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UK home to 80% of top-earning European bankers UK home to 80% of top-earning European bankers
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More than 4,000 City-based financiers were paid more than €1m (£850,000) in 2015 – including one fund manager who received nearly €34m. More than 4,000 City-based bank workers were paid more than €1m (£850,000) in 2015 – including one fund manager who received nearly €34m.
The latest data from the pan-European regulator the European Banking Authority reignited the row over City pay after it showed that 80% of the financiers across the EU who were classified as high earners – receiving more than €1m – were based in the UK, New data from the European Banking Authority, a pan-European regulator, showed that 80% of the EU financiers classified as high earners – those receiving more than €1m a year – were based in the UK,
Frances O’Grady, general secretary of the TUC, said: “It’s a worrying sign that Britain’s banking sector still has the wrong priorities, and is more about servicing a culture of excess at the top rather than servicing the economy and giving fair pay to staff at the bottom of the chain.”Frances O’Grady, general secretary of the TUC, said: “It’s a worrying sign that Britain’s banking sector still has the wrong priorities, and is more about servicing a culture of excess at the top rather than servicing the economy and giving fair pay to staff at the bottom of the chain.”
Across the EU, 5,124 of financiers – bankers, fund managers and compliance experts – received €1m, of which 4,133 were based in the UK, the EU’s biggest financial centre. Across the EU, 5,124 financiers – bankers, fund managers and compliance experts – received €1m, of which 4,133 were based in the UK, the EU’s biggest financial centre.
The EU-wide rise from 3,865 in 2014 was in part fuelled by staff paid in sterling having their pay translated into euros, in line with EBA requirements. The number of EU bank workers paid more than €1m soared by nearly a third from 3,865 in 2014.
Of the UK’s high earners 2,927 received between €1m and €2m in salary and bonuses. The pay is disclosed in €1m increments and shows six individuals received more than €20m. This includes one whose €199,000 salary rocketed to €33.7m after bonuses were included, and another who received €28m. Both worked in asset management rather than investment banking, traditionally regarded as the sector with the biggest bonuses. The EBA said that increase was partly the result of staff paid in sterling having their pay translated into euros, in line with the regulator’s requirements.
Detail about pay deals for senior fund managers is not often made public, although there have been some examples. Richard Woolnough, of Prudential’s fund management arm M&G, has been revealed as receiving £17.5m in 2013 and £15.5m in 2014. Six UK individuals earned more than €20m. The highest paid received £33.7m, but more than 99% of thatpayout was bonuses. The worker, a fund manager, was paid a salary of £199,000.
Stefan Stern, director of the High Pay Centre, said: “These figures reveal a closed world where massive pay packages are considered normal, including in parts of the asset management industry. This underlines the need to introduce a real world perspective into top pay discussions, through employee representatives. Top pay is currently set by a closed circle of very highly paid people. They need to be brought back down to earth in every sense”. Another fund manager was paid £28m, according to the data. Traditionally it has been investment bankers, rather than asset managers, who receive the biggest bonuses.
The EBA’s pay disclosures follow rule changes introduced since the 2008 banking crisis, which also led to the introduction of the bonus cap in 2014. This limits bonuses to 100% of salary or 200% if shareholders approve - although waivers have been offered by their local regulators to fund management firms to ignore the rules. Detail about pay deals for senior fund managers is rarely made public, although there have been some examples. Richard Woolnough, a fixed income bond specialist at Prudential’s fund management arm M&G, received £17.5m in 2013 and £15.5m in 2014.
Details of the scale of the pay deals on offer come as the role of the City faces scrutiny in the UK’s forthcoming negotiations to leave the EU. Other financial centres in the remaining 27 countries are hoping to attract financiers displaced by Brexit. Some 2,927 of the UK’s high earners received between €1m and €2m in salary and bonuses.
The EBA, currently based in London but which will vacate its Canary Wharf office after Brexit, published data showing that 279 financiers in Germany received more than €1m, the highest receiving just under €14m. In France, 178 received more than €1m, with the highest receiving under €5m. Stefan Stern, director of the High Pay Centre, said: “These figures reveal a closed world where massive pay packages are considered normal, including in parts of the asset management industry. This underlines the need to introduce a real world perspective into top pay discussions, through employee representatives. Top pay is currently set by a closed circle of very highly paid people. They need to be brought back down to earth in every sense.”
“In the context of Brexit, the loss of tax revenue from highly paid individuals would clearly be serious. So a mess-up during and post Brexit could be really damaging,” said Stern. The EBA’s pay disclosures follow rule changes introduced after the 2008 banking crisis, which also led to the introduction of the bonus cap in 2014. This limits bonuses to 100% of salary or 200% if shareholders approve – although waivers have been offered by local regulators to fund management firms to ignore the rules. Banks have increased salaries and introduced new allowances to get around the bonus cap.
It is not yet clear how the data for the City will be published after the UK leaves the EU. The data is provided to the EBA by the local regulators, including the Bank of England for the UK, and will need to be included in legislative changes required in the UK as a resutl of Brexit. The EBA, which is based in London but will relocate to mainland Europe after Brexit, said that 279 financiers in Germany received more than €1m, with the highest paid receiving just under €14m. In France, 178 received more than €1m, with the highest paid less than €5m.
It is not yet clear how the data for the City will be published after the UK leaves the EU. The data is provided to the EBA by the local regulators, including the Bank of England.