The abolition of the UK banker bonus cap has led to a significant increase in pay at Barclays and HSBC, with their top-paid bankers receiving the highest payouts since at least 2014. According to an analysis of recently released pay documents, the compensation for their most expensive staff increased by over 50% to almost €20m in 2024, following the banks’ decision to take advantage of more relaxed pay rules and allow staff to be paid bonuses amounting to 10 times their salary.

At HSBC, one banker was compensated between €19m-€20m in 2024, a significant increase from €12m-€13m the previous year, while the bank’s CEO, Georges Elhedery, earned £5.4m last year. In comparison, Barclays paid €17m-€18m to a single banker in 2024, up from €11m-€12m in 2023, and higher than the £10.5m paid to its boss, CS Venkatakrishnan, for 2024.

These pay packages are the highest on record for both banks since the 2007-2008 financial crisis, when UK lenders were required to begin releasing pay data in 2014. The previous record at Barclays was a controversial £17m payout to former boss Bob Diamond in 2011.

The removal of the bonus cap is the first indication that less stringent regulation is resulting in higher banker pay. Between 2014 and 2023, banker bonuses were restricted to two times their salary in an effort to reduce risky behavior that led to short-term gains. Although salaries increased to compensate for lower bonuses, the rules limited overall compensation, with the highest-paid bankers at HSBC and Barclays earning between €8m-€14m until 2023.

However, critics argued that the cap made it difficult for UK-based banks to compete with countries like the US, where there was no cap, leading to the eventual scrapping of the bonus cap in 2022. Goldman Sachs, which lobbied for the change, now allows its top performers in the UK to be paid up to 25 times their annual salary.

The number of bankers earning more than €1m at Barclays increased from 668 in 2023 to 762 in 2024, while at HSBC, 517 bankers earned more than €1m in 2024, up from 512 the previous year. HSBC stated that the revised ratio provides flexibility to increase variable pay for exceptional performers in frontline roles, while Barclays declined to comment.

Source: https://www.theguardian.com/business/2025/mar/02/pay-soars-at-barclays-and-hsbc-after-end-of-uk-banker-bonus-cap