HSBC forced to forfeit £1m of bonus over miss-sold insurance

HSBC has recently been involved in one of the most significant episodes of insurance miss-selling and this has meant that the head of the bank has been forced to forfeit over £1 million of his yearly bonus.

Stuart Gulliver previously received a financial reward but he has recently been stripped of some of it by the bank as a gesture of remorse.

The amount is relatively small when you consider that his entire salary and bonus package come to well over £7 million. He’s been awarded such a generous bonus because the bank has been very profitable and has made £14 billion of profit in the last year alone.

Critics have however welcomed the move for the money to be taken back off the head banker and they have encouraged other banks to do the same with their Chief Executive’s. Other critics have pointed out that the amount of money being taken off them is not really going to put too much of a dent in their overall pay packages.

The five highest-paid banking staff at HSBC received an average bonus package of nearly £6 million each. Nearly 200 members of staff at the bank are set to take home over £1 million each this year. The miss-selling has been of payment protection insurance and HSBC is not the only bank to have been caught up in the controversy. Payment protection insurance is a way to maintain repayment of a loan if you become redundant or ill.

The High Pay Centre chairman is Deborah Hargreaves and she has commented, “It’s great to see that people are taking action against the bankers responsible for this miss-selling. The only problem is that the amount of money actually being taken away from them is not that significant.”

The executive director of the consumer group, Which? has commented, “The fact that HSBC have taken away this money is going to add pressure for other banks to do the same. They are setting a good example”.