HSBC boss offered 600% bonus. Is it legal?

When people think of CEO salaries, lucrative amounts of money are often involved. And earnings for the CEO of the UK’s biggest bank, HSBC are no exception.

Georges Elhedery, who joined the bank as chief executive in September 2024, has reportedly been offered a bonus worth up to 600% of his base salary, giving him the chance to earn up to £15 million per year.

HSBC also recently cancelled its Zing fintech app as a cost-cutting measure, raising questions about how the company will justify the payday jackpot.

CEO salaries continue to rise

According to The Guardian, Elhedery’s current potential pay totals up to £10.5 million per year. This bonus payment could increase his total take-home pay to around £9m, an increase of up to 43%. 

The average salary for CEOs is reported to be at record levels, with FTSE 100 CEOs earning up to £4.22 million. That means the country’s top CEOs now earn 113 times the median average salary in the UK.

As for HSBC’s bonus schemes for employees, the company offers a quarterly incentive or annual bonus based on performance and activities that add to its core values. 

The average bonus amount it paid to its top investment bankers was $737,600 in 2024, according to FN London, a decrease of 4% year-on-year.

HSBC closes Zing app for “cost-cutting measures”

Last month, HSBC announced the closure of its Zing app, putting around 400 employees at risk of redundancy. While stiff competition from the likes of fintech giants like Revolut and Wise was one reason for its closure, HSBC put the decision down to “simplification”.

In a statement on Wednesday morning, HSBC also committed to $1.5bn (£1.2bn) worth of cost cuts by the end of 2026, according to City AM.

Plenty of organisations are making cost-cutting measures to improve organisational efficiency in today’s harsh economy. But with hundreds of jobs at risk from Zing’s closure, Elhedery’s potential bonus windfall will likely raise eyebrows among the workforce.

Elhedery’s new pay package is part of a long-term plan that would also see the bank water down its net zero targets. HSBC had previously planned to hit net zero for its own operations by 2030, but these plans have since been extended to 2050.

HSBC faced backlash as a result. Joanna Warrington at Fossil Fuel London commented that the bank “helped get us into this mess by financing the growth of fossil fuels which drive up emissions. It has no right complaining that now it’s suddenly too hard to bring them down”.

Is it legal for CEOs to get a 600% bonus?

In October 2023, the UK’s Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) announced the removal of the bonus cap for banks and building societies. 

Before this, an employee’s bonus could only be paid up to a maximum of 100% of their salary, or 200% with shareholder permission. According to a joint statement by the regulators, the cap was removed to allow firms to restructure pay more quickly.

That means there is currently no legislation that stipulates how much a CEO can earn from their base salary or bonus payments. 

There may not be any legal foul play, but given today’s cost of living crisis and economic uncertainties, this latest CEO pay top-up may not do HSBC any reputational favours. 

In November, a poll by the High Pay Centre found that 55% of employees agree that CEO salaries should be capped relative to low or middle earners, in order to close the widening pay gap between UK boards and employees. Only 15% objected to the idea.