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What did the actual workers receive?

HSBC increases top bonuses but cuts holidays

Trade union denounces move as ‘an outrage’

HSBC has increased the number of £1 million bonuses it paid out this year, at the same time as cutting annual leave entitlement for its workforce by two days in a move which has angered trade unions.

Yesterday, the bank announced pre-tax profits for 2012 of $20.6 billion (£13.7 billion), down 6 per cent on the previous year. Results were affected by a £1.2 billion money laundering fine in the US, plus £1.5 billion of PPI mis-selling claims in the UK.

HSBC confirmed that it paid 204 workers bonuses of more than £1 million for 2012, up from 192 in 2011. This included 78 employees in the UK, up from 64 the previous year.

Group chief executive Steven Gulliver’s remuneration package included a £2 million bonus – but overall he took home £614,000 less than in 2011, when he received £8 million.

HSBC also announced that it would be reducing staff holidays by two days a year, which followed news last month that the company would be closing its final salary pension scheme to future accruals.

But unions hit out at the latest moves. Unite claimed that this year’s bonuses of £1 million plus were worth four times more than the £46 million in savings that the business would generate through holiday and pension cuts.

“The savings the bank is making from these changes are a drop in the ocean compared to its profits and the bonuses being awarded,” said Unite national officer Dominic Hook. “HSBC can easily afford to provide decent pensions to all its staff.”

However, an HSBC spokesman told PM that the company did not recognise Unite's figures, and that the pension and holiday changes were “cost neutral” to the bank's overall employee benefits structure. He added that holiday entitlement was being harmonised at 28 days – so while some employees would be compensated for losing two days per year, others would see an increase in annual leave.

Meanwhile, Gulliver also defended the bank’s bonus payout, and insisted that the bank had made “significant process” as it underwent a restructuring process. Last year, the banking group disposed of 26 business, and axed 27,700 jobs, leaving a workforce of 270,000.

The HSBC results follows staff bonus pools of £607 million and £375 million announced by Royal Bank of Scotland and Lloyds Banking Group respectively, despite both banks reporting losses for 2012.

The European Union recently set out plans to cap bankers’ bonuses at one year’s salary, while in Switzerland this week the government was given a mandate to impose strict rules on executive pay following a public referendum.