HSBC's new man set to make $60m

HSBC risks a shareholder backlash after it emerged that the banking giant is to pay one of its directors almost $60 million (£37.5 million) in a deal that dwarfs the controversial packages handed to Barclays chief executive Matt Barrett and several directors of Abbey National.

US executive William F. Aldinger III, appointed to the HSBC board last Friday, was formerly chief executive and chairman of Household, the North American mortgage lender which HSBC acquired at the end of last year.

His appointment to HSBC's board triggered a termination clause on his Household contract that means he is now eligible for a $20.3m fee. In addition, the small print in his contract reveals that, over the next three years, Aldinger is set to receive:

· A basic annual salary of $1m;

· An annual bonus of $4m;

· Benefits valued at $518,000;

· A one-off award of $10m worth of HSBC shares;

· A further $5.5m shares after his first anniversary at the bank;

· A further $5.5m shares after his second anniversary at the bank. The total comes to just over $58m.

Shareholders were aware that Aldinger's package would run into tens of millions of pounds, but few knew of the termination clause.

An HSBC spokesman last night said: 'William Aldinger is a talented executive with huge experience in consumer finance. We want to retain his services to ensure the continued success of the business. The agreement we have with him is not out of line with what is paid to other US executives.'

The figure dwarfs the £2.17m that chief executive Keith Whitson was paid in 2001. Corporate governance experts expressed concern last night at the deal. 'UK companies will have us believe that this remuneration in the US is acceptable. But this is no longer the case. There have been massive outcries against these sort of packages in the US,' said Sarah Wilson, managing director of Manifest, the proxy voting agency and corporate governance specialist.

'This is shareholders' money and people need to be more prudent in what they do with it,' Wilson added.

Last week almost 30 per cent of Barclays' shareholders failed to approve the remuneration terms for Barrett. They were angered by a 'golden parachute' clause in his contract entitling him to twice his total annual pay if the bank is taken over. At Abbey National's AGM shareholders attacked payoffs totalling £6m to five directors who quit last year as the bank racked up losses of £984m.

Aldinger's contract says HSBC should pay all future medical and dental bills for him and his wife if his contract is terminated.