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Recently, shareholders of one of London’s top banks gathered in London at the Barbican arts center. Many were upset following a recent report by the bank. Controversial layoffs and large bonuses for executives played a central role in the controversy surrounding HSBC’s shareholder meeting.
Layoffs Affect Many Londoners
HSBC had already announced a massive round of layoffs. Over 2,000 employees were scheduled to be let go. With a high unemployment rate and a shaky financial climate, this round of layoffs comes at one of the worst possible times for HSBC employees. According to the bank, these layoffs are necessary. Detractors are not so certain. In light of other happenings at the bank, controversy has sprung up surround the layoffs and detractors cry out against the bank in desire of better business practices.
Bonuses for Management
While 2,218 workers have been laid off, the top echelon of management still receive multi-million pounds in bonuses. At HSBC, 192 workers in this exclusive upper level of management received millions in bonuses while 2,000 employees were fired. After HSBC issued the remuneration report detailing the bonuses and layoffs, investors balked. Out of all of HSBC’s investors, 13.69 refused to back the report issued by the bank. They believed that the businesses practices were unfair and were unethical for the harsh economic climate around the world today.
At the shareholders meeting, executives sweated both figuratively and literally. The meeting was held on one of the hottest days of the year so far and executives were feeling the heat. With many rebellious investors in attendance, executives had to field questions about the bumper bonuses and employee layoffs.
As a part of the remuneration package, the bank rubber stamped an impressively large amount of bonuses. Just fewer than 192 staff members received £ 1 million in bonuses and awards. The chief executive officer of the company, Stuart Gulliver, obtained a total of £8 million. The 13.69 percent of investors fighting the remuneration report are enraged that while the bank is posting losses and layoffs, executives are still receiving high bonuses for performance that was not rendered.
Although the shareholders at HSBC protest the morals of the company, there is likely very little that they can do to stop the remuneration package. Recent court cases have upheld the right of employees to receive their bonuses. Even during times of financial duress, bonuses are a part of a company’s contractual obligations.