Success For Failure When Will We Learn

The Times Tom Knowles

Published at 12:01AM, September 8 2015

Britain has more bankers earning €1m than rest of Europe combined

Britain had more bankers earning more than €1 million than the rest of Europe combined in 2013.

The number of staff working at British banks and London-based foreign institutions who received pay and bonuses totalling more than €1 million (£731,300) hit 2,086 in 2013, according to the European Banking Authority (EBA).

The figure, the most recently available, is down from the previous year, but is still more than five times higher than any other EU country and makes up two thirds of the total number. In Germany, 397 bankers were paid €1 million or more, and in France the number was 162.

The EBA figures do not take account of payouts to London’s high-earning hedge fund managers, so the real number of €1 million-plus earners was likely to have been far higher.

The top-earning bankers in London received an average of €2.01 million in salary and annual bonus two years ago, compared with €1.58 million in Germany and €1.54 million in France, the EBA data showed.

However, the total number of bankers within the European Union who earned at least €1 million fell in 2013, despite the figures in the report predating the full phase-in of tough new rules on banking bonuses.

A total of 3,178 bankers within the European Union earned at least €1 million a year, including bonuses, down from 3,530 in 2012. Based on all staff at banks in the EU, 0.106 per cent were “high earners” in 2013.

This decline is partly explained by the EBA’s definition of a “high earner”, which is based on the €1 million amount. As two thirds of high earners are based in London, the exchange rate between sterling and the euro helped to contribute to the lower total.

Many bankers who earned just above €1 million in 2012 earned below that level in 2013, owing to the strength of the pound against the euro.

The EBA also cites the declining profits made by banks as contributing to the fall from 2012 and 2013.

The average ratio of bonuses to fixed pay also declined in 2013, according to the report. It was 104.27 per cent, meaning bonuses were only slightly more than basic pay, although the report said that “many businesses and institutions” broke the 200 per cent threshold.

The next report from the EBA for 2014 is expected to show “the full impact” of the EU cap on bonuses that came into effect last year which limits bonuses to no more than basic pay or twice that amount with shareholder approval.

Bankers have faced curbs on how their pay can be structured after taxpayers bailed out lenders during the financial crisis, sparking public anger at the level of bonuses some bankers were receiving.

However, some banks have since attempted to skirt round the new EU rules by developing new pay structures, with banks lifting basic pay through paying additional “allowances”.

The EBA announced last October that it was cracking down on this practice and said in its latest report that it was following this up to ensure banks were bought into line.

“All remuneration which is not fixed is variable; there is no third category of remuneration,” the EBA said.

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