HSBC shakes up UK boardroom

HSBC has
confirmed that its chief executive Michael Geoghegan is to be replaced by
Stuart Gulliver – currently the head of the group’s investment bank.

Douglas
Flint, currently HSBC’s finance director, has also been confirmed as the
replacement for outgoing chairman Stephen Green.

Mr Green
took up an offer of a UK government role earlier this month.

The
moves mark a significant shake-up of leadership at the UK’s biggest bank.

Earlier
HSBC denied reports that Mr Geoghegan was quitting after being told he was
being overlooked for the position of chairman.

The bank
has a history of promoting its chief executive to the chairmanship and Mr
Geoghegan had been seen as a front-runner in the race to replace Mr Green.

‘I wasn’t asked’

In a
conference call following the announcement Mr Geoghegan denied there had been
any ill feelings over the chairman’s job.

“It’s
been historical at this company that the chief executive goes on to be chairman
but you have to be asked, and the reality was I wasn’t asked,” he said,
adding that Mr Green’s decision to leave had “triggered” him to
consider his own future.

Mr
Geoghegan will receive a severance package worth £1.42m when he leaves HSBC at
the end of the year, while as chairman Douglas Flint will receive an annual
salary of £1.5m.

Stuart
Gulliver’s new chief executive salary will earn him £1.25m a year, plus pension
benefits an a bonus worth up to four times his salary.

In its
statement HSBC said the appointment of Mr Flint as chairman has been made by a
unanimous decision of the board.

“The
nomination committee came to the unanimous conclusion that Douglas Flint was
the best person – internally or externally – for the position, meeting all the
core criteria,” it said.

His
appointment has also been approved by the City regulator, the Financial
Services Authority (FSA).

‘Fundamental change’

Mr Flint
called the appointment “a privilege”.

“Our
industry is in the midst of fundamental change which will redefine have banks
operate,” he said.

“At
the same time we need to restore trust in the banking industry by learning from
mistakes made in recent years.”

Mr
Geoghegan gave no indication of any boardroom bitterness in his statement,
calling Mr Flint and his own replacement Stuart Gulliver “an awesome
combination”.

Mr
Gulliver will take over as the new chief executive from January next year.

The
moves are the latest in a series of moves among the UK’s top bankers.

Earlier
this week the chief executive of the Lloyds Banking Group, Eric Daniels,
announced his plan to retire in a year’s time.

And
earlier this month one of the world’s highest paid bankers, Bob Diamond, was
confirmed as the next chief executive of Barclays.

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