CEO Stuart Gulliver says he will protect HSBC
's competitive position on pay amid EU bonus cap rules (Photo: Reuters)
HSBC's chief executive Stuart Gulliver has pledged to protect bankers' bonuses and "competitive salaries" against new European Union laws coming into force over the next few years.
Speaking on an investor call, following HSBC's third quarter results announcement, Gulliver said he "will do what[ever] it takes to protect [the bank's] competitive position on pay amid the EU bonus cap."
The pledge comes as the bank posted a 10% jump in profits for the third quarter this year following an aggressive cost cutting plan.
According to the bank's results statement, HSBC recorded an underlying pretax profit of $5.1bn (£3.2bn, €3.8bn) for the three months to the end of September, up 10% from a restated $4.6bn last year.
HSBC completed 46,000 job cuts by May this year, alongside the selling or closure of 52 businesses since 2011.
Earlier this year, HSBC revealed that headcount could fall to between 240,000 and 250,000 by 2016. Last year the bank's global headcount stood at 261,000.
EU Bonus Caps
The EU Council pushed through the plan earlier this year to cap bankers' bonuses at a maximum of double their salary from 2015.
The measure will come in on 2014's bonuses that will be paid out at the start of 2015.
However, under draft guidelines produced by the European Banking Authority (EBA), lawmakers are debating whether to permit a bonus cap of 250% of bankers' salaries.
It also appears that bankers' pay rules could be relaxed to allow deferred payments over five years.
The paper spells out how financial institutions in an EU member state could apply for a "discount rate" that would permit their workers to be paid more money over a longer period of time.
According to the EBA's guidelines, this is to ensure that any awarding of bonuses be aligned with sensible behaviour and incentives.
A major problem that emerged from the financial crisis was that bonuses encouraged risk taking which ultimately harmed banks and wider economies.
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