UK Has Most High-Paid Bankers in EU
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More bankers in the United Kingdom were paid in excess of 1 million euros than in any other European Union country, according to new data released by the European Banking Authority.
Specifically, figures from the EU’s banking watchdog showed that 2,346 bankers earned more than 1 milion euros in the UK, compared with 739 in the rest of the EU in 2011.
More bankers in the United Kingdom were paid in excess of 1 million euros than in any other European Union country, according to new data released by the European Banking Authority.
Specifically, figures from the EU’s banking watchdog showed that 2,346 bankers earned more than 1 milion euros in the UK, compared with 739 in the rest of the EU in 2011.
Germany had the second- largest number of bankers paid in excess of 1 million euros, at 170, while there were 162 high-earning bankers in France. In eight countries in the EU, no bankers received more than 1 million euros, although in countries worst hit by the eurozone crisis – such as Cyprus, Greece, Portugal and Ireland – some bankers earned more than 1 million euros.
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The total amount paid out to Europe bankers was lower than the total in 2010 and does not reach the same highs seen in the U.S. banking sector, but the EBA report highlights how European banks kept handing out generous paycheques even as the eurozone crisis flared up and the EU introduced more stringent rules on pay.
Unemployment and recession savaged Spain, for instance, had 123 bankers who earned more than 2.4 million euros each, for a total for more than 300 million euros in 2011.
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Data published by the EBA also showed that the highest earners in UK banking took home average bonuses 3.5 times their base salary in 2011, down 6.1 times in the year before.
The findings, released for the first time by the EBA, are likely to further roil EU politicians who have been pressing banks to lower the amount they pay top executives.
The EBA will now publish the data on high earners annually as regulators attempt to analyse the way pay deals are structured, particularly as a new Europe-wide bonus cap comes into effect next year and will limit bonus payouts to the same level as salary, or at twice the level with explicit shareholder approval.
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“The data show what has been feared for some time,” said Nicholas Stretch, of law firm CMS Cameron McKenna. “Because London has a very large number of people with variable high pay, the forthcoming bonus capping rules… will have a particular impact on our financial services industry and lead to extensive changes in how remuneration is provided.”
“We clearly need reform that better aligns risk, responsibility and reward in banking,” said Pat McFadden, a UK Labour Party politician who sits on an influential British commission that recently proposed that bankers who take reckless risks be jailed.
“These figures illustrate the ongoing problem with huge salaries in banking at a time of austerity for most people. The problem with pay in banking is not just the high levels but that bonuses are paid out without risks being understood and on the basis of results that don’t look so good in the future,” McFadden added.
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