HSBC’s Ruthless Bonus Policy Shocks Employees

Many were taken aback when HSBC unveiled its bonus decisions last year. Instead of bonuses, some employees lost their jobs entirely. As CEO Georges Ergederi noted, the bank has chosen a rather harsh path.

One HSBC representative shared, “We categorized our staff into three groups: a) Fired today (no bonus, here’s your severance package); b) Short-term employment (possibly with severance and a small bonus once you finish the project); and c) Long-term employment.” This approach caught many off guard—HSBC had long been recognized for its straightforward service. Recent reports indicate that around 25% of managing directors faced layoffs.

Now, it seems HSBC is solidifying its reputation for toughness. A report from Bloomberg reveals that in 2025, the bank intends to offer no bonuses to certain employees, adopting a “eat what you kill” mentality reminiscent of Jefferies, even as Jefferies itself struggles financially. This new bonus framework will involve doctors and is expected to be guided by Michael Roberts, a former City corporate banker, along with his colleague Jerry Keefe.

The notion of “eating what you kill” sounds admirable, but it can be quite the challenge, especially in the competitive landscape of banking. As deals unfold, those in powerful positions often band together to stake their claim in the success. For instance, Evercore employs a similar model, allowing managing directors to submit figures for each deal they bring in, creating a public display of success.

The dynamic could become even more intense for HSBC, especially with the upcoming merger of corporate and institutional banking slated for 2024. Currently, various teams—from corporate and investment bankers to M&A execution groups—are vying to secure their wins.

Jefferies, on the other hand, is reportedly shifting away from this competitive model to foster collaboration. Meanwhile, HSBC appears to be pushing those deemed unworthy of bonuses to reconsider their options elsewhere.