HSBC is banking on shareholder support for its relatively strong recent performance when it proposes a potential three-year £120m bonus pay-out for five directors at its annual meeting this week.

The cash-and-shares payout would be awarded in full if the bank beats the profit targets which the City has been guided to expect.

Mike Geoghegan, HSBC's chief executive, stands to earn £18m a year from a bonus up to four times his £1m salary and a long-term incentive plan (LTIP) that could be equivalent to seven times salary.

If the bonus pays out, it would put Geoghegan in second place in the FTSE-100 league of top earners, behind Bart Becht, chief executive of Reckitt Benckiser, who last year took home £22m.

The corporate governance group PIRC is recommending that shareholders vote down the scheme, which it calls "excessive". The Association of British Insurers has issued an "amber top" alert to investors, reflecting concern rather than alarm over the proposal. One institutional shareholder, however, was reported as saying yesterday: "The bank is performing and if the targets are reached, it will be great for everyone."

Knight Vinke, the rebel investor which has been waging a long campaign against HSBC, argues that the remuneration scheme could encourage executives to use excessive borrowings to meet targets. It says the 5.1% annual target for earnings per share is too low.

The bank notes that its LTIP failed to pay out in 2003 and 2004, while in 2005 it paid out only 50%. It says the new package is designed to align HSBC, fifth-largest bank in the world, with its global banking peers.

Knight Vinke will also renew its call for the bank to exit from the US, where it has racked up a $15bn (£7.5bn) bad debt provision in the past year.