Pay Freeze Thaws at HSBC
12 February 2016 - 12:20AM
Dow Jones News
LONDON—HSBC Holdings PLC backtracked from a decision to freeze
pay this year after employees pushed back to receive raises they
had earned.
Chief Executive Stuart Gulliver wrote to staff on Thursday to
say the freeze announced two weeks ago was being scrapped. Not
everyone will get a raise in 2016, he said, but those who had won
one as part of their annual pay review will.
The raises will be paid out of this year's bonus pool, Mr.
Gulliver said in the memo. A spokeswoman said the bank is targeting
significant cost reductions by the end of 2017, as outlined by the
bank in a strategy update in June.
HSBC put the freeze on pay and hiring two weeks ago as a fresh
measure to control costs. The bank, which is overhauling its global
operations and exiting or shrinking its presence in dozens of
countries, aims to shave up to $5 billion from its annual
costs.
HSBC, along with rivals across the world, has seen its stock
hammered this year as investors reset their expectations on how
profitable banks can be even after they carry out major
restructurings. HSBC has been relatively resilient, with its stock
is down 21% this year compared with a 28% decline in the STOXX
Europe 600 Banks index.
Amid the market volatility, HSBC's board will meet on Sunday to
decide whether the bank should relocate its headquarters out of
London. The long-awaited decision—which analysts expect will be for
the bank to remain in London—is being made after the board reviewed
the regulatory, political and legal implications of moving to
another city such as Hong Kong or Paris.
Write to Margot Patrick at margot.patrick@wsj.com
(END) Dow Jones Newswires
February 11, 2016 08:05 ET (13:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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