HSBC's Top Investment Banker Bonuses Fall 11% as Job Cuts Take Hold -- Financial News
By Paul Clarke
Of Financial News
HSBC Holdings PLC cut bonuses to its top investment bankers by
11% last year, but nearly doubled redundancy payouts for executives
in the unit as the U.K. lender reshaped its business with deep job
The bank paid out $611.6 million to 541 senior investment
bankers known as material risk takers, a top group of employees who
influence the risk profile of the bank. The Bank of England has
told U.K. lenders to show restraint on bonus payments for its
senior staff this year as the Covid-19 crisis has hit the
The average bonus payment for the bank's MRTs within its
investment bank was around $497,000, the bank revealed in its
annual accounts--a reduction of 11% on the $559,000 average paid to
the group last year. Overall compensation remained flat at an
average payment of around 1.1 million pounds ($1.5 million).
The number of people falling into this group of top investment
bankers also fell by 7.5% as the bank unveiled plans to cut 35,000
jobs of part of a transformation program that will see the bank
shift its business toward Asia.
HSBC's overall bonus pool dropped by 20% to $2.7 billion, with
the payments skewed toward Asia as performance in the region
outstripped other parts of the world.
HSBC awarded $36.6 million to 38 people within its investment
bank in severance awards, up by 84% on the previous year. One
banker leaving the firm received $7.3 million, whereas the highest
such payment in 2019 was $3.1 million.
U.K. lenders' bonus payments are under increased scrutiny this
year after regulators called for prudence, despite investment
banking revenues surging. In March, the BOE told U.K. lenders to
stop paying dividends and cash bonuses to their senior executives,
including material risk takers. In a December update, the regulator
said it expects banks to exercise a "high degree of caution and
prudence" on variable compensation for 2020.
Barclays PLC increased average bonuses for senior executives in
the unit housing its investment bank by 14% to around GBP636,000,
Financial News reported. NatWest Group PLC paid GBP60 million to a
handful of top employees in its sales and trading division, even as
it posted a full-year loss for 2020.
HSBC also paid 1,149 people over 1 million euros ($1.2 million)
during 2020, which was broadly in line with the previous year.
(END) Dow Jones Newswires
February 23, 2021 04:51 ET (09:51 GMT)
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