HSBC considers CEO pay overhaul as UK banks dump bonus caps

HSBC Holdings (0005) is considering halving the fixed pay of its new chief executive Georges Elhedery after the UK changed its rules to allow a higher proportion of remuneration to come from variable performance awards.

The London-headquartered bank could hand Elhedery a package worth as much as £15 million (HK$144.7 million) under a fresh plan that is being discussed, a person familiar with the situation said, asking not to be identified before a public announcement. Sky News first reported the details of the new awards.

Elhedery currently receives a base salary of £1.38 million as well as an additional fixed pay allowance worth £1.7 million. On top of this, he is entitled to an annual incentive worth a maximum of 215 percent of his base salary and a long-term award worth as much as 320 percent of his salary. Together with a pension allowance, Elhedery’s current package is valued at a maximum of about £10.6 million a year.

“While no decisions have been taken, the remuneration committee’s objective is for the pay outcomes for our executive directors to be strongly aligned with performance and shareholders’ interests,” a representative for HSBC said in an emailed statement.

The lender will publish details of the compensation along with its year-end results on Feb. 19, according to the statement.

Britain had earlier effectively limited banker bonus payments to twice the base salary, in line with European Union caps first introduced in 2014 in response to public outcry over the global financial crisis. In late 2023, UK officials removed those curbs as part of a broader push to make post-Brexit Britain more attractive as a financial center.

Many other banks operating in the UK, including Barclays, Goldman Sachs Group and JPMorgan Chase & Co. have been ditching those limits and overhauling executive pay after the rule changes.

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