HSBC is to issue tens of millions of pounds worth of new shares to pay its top staff their bonuses.
The new shares will be issued and immediately sold in the market to pay the cash part of senior executives' and bankers' bonuses to comply with the demands of regulators.
The Bank of England is demanding that banks increase their capital base to protect against future shocks rather than paying cash bonuses or dividends to shareholders.
By paying big cash bonuses through new share issues, HSBC will not have to pay bonuses out of its retained earnings, and so comply with regulators' demands to make itself stronger.
However, the move could prove controversial with shareholders because it means their investments would be diluted.
HSBC yesterday declined to comment on the move, but the amount of new shares to be issued will become clear when it issues its annual report alongside its results at the end of the month.
Shareholders have been taking an increasingly hard line on executive pay, and because this new way of paying the cash part of bonuses will directly dilute their holdings it could further heighten the pressure for bankers to moderate their demands.
The deferred element of bonuses will not be affected by the change.