HSBC to double some junior banker bonuses in race for talent
[SINGAPORE] HSBC Holdings plans to as much as double bonuses for some of its junior investment bankers and traders in a bid to catch up with rivals on compensation.
The lender, which paid less than most rivals a year ago after cutting the bonus pool at its global banking and markets division by 15 per cent, wants to avoid losing junior staff to Wall Street firms who have been consistently raising pay, according to people familiar with the matter.
More senior employees are said to be in line for 2021 bonus hikes of at least 10 per cent, the people said, declining to be identified as the details are private.
A spokesman for HSBC declined to comment.
Speaking in an interview Bloomberg last month, Greg Guyett, co-head of GBM, said that HSBC was feeling the industrywide "upward pressure" on pay. "We've got to keep pay across the board competitive," he said.
His unit's headcount stood at 46,326 at the end of June, the most recent period for which a figure is available. In its third-quarter results, HSBC said that said that the company's overall expenses for the first 9 months of 2021 had risen 2 per cent year-on-year, in part as a result of the rise in performance-related pay.
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The firm recently raised pay and changed promotion pathways for junior staff in an attempt to address concerns about burning out early in their careers.
On bonuses, though, HSBC has been forced to justify cuts to unhappy investment bankers and traders.
Last year, chief executive officer Noel Quinn and his top lieutenants told staff that the pandemic, which scarred large parts of the global economy, had eroded the bank's overall performance, meaning it couldn't pay people more.
That contrasts with Wall Street peers that have been paying to keep staff from moving into sectors such as fintech and cryptocurrency. Goldman Sachs Group spent an average of 23 per cent more per employee last year, the biggest jump in more than a decade.
HSBC is due to report its full-year earnings next week. The bank is in the midst of a strategic overhaul that is designed to pivot its business increasingly toward Asia, where it makes the majority of its revenue and profit.
The bank has already relocated some of its senior management to Hong Kong. BLOOMBERG
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