HSBC chairman attacks bank bonuses

26th Jan 2010 13:03

HSBC chairman Stephen Green has hit out at 'distorted' banker's bonuses and predicts pay-outs will be lower in future.'In banks' remuneration, there's been plenty of distortion,' he said in an interview with the Financial Times. 'You've had bonuses paid off gross income, you've had bonuses paid off first-day [profits], you've had bonuses paid without any capital charge, and so you can see how that gives rise to the wrong and frankly inflated numbers.'Green, a committed Christian and chairman of the British Bankers' Association, said the banking industry 'had very good reason to be uncomfortable, looking backwards'.'As this newer environment beds down, I think you will see a market working in a way we don't need to be ashamed of.'His comments on the eve of the World Economic Forum's opening day in Davos come as the row over bank bonuses rumbles on.Yesterday, Goldman Sachs capped the total pay of its top 100 employees in London at £1m in an effort to appease the British government, keen to rein in City salaries. 'We're not blind to the pain and suffering still going on around the world and we're not deaf to the calls for restraint. We heard them,' said Goldman finance director, David Viniar. Credit Suisse is slashing bonuses for senior UK investment bankers by 30% and cutting the total compensation pool for 2009 by 5%.Meanwhile, the pressure builds on Royal Bank of Scotland, 84%-owned by the taxpayer, to curb a £1.5bn bonus giveaway.It wants to pay as much as £85,000 to every one of the 17,500 staff at its investment bank following a surge in profits at the unit.There are also reports that Barclays is deferring 2009 bonuses for directors and senior staff for up to three years. The bank is expected to reveal in March that bonuses will be paid mostly in shares over three years.