HSBC Introduces New Bonus System for Most Junior Employees ...
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Denise Wee, Bloomberg News
A HSBC Holdings Plc bank branch on Oxford Street in central London, UK, on Tuesday, Jan. 30, 2024. HSBC was fined £57.4 million ($73 million) by the UK for incorrectly excluding billions of pounds of its customers’ money from a depositor protection program. Photographer: Chris J. Ratcliffe/Bloomberg , Bloomberg
(Bloomberg) -- HSBC Holdings Plc is introducing a new bonus plan for most junior employees in support roles as it seeks to improve transparency on compensation.
Those staff will be given a figure called “on target variable pay,” which is set using external benchmark data from peers and internal pay data relating to those in similar roles at the beginning of every year, according to a memo seen by Bloomberg News.
“Target variable pay is being introduced this year for most grade 4-8 colleagues to ensure there is greater clarity and transparency on how performance impacts variable pay decisions,” an HSBC spokesperson said.
The new mechanism is a departure from the previous compensation plan, where most junior employees didn’t have specific bonus targets set. Bonuses for HSBC’s peers have so far been grim, with rising borrowing costs globally and risks of a recession in many parts of the world weighing on client activity. The headwinds are forcing many firms to look more critically at headcount, with Barclays Plc and Goldman Sachs Group Inc. among those that have reduced their workforce.
HSBC’s changes will apply globally to staff in so-called career bands four to eight, according to the memo, which can span mid-ranking managers to junior operations and branch staff.
Most front office bankers will likely keep their existing pay structure, which includes base pay and discretionary awards, a person familiar with the matter said. The person declined to be identified because the matter is private.
HSBC is due to announce bonuses for staff this week along with full-year results on Feb. 21. The UK lender had signaled in the third quarter it may increase variable pay by $300 million, resulting in higher expenses after a surge in third quarter earnings.
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