HSBC, which has previously admitted it was considering salary rises across the board to tackle the limit on bonuses, has been discussing with its key investors ways of making quarterly payments of shares to keep up the level of its top bankers' pay.
The cap, which came into force on 1 January, bars banks from paying bonuses worth more than individuals' salaries, unless shareholders approve the payments, in which case they can be only twice the size of the salaries.
The rule is opposed by the chancellor, George Osborne, who is taking legal action against it, and by the Bank of England, which has warned it would push up the costs of running banks.
HSBC's chairman, Douglas Flint, said last year he was confident that the bank's shareholders would back any schemes that kept the bank competitive. Its staff will be subject to the bonus cap wherever they work in the world, while employees of US and Asian banks will only fall under the restrictions if employed in the EU.
HSBC, which would not comment, is proposing that the top bankers who receive the extra awards of shares will be required to retain them for five years after selling some to meet their tax obligations.
The plans to tackle the bonus cap are the latest to be exposed at a time when major banks across the City are preparing to award bonuses for 2013 – not affected by the limitations – starting with the US banks such as Goldman Sachs next week.
Barclays is preparing to hand monthly allowances to its staff – probably in shares rather then the initial proposal of cash. Other banks may yet attempt to opt for salary rises. The individuals affected by the bonus cap will be registered with local regulators and the European Banking Authority, which changed its definition last month of the bankers who are bound by the rules. In May it had proposed that anyone earning more than €500,000 (£425,000) would be subject to the cap but has changed this to allow banks to exempt staff earning up to €750,000 if they are not taking risks.
Shareholders of UK banks will be required to vote on the new pay plans at the annual meetings in the spring, including the bailed-out Royal Bank of Scotland, which will need approval of its proposals from UK Financial Investments – which looks after the taxpayer's 81% stake.
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