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HSBC Holdings Plc is cutting the base pay it offers some newly-promoted senior investment bankers in the UK by a quarter, ahead of a rule change that would allow higher bonuses.
In some areas, new managing directors are now typically offered a salary of about £225,000 ($273,380), compared to £300,000 paid to bankers that already hold the same position, people familiar with the matter said.
A spokesperson for the bank declined to comment. The lender’s decision comes as the British government plans to abandon bonus caps.
Variable pay is currently capped at two times salary for “material risk takers†under rules introduced almost a decade ago when the UK was a member of the European Union. A Bank of England study found that the cap led banks to restructure, rather than reduce, overall pay for staff in the region.
HSBC has said it expects the reforms to lead to a greater focus on variable pay.