HSBC trims pay for top bankers to $1.4m amidst ominous bonus rumours
If you work for HSBC's corporate and investment bank, and you're still employed next Monday, you could be in for a fine bonus round. If you're let go, it's possible that you will be in for a shock.
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HSBC's fourth quarter results today reveal that the bonus pool across the bank was $3.8bn for 2024, which was roughly consistent with 2023. $394m of this went to paying the bonuses of 535 material risk takers (top bankers, traders and control staff) in the corporate and investment bank.
When salary expenditure is added and total compensation is averaged per head, HSBC's spending on MRTs in the investment bank works out at an average of $1.4m (£1.1m) in total per head for 2024.
The chart above shows how this compares to the recent past. Average bonuses were down 4% last year for top people at HSBC's investment bank, to $738k.
These are averages, though. As HSBC cuts hundreds of people in its M&A and equity capital markets businesses, bonuses could be skewed to those who remain employed.
A senior source at the bank said that in the UK, at least, HSBC plans to pay zero bonuses to the bankers it lets go of this Friday. This has not been confirmed by HSBC, which didn't respond to a request to comment on the issue. "A lot of these people are not poor performers," the source observed.
If bonuses from HSBC people who are going are reallocated to HSBC people who are staying, survivors could be treated well. 100 fewer material risk-takers would imply average bonuses of $900k per head.
The senior source said HSBC will also pay reduced bonuses to people on its 'stay for now list', along with an incentive fee for the completion of their projects.
Profit in HSBC's investment bank rose 27% last year compared to 2023. Equities sales and trading revenues rose 60% thanks to wealth management clients and high volatility in the second half. The bank said today that it plans to spend $1.8bn on severance and other costs related to the restructuring between now and 2026.
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