HSBC Holdings is considering halving the fixed pay of its new Chief Executive Officer Georges Elhedery after the UK changed its rules to allow a higher proportion of remuneration to come from variable performance awards.
Elhedery currently receives a base salary of £1.38 million (HK$13.3 million) as well as an additional fixed pay allowance worth £1.7 million. He is also entitled to an annual incentive worth a maximum of 215 per cent of his base salary and a long-term award worth as much as 320 per cent of his salary. Together with a pension allowance, his package is valued at a maximum of about £10.6 million a year.
The London-headquartered bank could hand Elhedery a package worth as much as £15 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. While his fixed pay would be roughly half what it currently is, his potential bonus would be much higher, the person said.
“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 a statement.
The lender will publish details of the compensation along with its year-end results on February 19, according to the statement. HSBC is in the midst of a broad revamp, which has seen the exit of many top executives and the winding down of some of its investment banking operations in Europe and the Americas.
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 centre.
Many other banks operating in the UK, including Barclays, Goldman Sachs and JPMorgan Chase have been ditching those limits and overhauling executive pay after the rule changes.
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