Banker gives £4m bonus to charity

In times like these where there is so much angst against bankers for having pushed the world into its worst depression since the 1930s, a headline such as this one is bound to attract suspicion of ulterior motives rather than any feeling of goodwill. In fact there have already been murmurs of how this is a tax-saving move (albeit very wrongly) rather than any altruistic gesture.

But before we go down the path of motives, let us understand the facts – The Sunday Times reported last month (full story) that Michael Geoghegan, the chief executive of HSBC decided to donate his bonus of £4m to a number of children’s charities. He was rumoured to become the best-paid bank boss after a strong performance by HSBC which will see it report annual profits of £10 billion.

Unlike many other bank bosses who have foregone bonuses or are taking a pittance of a paycheck,

• Stephen Green, the HSBC chairman, asked to stop being awarded bonus payments last year. Green, who wrote a book last year on the morality and ethics of banking, has been one of the most vocal critics of pay practices in the industry
• Stephen Hester, chief executive at Royal Bank of Scotland has given up a £1.6m bonus
• Eric Daniels, chief executive of Lloyds Banking Group has given up £2.25m bonus
• Vikram Pandit, chief executive of Citibank has vowed to takes $1 as salary per annum till the bank recovers

Geoghegan decided to accept the bonus and channel it to Education Africa, a charity that specialises in supporting schools projects, mainly in South Africa. He and his wife Jania have been long-time supporters of this charity

For whatever the reason, whether to appease public resentment over high pay or bow to shareholder demands, we believe that Michael Geoghegan has shown the path for other high networth individuals. Rather than give up the bonus, he has channeled it for a useful social benefit.

The rest of the HSBC executive team is expected to share a bonus pool of up to £15m. Douglas Flint, the finance director is thought to be due for a payout of about £2.5m. Stuart Gulliver, the head of HSBC’s investment banking arm, is estimated to be in line for a bonus worth more than £3m. A handful of other top HSBC bankers below board level are expected to get multi-million pound windfalls. We wish all of them along with Mr. Hester and Mr. Daniels would follow Mr. Geoghegan’s example. Might help them to garner a few brownie points as well and provide their profession some much needed respectability.

We would love to hear on whether you think Mr. Geoghegan did the right thing and for the right reasons. Do you think he did it because he expected his salary to rise (which was subsequently denied by the shareholders) or to protect his job and respectability or was it a simple charitable gesture?

Do you think other high networth individuals should do the same and accept their bonus and channel it towards charity or give up their bonus itself? Do you think that they are giving enough or do you believe they need to give back more to society? Do you know of any more stories which you would like to share with us?