In an aim to enhance transparency regarding compensation, HSBC is rolling out a new bonus plan for its junior employees. The plan involves assigning a specific figure called ‘on target variable pay’ to employees in support roles.
The figure is said to be determined annually through external benchmark data from peers and internal pay data related to comparable roles. This is different from the previous compensation structure, where most junior employees did not have predefined bonus targets.
The said plan is intended to provide greater clarity to employees in grades 4-8, along with transparency on how performance influences variable pay decisions. This adjustment is significant as it contrasts with the previous practice of not setting specific bonus targets for most junior employees.
The changes implemented by HSBC will have a global reach, affecting staff within career bands 4 to 8, encompassing mid-ranking managers to junior operations and branch staff. Front office bankers, however, are expected to maintain their existing pay structure, consisting of base pay and discretionary awards, according to an anonymous source familiar with the matter.
As per Bloomberg, the company is set to announce bonuses for its staff this week, coinciding with the release of full-year results on 21 February. In the third quarter, the UK lender had hinted at a potential increase of $300 million in variable pay, resulting in higher expenses following a surge in earnings during that quarter.
Last year, the company asked its 18, 500 staff members to work in the office or engage with customers three days a week from office, starting October 2023. The shift in policy is aimed at prioritising customer satisfaction and adapting to the evolving needs of the workforce.
