Key facts
- The UK's banker bonus cap, which limited bonuses to twice the salary, has been removed.
- Following the cap's repeal, top bankers at Barclays and HSBC received significantly higher payouts in 2024.
- One HSBC banker earned between €19m-€20m in 2024, a substantial increase from previous years.
- Barclays paid one banker between €17m-€18m in 2024.
- The number of Barclays bankers earning over €1m rose to 762 in 2024.
The removal of the UK's banker bonus cap has led to a significant surge in pay for top earners at major financial institutions like Barclays and HSBC. Payouts for the highest-paid bankers at these firms have reached their largest figures since at least 2014, with some receiving over 50% more than the previous year.
Analysis of pay documents reveals that one HSBC banker was paid between €19m and €20m in 2024, a notable increase from the €12m-€13m top payout in 2023. Similarly, Barclays paid one banker between €17m and €18m in 2024, up from €11m-€12m the year prior. These figures are higher than the annual salaries of the respective CEOs, Georges Elhedery of HSBC (£5.4m) and CS Venkatakrishnan of Barclays (£10.5m).
The previous regulation, implemented after the 2007-8 financial crisis, limited banker bonuses to twice the salary, aiming to curb risky behavior. However, critics argued this cap hindered the UK's ability to compete for global talent. The cap was eventually repealed by regulators in 2023, following a call by former chancellor Kwasi Kwarteng. Banks are now free to set their own limits, with Goldman Sachs allowing star performers up to 25 times their annual salary.
The number of bankers earning over €1m also increased at both institutions. Barclays saw its total rise from 668 in 2023 to 762 in 2024, though the bank attributed nearly half of this increase to currency exchange rate effects. HSBC reported 517 bankers earning over €1m in 2024, a slight increase from 512 the previous year. HSBC stated that the revised ratio provides flexibility to increase variable pay for a small number of employees based on exceptional performance.