Pay Soars at Barclays and HSBC as UK Banker Bonus Cap Ends

The removal of the UK banker bonus cap has propelled pay levels at Barclays and HSBC to record highs, with some of the largest payouts seen since reporting rules were introduced in 2014. Figures reveal that the highest-earning bankers at these institutions have received significant increases, topping historical records for both banks.

HSBC disclosed that one of its top earners made between €19m and €20m in 2024. This marks a sharp rise compared to the previous year, when its highest-paid banker received €12m-€13m. Similarly, Barclays paid €17m-€18m to its top earner last year, exceeding the previous maximum of €11m-€12m in 2023. This trend has placed overall remuneration at levels unseen since former Barclays CEO Bob Diamond earned a controversial £17m in 2011.

This surge in bonuses follows new, looser remuneration rules that were introduced after the abolition of the cap. From 2014 to 2023, banker bonuses were restricted to double their annual salary—a measure designed to promote financial stability by reducing incentives for risky behaviour. In response, salaries were raised to balance out the restricted bonuses, but total pay remained relatively controlled. For instance, top earners at Barclays and HSBC earned between €8m and €14m during this period.

The cap faced criticism over the years, particularly for placing UK-based banks at a disadvantage compared to their international competitors. Following pressure from industry leaders, the former chancellor of the exchequer Kwasi Kwarteng called for its removal using post-Brexit regulatory freedoms. UK regulators formally repealed the cap in 2023, allowing banks to set their own pay structures for top performers. Goldman Sachs was one of the most significant advocates for this change and now allows bonuses up to 25 times annual salary for leading UK employees.

The number of high earners has also grown. Barclays now has 762 staff earning over €1m, up from 668 in 2023. HSBC showed a smaller rise, reporting 517 bankers earning more than €1m in 2024 compared to 512 in the prior year. Barclays cited the effect of currency exchange rates as a factor in the increase, which pushed more staff into higher pay brackets.

HSBC commented that the removal of the cap has provided flexibility in rewarding exceptional frontline performance. However, the growing disparity in pay levels has reignited debates about whether these changes could encourage excessive risk-taking within the sector—a key concern during the 2007-8 financial crisis.

Although executive pay continued to surge, some senior figures earned comparatively less than top bankers. HSBC’s CEO Georges Elhedery earned £5.4m after stepping into the role in September 2024. At Barclays, CEO CS Venkatakrishnan’s earnings reached £10.5m, a sum dwarfed by the payout received by the bank’s principal earner.