoghegan, 56, was regarded as a frontrunner for the position of chairman and HSBC has a history of elevating its chief executive.
The promotion of Gulliver meanwhile is the second time in a month that a highly paid investment banker has been elevated to chief executive of a major bank, following Bob Diamond's appointment at Barclays.
Diamond's appointment proved hugely controversial in Britain, where the US national is infamous for pocketing massive bonuses.
Gulliver said he was "honoured" by his appointment.
"This is one of the iconic jobs in banking and having served 30 years in the Group I am excited by the challenges," he said.
"HSBC is uniquely positioned to contribute to global economic development through facilitating connectivity between developed and developing markets and supporting the financial needs of our global customer base."
Flint's promotion to chairman comes after Green was appointed Britain's trade minister on September 7.
Green, who spent 28 years at Asia-focused HSBC, is leaving the bank in rude health after steering it through the global financial crisis without taking a government bailout.
Flint said: "Our industry is in the midst of fundamental change which will define how banks operate. At the same time we need to restore trust in the banking industry by learning from mistakes made in recent years."
HSBC, founded in Hong Kong and Shanghai in 1865, sees Asia as its most important region although it remains headquartered in London.
The Financial Times reported this week that Geoghegan had threatened to quit when the bank's board indicated it might pass him over and instead hand the chairman's job to HSBC non-executive director John Thornton.
Thornton, a former Goldman Sachs banker, was the other main contender for the job but choosing between him and Geoghegan proved too difficult for the bank's board, according to the FT. Flint emerged as a compromise candidate, said the paper.
© 2010 AFP