The removal of the UK banker bonus cap has triggered a surge in payouts at HSBC and Barclays. Top executives are now receiving their highest earnings in a decade.
UK Banker Bonuses Skyrocket to Record Levels
Recent financial reports show a sharp increase in banker bonuses. The highest-paid employees at HSBC and Barclays saw their earnings jump by over 50%. Some received nearly €20 million (£16.6 million) in 2024.
At HSBC, one banker earned between €19 million and €20 million. That is a massive jump from the previous year’s top payout of €12 million to €13 million. Meanwhile, Barclays’ highest-paid banker received between €17 million and €18 million. This figure far exceeds 2023’s top payout of €11 million to €12 million.
These record-breaking bonuses mark the highest payouts since UK banks began publicly disclosing salary data in 2014. Barclays’ latest figure even surpasses the controversial €17 million payout given to former CEO Bob Diamond in 2011.
Scrapping the Cap Triggered Skyrocketing Banker Bonuses
The UK first introduced a banker bonus cap in 2014, limiting bonuses to twice an employee’s salary. The regulation aimed to reduce risk-taking and prevent another financial crisis. While salaries increased to compensate, overall pay remained relatively controlled.
However, many critics argued that the cap made UK banks less competitive. Banks in the US, for instance, had no such restrictions. In response, former UK Chancellor Kwasi Kwarteng proposed removing the cap in 2022. By 2023, regulators had officially repealed the limit, allowing banks to set their own bonus structures.
UK Banker Bonuses Skyrocket as Pay Restrictions Ease
Following the cap’s removal, firms like Goldman Sachs set high limits. Their top UK bankers can now earn up to 25 times their base salary. Other banks followed, boosting earnings significantly.
At Barclays, the number of bankers earning over €1 million rose from 668 in 2023 to 762 in 2024. HSBC also saw an increase, with 517 bankers crossing the €1 million threshold, up from 512.
HSBC defended the move, arguing that the policy allows greater flexibility in rewarding top performers. However, the sharp rise in banker bonuses has sparked fresh debate over income inequality and financial regulations.
Stay tuned to London Pulse News for more updates.
