HSBC, Britain's largest bank, is the latest company at the centre of a controversy over directors' pay.

At a time when investors have become increasingly angry about executive remuneration, five directors at HSBC could share a £120 million jackpot over the next three years in a pay scheme that is to be debated at a shareholders' meeting this week.

Investor concern over HSBC's remuneration report comes the week after GlaxoSmithKline (GSK) said that almost 40 per cent of shareholders who attended its annual meeting either voted against the drug company's pay plan or abstained on it.

The Association of British Insurers has issued an “amber” rating to HSBC investors, indicating that there is concern over its pay report, while Pirc, the corporate governance adviser, is advocating a vote against the bank's scheme, calling it “excessive”.

Mike Geoghegan, HSBC's chief executive, would be the highest-paid director.

His basic salary is £1 million, but, under the new scheme, he could receive a bonus up to four times his salary and a long-term incentive plan that could be equivalent to seven times salary. This could mean a potential pay package of £12 million a year.

However, the bonuses would be awarded in full only if the directors hit tough profit performance targets and significantly beat City forecasts, the paper said. Shareholder sources indicated yesterday that the scheme was likely to be accepted.

Several shareholders at GSK's meeting spoke out against the pay of its executives and directors. They said it was excessive and not linked to the performance of the company's stock. Royal Dutch Shell has also been the subject of investor criticism over pay.

Knight Vinke, the activist investor with a stake in HSBC, will be at the bank's annual meeting on Friday at the City's Barbican Centre. Eric Knight, the asset manager's founder, has waged a long campaign against HSBC over aspects of its management and strategy.

The investor says that the pay scheme will encourage executives to use excessive borrowings, increasing risk for shareholders.

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