Britain's biggest bank, HSBC, is expected to reignite the debate over the European Union bonus cap by revealing that its top bankers – including chief executive Stuart Gulliver – are to be awarded share payouts to compensate them for any potential reduction in income caused by the EU's new rules.
Gulliver's pay for 2013, including bonuses on top of his £1.2m salary, is expected to top £7m. The bank will also publish its bonus pool for its 200,000 workforce around the world when it reports its profits for last year.
On Thursday, the bailed-out Royal Bank of Scotland will also have to reveal the size of the bonus pot for its 120,000 staff, and its boss, Ross McEwan, will outline his new strategy for the bank, which is 81%-owned by taxpayers.
McEwan, who waived his bonus when he was promoted to run RBS in October, is hoping to put the focus on his attempts to improve customer service. He is also reported to be planning to restructure the corporate bank by putting experienced banker Alison Rose at the helm of the crucial division.
HSBC will become the first major bank to outline how it will implement the bonus cap, which limits bonuses to 100% of salary, or 200% if shareholders approve the plans.
The row over City pay deals comes against a backdrop of continuing criticism of financial services and what critics see as a failure to learn lessons from the global crisis.
The Bank of England governor, Mark Carney, used an interview during the meeting of G20 nations in Sydney this weekend to send a message to banks complaining about proposed new capital requirements. Carney, who used to work for Goldman Sachs, told the Sydney Morning Herald in an interview that banks went into the financial crisis with "basically no liquidity protection" and were reliant on the state to insure them.
"The consequence was that we had a crisis where even countries that did the right thing in advance, such as my native Canada and here in Australia, had to take extraordinary measures to support the banks," he said.
"We can't have a system where some of those institutions that are pushing back on this are still reliant ultimately on the state and are getting a massive subsidy from the taxpayer."
HSBC is expected to make quarterly payments in shares to about 1,000 staff who will fall under the bonus cap, which is targeted at payouts a year from now, and to individuals involved in making and taking risks.
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