The pay-out for Stuart Gulliver and the bank's revelation that 239 staff received more than £1 million last year risked stoking anger over bank bonuses.
In addition, HSBC outlined measures that will see it sidestep new EU rules on bank bonuses by offering senior staff fixed pay allowances.
In the case of Mr Gulliver, his base salary will remain at £1.25 million but he will receive a fixed pay allowance of £1.7 million, to be awarded in shares on a quarterly basis.
It will not be tied directly to performance and so would not count as a bonus under new European rules preventing bankers from being paid bonuses worth more than two times their salary.
The controversial new rules from Brussels came into effect in January, meaning that 2013 was the last year in which big bonuses could be paid.
Mr Gulliver's previous pay scheme offered an annual bonus worth up to three times his salary, plus a longer-term share award that pays out as much as six times salary.
Shares in HSBC slumped by more than 4% in early trading after its profits of £13.6 billion rose 9% on a year ago but came in below City expectations.