HSBC Holdings plc will gradually eliminate fixed allowances for senior executives and convert a larger proportion of their compensation into bonus payments.

According to an internal memo, the London-based bank is moving toward a compensation structure closer to Wall Street style, and will begin scrapping its existing fixed pay system early next year.

The move is part of ongoing reforms by Chief Executive Georges Elhedery aimed at better linking pay with performance.

An HSBC spokesperson said: "As a global bank, this compensation adjustment can strengthen the pay-for-performance mechanism, enable differentiated incentives, attract top talent, and reward employees who deliver outstanding results for customers and stakeholders."

Barclays had previously introduced similar changes, announcing in July that it would convert more employee compensation into bonuses.