HSBC Holdings will phase out fixed-pay allowances for senior employees from January 2028 and move a larger share of their pay into performance-linked bonuses, according to an internal memo reported by Bloomberg and Reuters on 12 October 2026. The bank has confirmed the change.
An HSBC spokesman told Bloomberg that the new structure “strengthens our ability to pay for performance, better differentiate, attract the best talent, and recognise” its top performers. Existing allowances are expected to remain in place until the end of 2027, according to Retail News Asia.
Reuters reported that the memo ties the change to UK regulatory reforms that removed the cap limiting variable pay to twice fixed pay. UK banks introduced fixed-pay allowances after the EU bonus cap took effect, to keep total remuneration competitive within the cap. Bloomberg described HSBC as the latest UK bank to adopt a pay structure modelled on US investment banks, following a similar change at Barclays.
The overhaul also reaches benefits in Asia. According to Retail News Asia, new hires and senior staff relocating to Hong Kong will no longer receive the bank's school fee subsidy, while Managing Directors and other senior employees who already receive it will keep it. The same report says HSBC's variable pay rose 10% to US$3.93bn in 2025.
The reports do not say how the change applies to HSBC's senior bankers in the Middle East, where the group is one of the largest international employers in the sector. If it is applied there, offers and buy-outs for HSBC executives in the region would increasingly need to account for deferred bonus rather than fixed allowances.
