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More British bankers earn 1 million euros than in rest of EU - study
July 15, 2013 / 1:07 PM / in 4 years

More British bankers earn 1 million euros than in rest of EU - study

LONDON (Reuters) - More bankers in Britain earned 1 million euros $1.3 million (861 thousand pounds) in 2011 than in the rest of the European Union combined and would easily bust a planned cap on bonuses, figures from the bloc’s banking regulator showed on Monday.

Two men read newspapers in the financial district of Canary Wharf in London August 17, 2011. REUTERS/Kevin Coombs

Publishing figures on bank pay for the first time, the European Banking Authority (EBA) said that 2,436 bankers based in the UK pocketed 1 million euros or more in 2011.

The EBA’s proposed cap sets a basic 500,000 euro salary threshold, above which a bonus can be no higher than fixed pay, or twice fixed pay if there is shareholder approval.

Britain had opposed the cap but was outvoted by EU countries that believe it will curb excessive risk-taking intended to win large awards, as in the run-up to the financial crisis. The cap will apply to awards for performance in 2014 and onwards.

Of the British bankers earning more than 1 million euros, 1,809 worked in investment banking, 85 in retail banking, 182 in asset management and 360 in other business areas, the EBA said in a report that is part of data-gathering efforts as it draws up rules to help it to apply the bonus cap.

Senior bankers in Spain, the banking sector of which had to be bailed out by the European Union in 2012, had the highest average pay of any EU country in 2011 at 2.44 million euros - a million euros higher than in Britain.

The regulator said that only 170 bankers based in Germany earned more than 1 million euros. It found 162 similarly well rewarded in France, 125 in Spain, 96 in Italy and 36 in the Netherlands.

“The data show what has been feared for some time,” Nicholas Stretch, of law firm CMS Cameron McKenna, said.

“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.”

The UK figures include high earners from domestic players such as HSBC Holdings and Barclays, as well as from units of banks based elsewhere in the EU, such as Deutsche Bank, and from other international lenders including Goldman Sachs Group and JP Morgan Chase & Co.

Some countries, such as the Czech Republic and Estonia, had no million euro earners, while Poland, a sizeable country in EU terms, mustered only four.

Ireland, which was almost bankrupted by its banking crisis, had 21, most of whom worked in investment banking. The key Scandinavian banking centre of Sweden, meanwhile, had only 14.

The EBA’s data on the ratio of fixed pay to bonuses showed that the vast majority of high earners in 2011 would have bust the cap by between two and four times, with London’s investment bankers at the top end of the scale.

Banks are changing how they pay staff to ease the impact of the cap, such as by bumping up fixed pay to bring down the ratio.

Editing by David Holmes and David Goodman

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