HSBC to rejig bonus payments

HSBC is to overhaul the way it pays bonuses to UK staff following
pressure from regulators to hold onto more of its profits, it was
reported today.

The bank is to fund the cash part of any bonuses greater than £50,000 by issuing new shares and selling them to raise money, meaning that its capital reserves will not be depleted by the payments, according to Sky News.

The bank, which will report full-year results on Monday, is to issue tens of millions of pounds worth of new shares, which will allow it to make pay-outs to UK staff without jeopardising its financial security.

Bank of England governor Sir Mervyn King and Financial Services Authority chief executive Hector Sants have recently called on banks to reduce the cash they pay out to staff and investors.

Instead, they want banks to hold on to their money to help shore them up against any future financial crises.

Similarly, leading shareholder groups such as the Association of British Insurers, have urged banks to rebalance the sums paid to bank employees and owners.

PA