HSBC Shareholders Vote to Lift Bonus Cap

As reported by The Banker's Amalia Illgner, HSBC shareholders were set to vote on a proposal to lift the bank's bonus cap last week. While many supported the move, some have expressed concerns about increasing compensation with the bank's long history of culture and governance failures.

In November 2023, the UK repealed the limit on bankers' bonuses to a maximum of double their base salary. The cap was implemented in 2014 by the EU, at which time the UK was a member. Many executives argue that allowing for greater variable compensation will improve UK businesses' talent retention and economic competitiveness. "It will enable banks like HSBC to have greater flexibility over their cost base to deal with downturns," said Mardi MacGregor, a Partner at law firm Fox Williams. “In the longer term it could enable banks to reduce their fixed costs — their real fixed pay.”