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HSBC Is Said to Double Base Pay for Some Investment Bankers as Bonuses Cut
HSBC Holdings Plc, Europe’s biggest bank, may as much as double the base salary of some investment bankers following similar increases by competitors, said a person with knowledge of the plans.
While hundreds of bankers at HSBC’s securities unit will get a rise in base pay, their total pay won’t increase because bonuses will be cut, said the person, who declined to be identified because the talks are private. London-based HSBC’s Global Banking and Markets unit employs about 22,000 people.
Banks including Barclays Plc and Credit Suisse Group AG have increased investment bankers’ salaries as a percentage of their total pay as regulators seek to curb bonuses and reduce risk-taking behavior. U.K. Treasury Minister Mark Hoban said today firms should “think very carefully” about employee bonuses as Britons face the biggest public expenditure cuts since the aftermath of World War II.
U.K. rules on compensation put HSBC at a disadvantage to U.S. and local banks in markets such as Brazil, India and China, investment-banking head and Chief Executive Officer-designate Stuart Gulliver told reporters on a Nov. 5 conference call. HSBC was unable to recruit as many as 15 people to its investment bank in Hong Kong because it couldn’t offer two-year compensation guarantees, he said.
HSBC is likely to spend about 25 percent of its investment banking revenue on variable compensation in 2010, the same as the previous year, the person said. Officials at HSBC declined to comment. Sky News reported the decision earlier today.
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