HSBC Holdings Plc will phase out fixed-pay allowances for its senior staff and instead hand out a greater proportion of its compensation in the form of bonuses, becoming the latest UK lender to switch to Wall Street-style remuneration to better align with performance.

The London-headquartered bank will switch to the new pay system at the start of 2028, according to a memo seen by Bloomberg News.

The approach “strengthens our ability to pay for performance, better differentiate, attract the best talent, and recognise” top performers, a spokesman for HSBC said in a statement.

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HSBC’s shift follows a similar update from Barclays Plc, which said in July it would switch more of its employees’ pay toward bonuses after the UK changed its rules around compensation last year, in an effort to boost domestic competitiveness. Wall Street bankers have typically received the bulk of their pay through bonuses tied to performance, rather than fixed salaries.

The planned compensation overhaul is part of a broader restructuring HSBC has seen since Georges Elhedery took over as chief executive officer in September 2024. His shake-up of the lender has resulted in the sale, closing or merger of several businesses and hundreds of job cuts.

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The CEO has also led a cost-cutting program that has included paring back long-time benefits enjoyed by some of the company’s staff, such as education allowances and contributions to private club memberships for employees of its Hong Kong-based business.

In Hong Kong, the lender ended a long-standing education subsidy covering 95 percent of school fees for the children of new hires and senior staff relocating to the city. Existing band-three employees and managing directors who already receive the benefit will retain it. Bloomberg News reported last month. It is also cutting a perk worth up to HK$200,000 ($25,485) that subsidized some private club access for its bankers in the Asian hub.

The share price of HSBC has more than doubled since Elhedery became CEO.