Morning Coffee: HSBC CEO's 50% potential pay rise as senior colleagues disappear. Hard times at Brevan Howard
When HSBC CEO Georges Elhedery took the job in July 2024, it was in the expectation of earning £10.6m ($13.2m) a year. Seven months and the announcement of one major restructuring plan later, Elhedery is in line for a large potential pay rise.
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Sky News reported yesterday that Elhedery's total package may be hiked to £15m. However, instead of comprising a £1.38m salary, a £1.7m allowance, a pension allowance and circa £6m of bonus payments, Elhedery's new pay will comprise a £1.38m salary, a pension allowance and a bonus seemingly worth over £10m in cash and deferrals.
George's giant bonus isn't a done deal: it's still being discussed and will only be unveiled on February 19th when HSBC announces its fourth quarter results.
In the meantime, senior HSBC bankers are disappearing. HSBC is closing its equity capital markets (ECM) and M&A businesses outside Asia and the Middle East and is already losing deals it's currently working on in those regions.
In the short term, it seems to be HSBC's Asian bankers who are walking away. Reuters reports that deputy global head of equities Selene Chong is taking a leave of absence and Bloomberg says that Christina Ma, the head of global banking for APAC is being eliminated just two years after joining from Goldman Sachs.
Elhedery's big pay rise isn't only about the number of senior bankers he can get rid of. It's also related to the lifting of the EU bonus cap in the UK. CS Venkatakrishnan, CEO of Barclays, has had his salary cut and his bonus hiked too. The big question now is whether HSBC and Barclays will increase bonuses and cut salaries for other bankers as well.
Separately, after underperforming rivals and cutting underperforming staff, hedge fund Brevan Howard seems to have underperformed again. Bloomberg reports that the Brevan Howard Master fund fell 2.93% in January after it bet on tariffs that failed to materialize. This is its worst start to the year for two decades. Coincidentally, or not, Oualid Lahsini, Brevan's CEO in the Middle East is leaving.
Meanwhile...
Said Haidar's macro fund surged 15.8% in January. In the last two years, it fell 62%. (Bloomberg)
Following reports that it wouldn't promote many people, Citi elevated 8,500 employees as part of its year-end process to retain higher-performing staff, bringing the total number of promotions for 2024 to more than 31,000. (Financial Times)
The US sovereign wealth fund is paradise. “Need a deck on strategic lithium reserves by noon." (WSO)
There's a sudden rush of oil and gas M&A. (Bloomberg)
Donald Trump wants to increase tax on carried interest. (Financial Times)
Chris Blackburn, head of UBS’ Execution Hub, EMEA, says he resigned before bonuses. (The Trade)
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