HSBC deny group FD was a compromise candidate for chairman

HSBC has denied that group finance director Douglas Flint was a compromise candidate for the position of chairman, saying that the decision to appoint him was unanimous.
 
Moreover, despite "false and diabolical" leaks to the press that chief executive Michael Geoghegan, who has now resigned, had tried to blackmail the bank’s board by threatening to quit unless he got the position, he had behaved "impeccably" and had not thrown “his toys out of the pram”.
 
One senior source told the Independent: "Our selection process has been going on since March and we have considered external and internal candidates, but unanimously decided a few weeks ago that Douglas Flint, the finance director, should be the new chairman, and that with Stuart Gulliver, the new chief executive, they would be the dream team to lead the bank."
 
Once the decision had been made, Geoghegan was told and "reacted with the dignity you would expect," the source added.
 
"But, clearly, someone wanted to hurt Mike by leading the news,” the source continued. “We are deeply sorry about these damaging reports as he is a great guy and has done a great job during a difficult time. Mike understood totally that being chief executive no longer means automatically becoming chairman."
 
After 37 years with HSBC, which generally prides itself on seamless succession planning among its higher echelons, Geoghegan will receive a £1.42m gold goodbye package when he steps down in December. He will continue in an advisory capacity until 31 March next year for a fee of £200,000 that will be donated to charity, however.
 
Flint will replace current chairman Stephen Green, who is to become the new Trade Minister for the coalition government. Green said that the appointments of Flint and Gulliver, who will take pay cuts as a result of being on different incentive plans and receive £1.5m and £1.25m respectively, had obtained unanimous backing.
 
The statement followed reports in the Financial Times last week that Flint could be the compromise candidate for the chairman’s job because the board was struggling to make a decision between Geoghegan and John Thornton, a non-exec at the bank and former senior manager at Goldman Sachs.
 
The appointments will be confirmed by the board of directors in Shanghai this week, however, but have already been approved by the Financial Services Authority and the Hong Kong authorities.
 
Flint will be replaced as group finance director by Iain Mackay, former chief financial officer for Asia-Pacific, who will receive a £700,000 package.