The boss of banking giant HSBC Holdings Plc is to be paid an extra 3.7 million Hong Kong dollars (485,000 US dollars) on top of his salary to compensate him for his move to Hong Kong, the bank's annual report showed.
Chief executive Michael Geoghegan is to receive the fixed sum, which does not include housing or travel allowances, on an annual basis in recognition of his relocation and the "additional cost of living" in Hong Kong, the report said. The payment was revealed in a footnote in the bank's annual report released in London on March 01.
It came on top of his salary of 13.4 million Hong Kong dollars and does not include his housing allowance, travel expenses and other living costs, which are reported to be another 5.8 million Hong Kong dollars. Hong Kong is known as one of the world's most expensive places to live with rents of luxury housing being some of the highest in the world.
Expatriates in the former British colony frequently enjoy lucrative pay packages with extra benefits to cover the higher costs and receive a low tax rate of 15 per cent. The tax rate is set to save Geoghegan around 4.7 million Hong Kong dollars a year compared with the rate in Britain, set at 50 per cent for high earners.
News of the extra allowances was expected to anger shareholders, given the bank's recent performance. According to a report by broadcaster Radio Television Hong Kong, a spokesman for the bank said the money was not a pay rise in disguise but was compensation for the disruption of moving his family to Asia and in recognition of his new additional responsibilities. Geoghegan, who took over as chairman of HSBC's Asia business in February, asked not to be considered for a bonus last year after the bank performed dismally.