HSBC bowed to shareholder pressure on a key element of its executive pay plan yesterday, although it refused to back down on contentious proposals to reward top bosses with cash bonuses of up to four times their salaries.

Knight Vinke Asset Management, the activist investor that has agitated for reform in HSBC for the past year, claimed a partial victory but vowed to press on with attempts to convince the bank to dump its US business.

Eric Knight, a partner in Knight Vinke, said: “It’s a victory in some sense for shareholders but we’re by no means at the end of the road.”

Today Knight Vinke will publish on its website further correspondence with Simon Robertson, the bank’s senior independent director, on a number of issues, including HFC, HSBC’s troubled American operation. Knight Vinke also wants HSBC to concentrate more heavily on emerging markets.

Yesterday the bank published the agenda for its May 30 annual meeting, including resolutions on changes to the long-term incentive scheme for HSBC executives. The way that it calculates important performance measures is a sensitive subject for the bank after it was accused of misleading shareholders over the earnings per share (EPS) figures in its most recent incentive scheme.

HSBC said in its annual report this month that it regretted “if there has been any misunderstanding” over the EPS issue.

In a consultation document issued to its biggest shareholders in January, HSBC proposed increasing the potential cash bonus available to its top management from 2.5 times to 4 times salary, as well as changing the way in which performance was measured.

The agenda showed yesterday that HSBC would continue to award executives up to 700 per cent of their salary in shares as a bonus. But it also revealed that HSBC had conceded to investors’ demands to move to a simpler method of calculating total shareholder returns (TSR), a performance benchmark it uses to set executive bonuses.

Mike Geoghegan, the HSBC chief executive, received £3.5 million in salary and bonuses last year, up from £2.8 million a year earlier, plus £414,000 in share awards that vested during the year. Stephen Green, the chairman, was paid £3 million and £1 million from shares vesting.

Mr Knight said that TSR was “the thing that most shareholders are interested in” and welcomed the simplification. But he said that targets set by HSBC for its executives were “still ridiculously low”.

Among other changes, HSBC has also introduced five emerging markets banks into the peer group against which it assesses its performance, including Bank of China and the Industrial and Commercial Bank of China.

However, members of the peer group will be weighted according to their freely floated shares, which means the closely held Chinese banks will make up only a small portion of the comparison. But Mr Knight said that this weighting skewed the measurement so that HSBC was more heavily compared with Bank of America, with which it has little in common, rather than the fast-growing Asian banks that compete in the same markets as HSBC. The investor said: “The measurement of performance is still against the underperforming elephants.”

HSBC rejected criticism of its incentive scheme. A spokesman said: “These changes reflect a perfectly standard review of our operations and benchmarking against our major competitors. We believe that the new scheme reflects what our investors want and sets tough targets for our executives.”

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