HSBC chief tipped for pay increase
12:53pm Sunday 23rd February 2014 in © Press Association 2014
HSBC's chief executive is in line for a big salary increase as the bank prepares to announce profits of nearly £15 billion for the last year.
The pay rise reportedly under consideration for Stuart Gulliver will enable the bank to get round new European rules preventing bankers from being paid bonuses worth more than two times their salary.
According to the Sunday Times, HSBC's annual report on Monday will show Mr Gulliver was paid about £7.5 million for last year, including bonuses and benefits worth about five times his basic salary.
The new rules from Brussels came into effect in January, meaning that 2013 was the last year in which such big bonuses could be paid.
Analysts believe Mr Gulliver's salary could be doubled to compensate for the restrictions and that he may also be offered a new top-up payment in the form of a shares allowance. It would not be tied directly to performance and so would not count as a bonus under the rules.
Tomorrow's full-year results for HSBC are expected to show pre-tax profits jumped by a fifth to 24.7 billion US dollars (£14.8 billion).
The banking group makes an estimated 90% of its money outside Britain and has benefited from its exposure to emerging markets in Asia.
In the UK, it has tapped into the resurgent housing market by growing its share of new mortgage lending to around 12%.
Mr Gulliver took the helm in 2011 and has led an extensive overhaul of the business. He is paid a basic salary of £1.2 million.
His current pay scheme offers Mr Gulliver an annual bonus worth up to three times his salary, plus a longer-term share award that pays out as much as six times salary.
Other banks, including Royal Bank of Scotland, are not expected to announce how they plan to tackle the Brussels rules until they present their annual reports later in the spring.
Chancellor George Osborne has filed a formal complaint against Brussels over the plans amid fears its introduction will drive up fixed salaries and increase the risk to financial stability.
It is thought that HSBC has been discussing the option of making quarterly share payments to its 1,000 top staff to get around the cap.