HSBC boss paid $3.7m to move

Hong Kong - The boss of banking giant HSBC is to be paid an extra $3.7m Hong Kong dollars ($485 000) on top of his salary to compensate him for his move to Hong Kong, the bank's annual report released this week 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 Monday.

It came on top of his salary of HK$13.4m and does not include his housing allowance, travel expenses and other living costs, which are reported to be another HK$5.8m.

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%.

The tax rate is set to save Geoghegan around HK$4.7m a year compared with the rate in Britain, set at 50% 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 spokesperson 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 chairperson of HSBC's Asia business in February, asked not to be considered for a bonus last year after the bank performed dismally.

- Sapa