HSBC to sell shares to pay staff bonuses - reports

HSBC is preparing to sell new shares to pay senior staff bonuses of more than £50,000, under a new pay structure, according to reports.

The pay deal has been agreed with the Financial Services Authority, which sees it as a way for banks to bolster their capital base while continuing to pay staff bonuses, the Telegraph reports.

The amount of new shares issued will cause a "miniscule" amount of dilution, according to a Telegraph source, who said it would equal less than 0.1% of the bank's outstanding share capital.

Under the arrangement, an executive director HSBC employee earning worth £1m would receive 60% of the payout in the form of share deferred over three years.

The £400,000 non-deferred component would be paid for by HSBC selling shares worth an equivalent amount, with the proceeds handed on to the employee, while bonuses of less than £50,000 would be paid entirely in cash.