HSBC reinstates pay freeze: No senior managers in retail or investment banking will get pay rises in 2016

HSBC Holdings plc (LON:HSBA) has taken a decision not to increase salaries for senior management across its retail and investment banking divisions. London-based HSBC, whose market share in the interbank FX sector is among the highest, the firm having the largest share of the market for corporate clients for the first time in 2015, ending […]

HSBC Holdings plc (LON:HSBA) has taken a decision not to increase salaries for senior management across its retail and investment banking divisions.

London-based HSBC, whose market share in the interbank FX sector is among the highest, the firm having the largest share of the market for corporate clients for the first time in 2015, ending Citi’s 39 year uninterrupted reign, has experienced declining revenues and has been considering uprooting its operations from Canary Wharf in favor of urbane and cash rich Hong Kong.

Share prices in HSBC stock have collapsed, along with those of other major banking institutions of Europe, most of which form the lion’s share of interbank FX dealers, handling the majority of global FX order flow.

Last week, HSBC made the decision to remain in London and has shelved its plans to make the move to the Far East, however the firm, along with compatriots Royal Bank of Scotland, Barclays, Standard Chartered and Citi have all made considerable efforts to focus their business on the Asia Pacific region with its entrepreneurial, sophisticated and revenue-generating population being a diversion from flagging Europe which is mired in financial crises and geopolitical issues.

With this new initiative to freeze pay rises, the majority of senior management within the retail and wealth management group at HSBC’s UK operations will not receive an increase in their remuneration this year, despite the bank having recently gone back on a policy that was intended to enact a pay freeze.

The third amendment to HSBC’s remuneration policy within just three weeks will dictate that junoior level staff within the retail and investment banking divisions will receive a payrise this year, but managers will only receive pay increases on a selective and meritocratic basis.

Last year, FX traders in London hung onto their positions at Barclays despite the bank’s flagging corporate performance, the bank at the time faring worse on the balance sheets than HSBC or RBS. The reason that the traders preferred to remain at Barclays was due to the firm’s more generous remuneration packages compared to those offered at more conservative HSBC and RBS.

Those receiving no pay rises at all are the company’s top level management, who will not have their remuneration increased at all, regardless of performance.

According to many mainstream reports, the selective and meritocratic pay rises which may apply to middle management will be few and far between in that 80% of middle management will not meet the standards that would make them eligible for a pay increase.

In order to make provision for pay increases for junior level staff, HSBC is using a bonus pool that was intended for bonuses in 2017 will be used to fund the pay increases in 2016, and a hiring freeze which began in the last quarter of 2015 will remain in place.

 

Read this next

Retail FX

Capital Index UK reports mitigated loss despite revenue drop

FCA-regulated brokerage firm Capital Index (UK) Limited has released its annual financial report for the year 2022.

Digital Assets

Mike Novogratz’s Galaxy Digital expands in Europe

Galaxy Digital, the New York-based cryptocurrency financial services company founded by Mike Novogratz, is expanding its presence in Europe by appointing Leon Marshall as its first European CEO.

Metaverse Gaming NFT

Turingum Partners with MarketAcross to Drive Web3 Adoption in Global and Japanese Markets

Global blockchain PR leader MarketAcross joins forces with Japanese Web3 specialist Turingum to mutually expand its market reach, aiming to fortify Turingum’s worldwide footprint and MarketAcross’s presence in the lucrative Japanese blockchain landscape.

Digital Assets

Binance to delist all stablecoins in Europe next year

During a public hearing with the European Banking Authority (EBA), an executive from Binance said that the exchange could ultimately delist stablecoins from its European platforms by June 30, 2024.

Industry News

“Unconscionable conduct”: ASIC fines National Australia Bank $2.1m for overcharging customers

NAB faces a $2.1 million penalty for unconscionable conduct, as the Federal Court rules the bank knowingly overcharged customers, and took over two years to rectify the situation.

Industry News

SEC charges $15 million Ponzi scheme targeting Mexican-American community

Armando Gutierrez Rosas purportedly intended to invest these funds in U.S. real estate and mining operations in Mexico, assuring investors of monthly returns as high as 10 percent. Instead, Gutierrez operated a Ponzi scheme, diverting investor funds to cover his personal expenses, which notably included the acquisition of a $2.5 million mansion in Texas.

Digital Assets

Chainlink launches cross-chain interoperability protocol on Arbitrum One

Chainlink and Arbitrum join forces to bring the Chainlink Cross-Chain Interoperability Protocol (CCIP) to Arbitrum One, offering Web3 developers a powerful tool to build secure and interconnected applications across blockchains.

Executive Moves

STT appoints Brian Saldeen as Senior Risk & Margin Product Manager

Sterling Trading Tech welcomes Brian Saldeen to spearhead the development of their Risk & Margin offering, bolstering their cutting-edge solutions in the capital markets.

<