Georges Elhedery, the newly appointed chief executive of HSBC, could receive a maximum compensation package exceeding $18.7 million under a proposed remuneration plan being discussed with the bank’s largest shareholders.
HSBC’s remuneration committee is currently gauging investor sentiment on a potential restructuring of Elhedery’s pay, which would involve reducing his base salary while significantly increasing his bonus potential. If approved, the changes would raise his total compensation by nearly 43%.
The proposal, still under review, is expected to be presented for a shareholder vote at HSBC’s annual meeting in May. This move follows the UK’s recent decision to remove the EU-imposed bonus cap, which was introduced after the 2008 financial crisis to limit excessive risk-taking by capping banker bonuses at twice their annual salary.
According to reports first published by Sky News, the adjustments would raise Elhedery’s total potential earnings from approximately $13.1 million to over $18.7 million.
A French national, Elhedery previously held the position of HSBC’s chief financial officer before succeeding Noel Quinn as CEO in September 2024. Since taking the helm, he has swiftly implemented major changes, including a restructuring plan announced in October that would divide the bank’s operations geographically between eastern and western markets, resulting in significant job reductions.
In recent weeks, additional details of the restructuring have surfaced, revealing that HSBC plans to shut down parts of its investment banking division, specifically those involved in mergers and acquisitions and equity fundraising, across the UK, US, and Europe. The bank, which generates the majority of its profits in Asia, is expected to provide further details when it releases its full-year earnings on February 19.
HSBC’s proposed changes to its executive compensation align with similar plans by Barclays, which is also seeking to leverage the removal of the bonus cap. Barclays intends to offer its CEO, CS Venkatakrishnan, a lower base salary while increasing his bonus potential, bringing his maximum payout to an estimated $17.4 million.
A spokesperson for HSBC stated that while no final decisions had been made, the remuneration committee aimed to ensure that executive pay remained closely tied to performance and shareholder interests. The bank plans to release full details of the proposal alongside its financial results on February 19.