HSBC Holdings is to hand its new chief executive a pay package potentially worth more than £15m as part of an overhaul of its bosses’ remuneration triggered by the government’s scrapping of the EU bonus cap.

Sky News has learnt that Europe’s biggest lender, which has a market capitalisation of more than £147bn, is putting the finishing touches to an overhaul of CEO Georges Elhedery’s pay deal ahead of its annual results this month.

HSBC is understood to have been consulting leading shareholders on the plans, which will involve increasing his maximum pay to just over £15m, in recent weeks.

City sources said the proposals would see Mr Elhedery’s fixed pay roughly halved, but with significantly more generous maximum variable pay awards.

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When he was named as Noel Quinn’s successor last July, HSBC said he would receive a base salary of £1.38m, a £1.7m fixed pay allowance, a maximum annual bonus opportunity of roughly £3m and a maximum long-term share award of close to £4.5m.

That amounts to a total of approximately £10.5m.

Investors said they have been briefed that Mr Elhedery’s new package would scrap the fixed pay allowance altogether but incorporate higher multiples of bonus and long-term share awards.

The bank’s new finance chief, Pam Kaur, will also see her remuneration package amended along similar lines.

The changes have been drawn up by Dame Carolyn Fairbairn, the former CBI director-general, who chairs HSBC’s boardroom pay committee.

HSBC’s move to overhaul its directors’ remuneration policy, which is expected to be put to a vote of shareholders in the spring, follows that of its UK banking peer, Barclays.

Sky News revealed last month that Barclays was increasing CEO CS Venkatakrishnan’s maximum pay package to just over £14m.

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By comparison, HSBC’s market capitalisation is about three-and-a-half times that of Barclays, making it the London stock market’s third-largest company.

The decision by leading UK banks to increase their CEOs’ pay suggests that the industry is entering a more permissive climate as far as investors are concerned.

One person close to HSBC pointed out that Mr Elhedery now ran Europe’s biggest bank, but would continue to be paid less than many of his continental peers.

By comparison, the major US banks also pay their chiefs significantly higher sums.

Brian Moynihan, the boss of Charlotte, North Carolina-based Bank of America, earned $29m in 2023, while Goldman Sachs, JP Morgan and Morgan Stanley all pay their CEOs substantially more than Mr Elhedery will earn even as a maximum payout.

It comes as searching questions continue about the attractiveness of London’s stock market for international companies, with executive pay at the forefront of that debate.

Mr Elhedery took up the role of HSBC CEO in September, since when he has announced a sweeping overhaul of the bank’s operations, reorganising it along geographically distinct lines, a move which raised questions about the future of parts of its sprawling international empire.

Last month, he announced surprise cuts to parts of HSBC’s investment banking operations which will affect a significant number of its UK-based dealmakers.

In a statement issued to Sky News, an HSBC spokesman said: “The Remuneration Committee’s objective is for the pay outcomes for our executive directors to be strongly aligned with performance and shareholders’ interests.

“We will publish details with our YE results on 19 February.”

This year’s annual report will not provide an accurate comparison with Mr Elhedery’s likely pay from this year because he spent much of 2024 in the role of chief financial officer.

Tesco has expressed interest in acquiring more than 100 Crown Post Offices whose future has been placed under review as the state-owned company explores shifting them to a franchise model.

Sky News has learnt that Nigel Railton, the Post Office chairman, told a group of MPs this week that Britain’s biggest retailer had informed it of a potential interest in taking over the sites.

One MP who attended the talks on the future of the directly managed branches said that Mr Railton had given the impression in his remarks that Tesco was among a small number of suitors which could take over the entire 108-strong network.

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The fate of the Crown Post Offices was called into question last autumn as part of a wider strategic review initiated by Mr Railton, who took over as chair of the company following Henry Staunton’s sacking by Kemi Badenoch, the then business secretary.

Collectively, the branches employ close to 1,000 people, with many of those jobs likely to be safeguarded in the event of an acquisition of the whole network by a single retailer.

The meeting between Mr Railton and more than 20 MPs was organised to discuss the future of the directly managed branches, which form a very small part of the wider Post Office network.

Trade union officials have expressed concern about the company’s plans.

Following several enquiries, Tesco eventually responded by saying it would not comment.

A Post Office spokesperson said: “We are fully committed to engaging openly and transparently with MPs regarding any potential plans related to our Directly Managed Branch (DMB) network.

“Since inviting expressions of interest for 108 Post Offices that we currently operate, we have received interest from retail partners and independent postmasters in the hundreds.

“We remain committed to engaging with our trade unions over the potential future ownership of our Directly Managed Branches, which are loss-making for us, into March before updating our colleagues who work in these branches on any potential next steps.”

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The strategic review outlined in November is designed to bolster sub-postmasters’ pay substantially during the coming years.

The loss-making Post Office requires an annual subsidy from the Treasury, with its future called into question as the Horizon IT scandal continues to sow controversy.

Sky News revealed last year that the Department for Business and Trade had drafted in consultants from BCG to explore options for turning the Post Office into a mutual.

An arms race for artificial intelligence (AI) supremacy, triggered by recent panic over Chinese chatbot DeepSeek, risks amplifying the existential dangers of superintelligence, according to one of the “godfathers” of AI.

Canadian machine learning pioneer Yoshua Bengio, author of the first International AI Safety Report to be presented at an international AI summit in Paris next week, warns unchecked investment in computational power for AI without oversight is dangerous.

“The effort is going into who’s going to win the race, rather than how do we make sure we are not going to build something that blows up in our face,” Mr Bengio says.

He warns that military and economic races “result in cutting corners on ethics, cutting corners on responsibility and on safety. It’s unavoidable”.

Mr Bengio worked on neural networks and machine learning, the software architecture that underpins modern AI models.

He is in London, along with other AI pioneers to receive the Queen Elizabeth Prize for Engineering, the most prestigious global award for engineering, in recognition of AI and its potential.

He’s enthusiastic about its benefits for society, but the pivot away from AI regulation by Donald Trump‘s White House and frantic competition among big tech companies for more powerful AI models is a worrying shift.

‘Superhuman systems becoming more powerful’

“We are building systems that are more and more powerful; becoming superhuman in some dimensions,” he says.

“As these systems become more powerful, they also become extraordinarily more valuable, economically speaking.

“So the magnitude of, ‘wow, this is going to make me a lot of money’ is motivating a lot of people. And of course, when you want to sell products, you don’t want to talk about the risks.”

But not all the “godfathers” of AI are so concerned.

Take Yann LeCun, Meta’s chief AI scientist, also in London to share in the QEPrize.

“We have been deluded into thinking that large language models are intelligent, but really, they’re not,” he says.

“We don’t have machines that are nearly as smart as a house cat, in terms of understanding the physical world.”

Within three to five years, Mr LeCun predicts, AI will have some aspects of human-level intelligence. Robots, for example, that can perform tasks they’ve not been programmed or trained to do.

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But, he argues, rather than make the world less safe, open-source AI models such as DeepSeek – a chatbot developed by a Chinese company that rivals the best of America’s big tech with a tenth of the computing power – demonstrates no one will dominate for long.

“If the US decides to clam up when it comes to AI for geopolitical reasons, or, commercial reasons, then you’ll have innovation someplace else in the world. DeepSeek showed that,” he says.

The Queen Elizabeth Prize for Engineering prize is awarded each year to engineers whose discoveries have, or promise to have, the greatest impact on the world.

Previous recipients include the pioneers of photovoltaic cells in solar panels, wind turbine technology and neodymium magnets found in hard drives, and electric motors.

Science minister Lord Vallance, who chairs the QEPrize foundation, says he is alert to the potential risks of AI.

Organisations such as the UK’s new AI Safety Institute are designed to foresee and prevent the potential harms AI “human-like” intelligence might bring.

But he is less concerned about one nation or company having a monopoly on AI.

“I think what we’ve seen in the last few weeks is it’s much more likely that we’re going to have many companies in this space, and the idea of single-point dominance is rather unlikely,” he says.