Does exposure to subprime risk make HSBC execs sick?
Exactly a year ago, we footnoted about how HSBC (HBC), which was just starting to feel the heat from the subprime mess, was still plenty generous when it came to handing out perks to its top executives. Judging by the 10-K they filed earlier this week, little has changed in the past year across several of the bank’s units, even though Finance Director Douglas Flint said this week that the turnaround might not happen until 2009. While the banking giant took a nearly $12 billion impairment charge related to loans in the U.S., it still managed to report a 21% increase in profits, mostly on the strength of its business in Asia.
But it’s the list of perks that is truly impressive. HSBC USA CEO Paul Lawrence, who was tappped to lead the bank last February, received $288,681 for a housing allowance. He was closely followed by the $277,232 that Chief Operating Officer David Dew received for his housing. Over at HSBC Finance (HTB), formerly known as Household Finance, which also filed their 10-K this week, two top executives also got hefty housing and furniture allowances: $172,310 for CEO Brendan McDonagh and $146,261 for COO Niall Booker.
Perhaps even more interesting is the amount of money that several executives received for reimbursement of physical exams: over $14,000 for former HSBC USA CEO Sandra Derickson and over $11,000 for General Counsel Janet Burak. Oddly enough, former CFO John McKenna, who one would think was likely to have the most anxiety from the subprime mess, spent well under $1,000 on this perk.
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March 19th, 2008 at 11:46 am
This clearly shows a total lack of concern with regards to customers and homeowners. HSBC was a large factor in creating the sub prime mess. The Household/HSBC frame of mind was to get out and shaft as many customers as possiable. It has in many respects skirted US lending laws, purchased mortgages from smaller mortgage lenders and brokers that were either written knowing the customers would be unable to pay or that the loans failed to meet minimum federal requirements, failed to comply with TILA, RESPA and HOPA rules.
Now that the FBI is begining to look at these companies, it is hoped that not only will someone go to jail, but many homeowners will be able to save their homes from these crooks. HSBC has a very poor record of customer service, lies, makes broken deals with customers, flauts US laws and the CEO even had the nerve to make the following statement.
“…This company is a British owned company and the head of the company made the statement that how he runs his company is his business. He is not afraid of the FBI, Attorney Generals, American Courts, etc. and he will continue to operate as he pleases in our country and there is nothing they can do about itâ€
THis statment coupled with the corporate greed of american executives reaping untold benifits at the expense of the american consumer and homeowners needs to be tared and feathered and then sent packing or to jail. I hope that any customers that have information regarding this company contact the FBI and assist in bring this company down. With regards to HSBC it is time that we americans have another tea party.