Are London execs fleeing the city for pay-friendlier pastures? New York take notice.
A few days ago Europe’s largest hedge fund firm decided to open an office for Geneva where any grade of employee could choose to relocate.
Hedge World: Europe’s biggest hedge fund firm Brevan Howard Asset Management told Reuters it is planning to open an office in Geneva, Switzerland, but said the move had nothing to do with an imminent rise in tax rates for top earners in the United Kingdom.
And today we have yet another sign of potential regulatory flight, this time to Asia.
HSBC says that chief executive Michael Geoghegan will relocate to Hong Kong from London. London’s venerable HSBC wants to run the company from the bank’s “largest and most important region.”
Still, one has to wonder whether the move might also have something to do with pay as well. Hong Kong provides far lower income taxes for high-earners, plus less regulatory risk when it comes to executive pay regulation. HSBC’s CEO will have far less to worry about and we believe could earn more on the same base pay as a Hong Kong resident. (We assume this is what they mean by “relocate”)
These two examples are only headline cases to highlight a point. At the micro-level, armies of business people are surely re-thinking their home base. While Geneva might be one option, Asia is a far larger one.
Hopefully the US and UK will realise that the world is a big place, and stop shooting themselves in the foot with executive pay politics.
WSJ: [Hong Kong’s] top political leader, chief executive Donald Tsang, called it “a significant move for the bank, which has its historical roots in our city.” “HSBC’s decision is a clear and timely ‘thumbs up’ for Hong Kong as a stable, reliable and vibrant base for the banking industry in the wake of the global financial tsunami,” Mr. Tsang said in his statement.