HSBC & Citi's 2024 severance payments were wild compared to the rest
It’s never nice to get laid off. But if you’re going to lose your job, you might as well get a decent payout from it to carry you through to your next job. Or even retirement, perhaps – if you work at Citi or HSBC.
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Basel Pillar III disclosures, which typically include how much senior investment bankers (known as material risk takers, or MRTs) are paid, also include another interesting factor: how often they get fired. And how much severance pay they collect when they are fired.
By some margin, the banks that pays their disenfranchised staff the most are Citi and HSBC. The average severance package for a Citi MRT in London was $757k; one “lucky” person and the firm in the city was paid $9m, as we noted last month. The equivalent figures at HSBC were an even more notable average package of $1.3m and maximum package of $9.3m. Citi and HSBC fired 37 and 34 MRTs in 2024, respectively.
The “least generous” bank was Barclays. The British bank paid an average of $174k in severance to its 33.9 fired MRTs; the best-compensated received $389k. It also fired 34 people in 2024, indicating that the difference is not a quirk of scale.
In reality, the size of an MRT’s severance package has less to do with their employer, and more to do with their seniority. Citi, for example, cut thousands of people in 2024; quite a few of them were senior, MRT types. 5,000 of 20,000 planned cuts were to be related to consolidating management layers. HSBC also began culling its senior management at the end of the year. In all likelihood, the big (severance) earners came from these cuts.
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