HSBC Holdings Plc Chief Executive Officer Noel Quinn said the UK’s move to scrap the cap on bankers’ bonuses shouldn’t automatically lead to fatter pay packages for staffers.
While it would be appropriate to consider changes to his bankers’ bonuses now that the firm has the ability to do so, Quinn said he feared the promise of bigger pay packages could incentivize bankers to take unnecessary risk.
“We’ve got to remain sensible and reward people appropriately,” Quinn said Wednesday at a Financial Times conference in London. “I don’t think we should use the change in the bonus cap to unleash an inappropriate amount of risk taking.”
Britain’s Prudential Regulation Authority said last month that the cap limiting bonuses to a maximum of twice a banker’s base pay would be lifted beginning on October 31. Banks were allowed to pay staff as they liked for the current financial year, though the regulator said they would need to ensure fixed and variable pay are “appropriately balanced.”
The European Union had introduced the bonus cap for “material risk takers” in 2014 in response to public fury about the financial crisis. But UK officials had sought to abandon the cap to make post-Brexit Britain more attractive as a financial center.
