HSBC's bigger bonuses: senior bankers got £620k last year, others got £12k

HSBC would like people to know that it's getting stricter about compensation. 

Bloomberg reported today that HSBC will - in future - be paying a higher proportion of pay as bonuses and a lower proportion of pay in salaries and that it will be phasing out its role-related allowances. 

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An HSBC spokesman informed us: “As a global bank, adapting our approach in this way strengthens our ability to pay for performance, better differentiate, attract the best talent, and recognise those who deliver the best outcomes for our customers, clients and stakeholders.”  

This should come as a shock to no one. HSBC already declared earlier this year that it would be paying its bonuses on an "eat what you kill basis" and senior people classified as material risk takers (MRTs) in HSBC's investment bank have already had their pay skewed towards bonuses as follows:

Salaries (fixed pay), including allowances, fell 7.5% to $584k (£441k) for MRTs in the investment bank between 2023 and 2025 according to HSBC's regulatory filings. Bonuses rose 6% over the same period to $819k (£620k). 

Bonuses could rise a lot more. Liberated from the bonus cap, HSBC has reserved the right to pay bonuses that are 10x salaries if it wants. However, there is little sign so far that a lot more senior people have received huge bonuses. Regulatory filings show that last year, the number of material risk takers earning over €5m (£4.2m) at HSBC fell to its lowest level since 2022. 

While HSBC is cutting salaries and promising bonuses aligned to performance for its top people, most employees at the bank seem to be having the opposite experience. Last year, the median amount of combined bonus, pension and non-salary benefits at HSBC in the UK was a mere £11.7k, which was down from £17.5k in 2023. The median salary at HSBC in the UK rose from £46k to £58k over the same period. Many of HSBC's UK staff don't work in the investment bank, though. 

As HSBC focuses on pay for performance in the investment bank, it is cutting various perks alongside the popular role related allowances which have the advantage of being paid no matter how well you do. It is doing so gently, though. HSBC's senior bankers will only get their allowances cut from 2028. HSBC's senior bankers in Hong Kong with six children will still get school fees paid if they work for the bank already - only new joiners will have to pay the school fees themselves. 

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