Bank looks at doubling salaries

HSBC is competing with pay boosts by rival banks. Photo / Glenn Jeffrey

HSBC Holdings, Europe's biggest bank, may double the base salary of some investment bankers after similar rises by competitors, says a person with knowledge of the plans.

While hundreds of bankers at HSBC's securities unit will get a rise in base pay, their total pay won't increase because bonuses will be cut, said the person, who declined to be identified because the talks are private.

London-based HSBC's global banking and markets unit employs about 22,000 people.

Banks including Barclays and Credit Suisse Group have increased investment bankers' salaries as a percentage of their total pay as regulators seek to curb bonuses and reduce risk-taking behaviour.

British Treasury Minister Mark Hoban said yesterday that firms should "think very carefully" about employee bonuses as Britons face the biggest public expenditure cuts since the aftermath of World War II.

British rules on compensation put HSBC at a disadvantage to United States and local banks in markets such as Brazil, India and China, said investment-banking head and chief executive-designate Stuart Gulliver.

HSBC was unable to recruit as many as 15 people to its investment bank in Hong Kong because it couldn't offer two-year compensation guarantees, he said.

HSBC is likely to spend about 25 per cent of its investment banking revenue on variable compensation this year, the same as the previous year, the person said. Officials at HSBC declined to comment. Sky News reported the decision last night.

- BLOOMBERG