Morning Coffee: HSBC’s horrible bonuses have come back to haunt it. Hedge fund manager’s long-suffering wife
A few weeks on from the HSBC bonus round that cut the average bonus for the bank's material risk takers by 11% and reduced the number of HSBC people earning over €1m ($1.2m) from 420 to 324, it seems there's still some fuss about the outcome.
Bloomberg reports that Georges Elhedery and Greg Guyett, co-heads of the banking and global markets division (the investment bank), last week participated in staff calls to explain why the bonuses were so mediocre. Noel Quinn, HSBC's CEO, was on the line too.
The problem, they said, was that the bank's overall performance had been eroded by the pandemic, plus the economic situation wasn't great. For this reason, even people who had performed excellently received a bonus cut.
None of this is likely to have been particularly palatable to HSBC's fixed income traders in particular. - Credit trading revenues at the bank were up 90% on 2019, rates revenues were up 20% and FX revenues were up 26%. In the circumstances, a reduced bonus to compensate for greatly diminished profits in the wealth and personal banking and commercial banking divisions seems a bit unfair.
It could be worse, though. Bloomberg notes that HSBC doesn't pay any bonuses at all to people whose jobs it cuts. - Once an individual has been informed that he or she is going, the bank's contracts say it has no obligation to pay the bonus even if they're still employed on the date of payment. This is standard practice for banks based in London, but if you work for HSBC it's easy to see why you might feel a bit disincentivized as a result. - The bank still has 24,000 of its 35,000 job cuts still to go. Why work hard all year for the prospect of a reduced bonus irrespective of performance, or no bonus at all if the bank decides to chop you the day before it hits your bank account?
Separately, British hedge fund manager Crispin Odey was yesterday cleared of indecently assaulting a female banker in 1998 when she was 26 and he was 39. "I find you not guilty of this offence. I acquit you, and you will leave this courthouse with your good character intact,” the judge told Odey as he delivered the verdict.
This may be so, but for women everywhere Odey's behaviour in his marriage still seems a bit reprehensible. The hedge fund manager acknowledged during the trial that he'd hoped the encounter would "end up in bed." At the time, his wife, who was pregnant was reportedly away with their young children and Odey didn't want a "lonely" evening. The court was told that the "horrible slur" of the assault allegation has caused problems in Odey's ongoing 30 year-marriage, but they might also have something to do with attempted infidelity while his wife was pregnant with his child...
Crispin Odey was a doyen of London's clubs and restaurants and a devotee of the two-bottle lunch. (The Times)
Blackstone is increasing the size of its office in Manhattan's Park Avenue by nearly 13%. (Bloomberg)
Nomura wants to hire EMEA bankers covering sectors like business media and technology. (Financial News)
BNP Paribas generated five times more revenue from its fixed income, commodities and currencies business than it did from equities and prime broking services last year. It's trying to change that with its purchase of Exane. (Financial Times)
BNP Paribas is expanding in equities after other banks pulled out. Deutsche and Commerzbank closed (are closing in the case of Commerz) their equities business, HSBC and Maquarie made big cuts. (Financial News)
Family offices can be highly idiosyncratic but if you find one you like you could stay there for decades. (Famcap)
Even young girls are less likely to negotiate (for more stickers) when the negotiations are with a male. (BPS)
Even interns at security camera startup Verkada could peer through the cameras of customers, including global corporations, schools and police departments. "We literally had 20-year-old interns that had access to over 100,000 cameras and could view all of their feeds globally.” (Bloomberg)
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