HSBC CEO Threatens to Quit if Not Promoted
Michael Geoghegan, chief executive of HSBC, has threatened to resign from his job if he is not elevated to the chairman’s role, according to two people familiar with the bank’s succession planning.
At a meeting last week Mr Geoghegan reacted badly to the suggestion that he might be passed over, one of the people said. “He was told the board was not ready to give him the chairmanship and he was not happy.”
HSBC is set to decide at a board meeting next Tuesday who should replace Stephen Green, who is stepping down as chairman at the end of the year to take up a UK government job as trade minister.
Executives at the bank said Mr Geoghegan would be unhappy to see another chairman appointed over the top of him, particularly the favourite for the job, ex-Goldman Sachs banker John Thornton. HSBC has a history of elevating its chief executive to chairman.
It remains unclear who the bank will ultimately pick for the role of chairman, with Douglas Flint, finance director, also in the running, according to bankers. Simon Robertson, the non-executive who is leading the succession process, has also been mooted as a solution, although that would almost certainly force him to give up his chairmanship of Rolls-Royce.
If Mr Geoghegan did resign, the favourite to succeed him as chief executive would be Stuart Gulliver, currently the investment bank boss.
However, people close to Mr Geoghegan said he might well not follow through on his threat to leave. “He has a famously hot temper,” said one. The final decision about the succession is due to take place at a board meeting in Shanghai next Tuesday.
Mr Geoghegan, who moved his job to Hong Kong early this year, wanted to be made chairman, based there. People close to him said his ideal scenario would have been for Mr Gulliver to be appointed as a London-based chief executive.
HSBC has emerged healthier than many other banks from the financial crisis, largely because of its focus on emerging markets, particularly Asia. But now the pressure is on for it to make the most of that strategic positioning and shake off its reputation as a lumbering giant.
It has pledged to grow by selective acquisition and is midway through a deal to acquire South Africa’s Nedbank valuing the bank at about £7 billion ($11 billion).