HSBC slashed bonuses for its top investment bankers by 11% last year but nearly doubled severance pay for unit executives as the UK lender reshaped its business with sweeping job cuts jobs.
The bank paid $611.6 million to 541 senior investment bankers known as Material Risk Takers, a group of top employees who influence the bank’s risk profile. The Bank of England has asked UK lenders to hold back on bonus payments for its senior executives this year as the Covid-19 crisis hit the economy.
The bank’s average MRT bonus payout at its investment bank was around $497,000, the bank disclosed in its annual accounts, down 11% from the average of $559,000. dollars paid to the group last year. Overall pay remained stable at an average payout of around £1.1m.
The number of people entering this group of top investment bankers also fell 7.5% as the bank unveiled plans to cut 35,000 jobs as part of a transformation program that will see the bank relocate its operations. to Asia.
HSBC’s overall bonus pool fell 20.4% to $2.7 billion, with payouts biased towards Asia as the region’s performance outpaced other parts of the world.
HSBC awarded 38 people at its investment bank $36.6 million in severance pay, up 84% from a year earlier. A banker leaving the company received $7.3 million, while the highest payout in 2019 was $3.1 million.
READ HSBC London bankers brace for job cuts amid Asian change: ‘There are a lot of middle managers in the UK’
Bonus payments from UK lenders are coming under increased scrutiny this year after regulators urged caution, despite rising investment banking revenues. In March, the Bank of England asked UK lenders to stop paying dividends and cash bonuses to their senior executives, including major risk takers. In a December update, the regulator said it expects banks to exercise a “high degree of caution and prudence” on variable pay for 2020.
READ HSBC plans $6 billion investment in Asia as profits fall 34%
Barclays has raised the average senior executive bonuses of the unit housing its investment bank by 14% to around £636,000, Financial News reported. NatWest Group paid £60m to a handful of top employees in its sales and trading division, even as it posted a loss for the year 2020.
HSBC also paid 1,149 people over €1 million in 2020, broadly in line with the previous year.
To contact the author of this story with comments or news, email Paul Clarke