HSBC hikes bonuses for its top investment bankers

By Paul Clarke

HSBC paid its top investment bankers an average bonus of $771,700 last year, an increase of 15% as the UK lender posted record profits and hiked variable remuneration across the bank.

The UK lender paid $392m in bonuses to its 508 so-called material risk takers within its investment bank - a group of top employees whose actions could impact the risk profile of the bank - compared with $368.6m a year earlier, while the number of these staff in the division declined.

This works out as an average payment of $771,700, up from $672,000 payout for performance in 2022, but still lower than the $810,000 a year earlier.

Overall, HSBC (UK:HSBA) (HSBC) spent $712.7m on pay for its MRTs within its investment bank last year, or an average payout including salary of $1.4m. This is up from the $1.3m it shelled out a year earlier.

HSBC posted record annual profit of $13.3bn for 2023 and has paid its staff generously. The overall bonus pool awarded for 2023 of $3.8bn was up by 12% compared with a year earlier. Meanwhile, chief executive Noel Quinn was paid $10.6m, up from $5.6m in 2022, largely as a result of him receiving over $5m in long-term incentive awards.

At HSBC, 512 people were paid over EUR1m, up from 473 a year earlier. One employee of the bank was paid over EUR12m for last year, whereas a single employee earned over EUR11m in 2o22

Barclays (UK:BARC) maintained bonus payments for its MRTs working within its investment bank at GBP642,100 ($810,600), which was in line with a year earlier, despite a 3% decline in overall variable payments for staff. Its top employees within the unit earned an average of GBP1.3m for the year

Meanwhile, NatWest (UK:NWG) paid its MRTs an average of GBP444,679 last year, according to its annual report published on 16 February, up by around 2.5% on average payments for both salary and bonuses in 2022.

Banks have taken the axe to bonuses this year, with Morgan Stanley (MS) and Citigroup (C) revealing the biggest drops for dealmakers of 15% and 20% respectively. Dealmaking declined by 15% compared with an already moribund 2022 and M&A bankers were predicted to receive bonuses up to 25% smaller, according to estimates by Wall Street compensation consultants Johnson Associates.

This story originally appeared at FNLondon.com

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02-21-24 0458ET

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