At HSBC, questions over who exactly got 2024's bonus pool
There is some confusion at HSBC. Not only over how long the jobs preserved in the first round of cuts will continue, but also over bonuses and who received them.
Get Morning Coffee ☕ in your inbox. Sign up here.
As we've reported already, HSBC's 2024 bonus pool wasn't bad. At $3.8bn, the total bonus pool across the bank for last year was comparable to the pool for 2023. 535 material risk-takers (senior bankers and traders) in HSBC's investment bank received an average bonus of $747k each, down only 4% on 2023. This wasn't bad given that 2023 was their second-highest bonus since 2019.
Averages can, however, be misleading. Senior people at HSBC tell us their 2024 bonuses in fact seemed unusually low. Given that the bankers let go from HSBC's unwanted areas of equity capital markets and M&A businesses were paid no bonuses at all, people in the remaining debt capital markets (DCM) teams were expecting to be well-rewarded. This didn't happen.
HSBC declined to comment for this article, but sources at the bank say the bonus issue was raised in yesterday's town hall meeting with Michael Roberts, head of the corporate and institutional bank. Roberts was reportedly asked what happened to the bonus pool and allegedly responded that it had been partially diverted to pay new hires. He was also asked why HSBC has hired-in so many senior people (eg. from Citi) into senior roles, which sources say flatly denied. Roberts himself joined from Citi in 2019.
HSBC's managing directors are understood to be irked by Roberts' responses. "He effectively said that we've been working to subsidize the recruitment of new people," says one. "New hires should have been recruited using an investment budget, not our bonus pool."
HSBC's recent external hires include George Sun from BNP Paribas as head of Asia DCM, plus the likes of Mario Shamtani from JPMorgan and Venkat Vajipey from Citi in New York. The bank currently has a vacancy for a new head of UK global banking after the incumbent - who was hired from JPMorgan in 2023, moved internally.
People loyal to HSBC are questioning the merits of making senior external hires. The bank tends to attract people who are "from the beach or nearing the end of the road," said one senior insider last month.
As well as paying for new external hires, HSBC's UK and APAC DCM bankers suspect, too, that their bonuses may have gone to subsidizing people in the US. "We think that the exceptional variable pay went to people in New York this year," says one, adding that the way that deals are booked can make US revenues seem deceptively high. Deals originated in Hong Kong or Europe accrue to the US platform if a large Asian or European borrower is issuing bonds in an America. "It's important to pay attention to where the deal was originated," he says.
Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libellous (in which case it won’t.)
Photo by Clyde Gravenberch on Unsplash
