HSBC increases bonus payouts in effort to compete with Wall Street

HSBC Boosts Bonuses for Top Investment Bankers

HSBC is increasing bonus payouts for its leading investment bankers in a bid to stay competitive with major US financial institutions.

Last year, senior staff in the investment banking division received average bonuses of $819,000 (£606,000), marking an 11% rise compared to 2024. The total bonus pool climbed by 10% to $3.9 billion, the highest figure recorded in over ten years.

Chief Executive Georges Elhedery commented, “We are fostering a culture that rewards high achievement. Our approach ensures that exceptional talent is recognized and compensated accordingly.”

Meanwhile, HSBC is reportedly adopting a stricter approach for underperformers, withholding bonuses entirely from staff who do not meet expectations—a practice common among US banks. Receiving no bonus, often called a “doughnut,” is considered a significant setback within the industry.

Restructuring and Cost-Cutting Measures

To drive performance and reshape the organization’s culture, Mr. Elhedery has implemented significant changes at the 160-year-old bank.

HSBC announced a 15% reduction in its managing director ranks over the past year, enabling the bank to achieve a £1.1 billion cost-saving target six months ahead of schedule.

Many of the job cuts resulted from merging the commercial banking, global banking, and markets divisions, which eliminated overlapping positions.

Mr. Elhedery, who earned £6.62 million in 2025 (up from £5.58 million the previous year), introduced plans last year to reduce payroll expenses by 8%.

Overall, HSBC’s workforce decreased from 221,000 to just over 218,000 employees. Despite this, total compensation and benefits increased from $20.2 billion to $21.5 billion.

Financial Performance and Strategic Focus

The bank reported a pre-tax profit of $29.9 billion for the year, surpassing analyst expectations of $28.9 billion, though this represented a 7% decline from the prior year.

HSBC’s share price climbed more than 5% on the FTSE 100 following the results.

Since assuming the role of chief executive, Mr. Elhedery has overseen a sweeping transformation of the bank. In addition to workforce reductions and business unit consolidations, he has intensified HSBC’s strategic focus on Asia, continuing the direction set by his predecessors.

The bank has exited certain operations in the US, UK, and mainland Europe, and has privatized its struggling Hong Kong subsidiary, Hang Seng Bank, aiming to capitalize on growth opportunities in the Asian market.

• Revenue in Hong Kong increased by 6% to $15.9 billion.
• The UK division saw a 5% rise in revenue, reaching $12.9 billion.