HSBC Holdings plc sprung a major surprise on financial markets by announcing the departure of its chief financial officer Ewen Stevenson, the former RBS CFO.
HSBC shares fell as much as 8%.
Stevenson, 56, told Reuters he was “looking forward to some time off and thinking about future options”.
HSBC announced that Georges Elhedery has been appointed its new chief financial officer from January 1, 2023.
The bank also said Greg Guyett has been appointed chief executive of its Global Banking and Markets (GBM) unit, effective immediately.
Stevenson will step down as CFO on December 31, 2022, and will leave HSBC in April 2023.
“Stevenson was undoubtedly seen as doing a great job amongst the investor community,” said John Cronin, analyst at Goodbody.
“His exit is most certainly a surprise and it smells of a fallout at the top management level in terms of direction of travel for HSBC – which will raise many questions.”
HSBC said: “HSBC has made significant changes over the last three years. It is now more efficient and more competitive.
“The leadership has repositioned the business by exiting underperforming and non-strategic portfolios, maintaining a tight grip on costs, and investing in areas of growth.
“HSBC is strongly committed to disciplined strategy execution, cost control and improving profitability. The bank is now well placed to accelerate its financial performance and deliver strong returns for shareholders.
“As the bank approaches the end of its three-year transformation programme, the board has taken the opportunity to review the composition of the group executive committee with a particular focus on long-term succession planning.
“As a consequence, and having considered the recommendation of the group chief executive, the board has approved the appointment of a new group chief financial officer and the consolidation of the leadership of Global Banking and Markets into one role.
HSBC CEO Noel Quinn said: “Georges is an exceptional leader with strong experience of leading a global business and a major geographic region.
“He has a track record of driving growth and managing change, and brings a strong focus on execution. He also has the necessary technical and strategic capabilities to take on the role of Group CFO and to continue the delivery of the board’s strategy.
“Greg has valuable experience both outside and, since late 2018, inside HSBC, and has done a great job leading Global Banking and Markets during Georges’ recent sabbatical. I’m delighted that he will be the CEO of Global Banking and Markets.
“I want to pay tribute to Ewen’s achievements and professionalism during his time with us and to thank him for his thoughtful and significant contribution to HSBC through a period of considerable change.
“He has been instrumental in materially repositioning the Bank’s strategy and performance, whilst also transforming the Finance function.
“He also helped drive our efforts to be a more inclusive bank on disability. We wish him all the best for his future career.”
Stevenson, a New Zealander, said: “It has been an absolute privilege to be part of the senior team leading a fundamental turnaround of the operating performance of HSBC over recent years.
“I would like to warmly thank my colleagues and friends who have made my time at the bank so fulfilling. I have strong confidence in the future of HSBC, and wish Noel, Georges and the rest of the senior leadership team well as they continue to deliver the strategy of the bank.”
On the financial terms relating to Stevenson’s departure, HSBC said: “Ewen Stevenson steps down from the board and as group CFO on 31 December 2022 and ceases employment with the company on 30 April 2023 (‘the Departure Date’).
“Mr Stevenson will receive a payment of up to £417,885 from the company in lieu of his base salary and pension allowance from the departure date until 25 October 2023, which is the date on which his notice period ceases.
“The payment in lieu of notice will be paid shortly following the departure date. He will also receive his fixed pay allowance in respect of the unserved notice period.
“Mr Stevenson will be eligible to be considered for an annual incentive award in respect of the 2022 performance year, subject to an assessment of the relevant performance measures and his contribution over the year.
“Any award will be disclosed in the directors’ remuneration report. Mr Stevenson will not be eligible for a Long Term Incentive (‘LTI’) award in respect of the 2022 performance year, or any annual incentive award in respect of the 2023 performance year.
“Mr Stevenson has been granted Good Leaver status, in accordance with the respective plan rules, in respect of the deferred awards and the LTI awards that he holds that are due to vest after the Departure Date.
“His Good Leaver status is conditional upon him not taking up a role with a defined list of competitor financial services firms for a year from his Departure Date.
“As a Good Leaver his deferred share awards will continue to vest and be released on their scheduled vesting dates, subject to the relevant terms (including post-vesting retention periods, malus and, where applicable, clawback).
“Any vesting of his LTI awards will be pro-rated for the period up to the Departure Date and will be subject to the relevant terms (including post-vesting retention periods, malus and, where applicable, clawback).
“In addition to the above, the vompany will make a contribution towards Mr Stevenson’s legal fees incurred in connection with his departure arrangements.
“In line with the Directors’ Remuneration Policy, Mr Stevenson will also be entitled to receive medical cover, tax and legal advice for a period of up to seven years from the departure date in relation to services provided to the company.
“Mr Stevenson will continue to be covered by the company’s D&O insurance and will benefit from an indemnity in respect of third party liabilities.
“Mr Stevenson will receive no other compensation or payment for the termination of his service agreement or his ceasing to be a director of the company or any other group company.”