British bankers top millionaires' club

Nearly 2500 British-based bankers took home pay packages worth more than £1 million ($1.4 million) in 2011, according to figures from the EU's banking watchdog.

By InvestSMART · 17 Jul 2013

By InvestSMART ·
17 Jul 2013

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Nearly 2500 British-based bankers took home pay packages worth more than €1 million ($1.4 million) in 2011, according to figures from the EU's banking watchdog.

In 2011, 2436 British-based bankers earned in excess of €1 million, down from 2525 the previous year, according to a study by the European Banking Authority.

The most senior bankers working in Britain took home on average €1.44 million in 2011, down from €2.3 million in 2010, highlighting the impact of the downturn in the financial services industry. In total, the country's highest-paid financiers shared a salary and bonus pool in 2011 worth €3.51 billion.

However, based on average pay levels, bankers in Spain earned the most, with earnings of €2.26 million in 2010 and €2.44 million in 2011. There were 125 individuals paid more than €1 million in Spain.

The figures show the dominance of the City on the European market and that bonuses remain high as a multiple of fixed earnings despite Europe-wide efforts to crack down on variable pay levels.

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Frequently Asked Questions about this Article…

How many British-based bankers earned more than €1 million in 2011?

According to a study by the European Banking Authority, 2,436 British-based bankers earned more than €1 million in 2011, down from 2,525 the previous year.

What was the average pay for the most senior bankers in Britain in 2011 versus 2010?

The most senior bankers working in Britain took home an average of €1.44 million in 2011, down from €2.3 million in 2010, highlighting the impact of the downturn in the financial services industry.

How large was the total salary and bonus pool for Britain’s highest-paid financiers in 2011?

Britain’s highest-paid financiers shared a salary and bonus pool worth €3.51 billion in 2011.

Which European country had the highest average banker pay in 2010 and 2011?

Based on average pay levels in the EBA study, Spain had the highest banker pay: €2.26 million in 2010 and €2.44 million in 2011, with 125 individuals in Spain paid more than €1 million.

Do bonuses still make up a large part of banker pay in Europe despite efforts to curb variable pay?

Yes. The figures show that bonuses remain high as a multiple of fixed earnings across Europe despite Europe-wide efforts to crack down on variable pay levels.

What trends in banker pay between 2010 and 2011 should everyday investors note?

The EBA data shows a fall in both the number of UK bankers earning over €1 million and the average pay for senior UK bankers between 2010 and 2011, while Spain’s averages rose — a sign that the downturn affected pay levels unevenly across markets.

Who published the banker pay figures and why does that matter to investors?

The European Banking Authority published the figures. Investors should pay attention because compensation trends can reflect industry health, risk-taking incentives and regulatory pressure — all of which can influence bank performance and shareholder returns.

How should investors use information about high banker pay and bonuses when evaluating banks?

Everyday investors can use pay and bonus data as one indicator of governance and cost structure: persistently high variable pay may signal aggressive risk incentives and higher costs, while declines in top pay can reflect a weaker earnings environment. Combine this with other metrics when assessing a bank’s outlook.