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While every star investment banker would love to believe they’re the Cristiano Ronaldo of the financial sector, the fact is that top executives’ pay pales in comparison to elite sports stars. Are bankers, in fact, slightly underpaid?
New figures would suggest so. Top financial executives earn an average of $10m a year less than elite sports figures, and $9m a year less than their contemporaries in non-financial industries, according to data released by banking analyst Dick Bove.
With the furore around the ‘rewards for failure’, and subsequent clampdowns on banker pay, are we losing sight of the fact that other industries pay just as well for their top talent?
Bove also points to the fact that the average NBA basketball player earns $5m a year, while the average Goldman Sachs employee looks set to make $800k this year.
Obviously, this data comes at a time when governments are seeking to limit banker pay, while the institutions themselves make counter-claims about the need to pay well in order to secure top investment banking talent.
City minister Lord Myners would disagree with this sentiment, saying recently: “Derivative traders are not footballers with unique talents, and should not be paid as though they are.”
He added that executives in the financial sector are “over-rewarded for the skills they have.”
So, are bankers being over- or under-rewarded for their skills? Or are they genuinely unique and talented? Your thoughts please…
If Lord Myners genuinely believes what he is saying – ciytfolk are overpaid, then he should set an example and give back the money he was paid when working in city, which by his own admission he did not deserve . Thought not!
How many more stupid pointless soundbites are we going to have to put up with from the likes of Myners & co seeking to establish faux anti-City street cred?
Bankers are certainly not underpaid! The industry is pays very well indeed which is why it manages to attract good people. They may not have a god-given talent, but they are bright, well-educated folk who could easily move to other industries if they’re not sufficiently incentivised to move into banking.The question is whether this would be a bad thing.
I remember the time when most footballers became pub landlords when quit because they weren’t paid enough to retire comfortably. Can we expect and influx of ‘Bankers and Balls-up’ pubs opening soon?
Bankers are not like footballers. The average footballer is more intelligent…
Anybody can be trained very quickly (as long as they are motivated to learn) to work in finance. By and large, the people sitting in the high paying seats on a bank’s dealing floor could be substituted for many others who could do just a good a job. If you are given a trading book that creates millions of pounds a year, it is not your ‘skill’ that creates that, it is the banks franchise, capital base and many other things before your ‘skill’ even comes into play. Having spent many years working on the dealing floors and recruiting into the industry the people we recruit are just hard workers, who get a bit lucky along the way.
The same is not true for the football profession. People could not be given a month of training and be sent out to play semi-pro and expected to provide the same quality of input as the person they are replacing.
I.e. banking is a lower skilled as so workers should rightly be paid significantly less.
Dick Bove’s comments were completely ridiculous and irrelevant.
Bankers bonuses are not the issue here. Although, once again here we have someone who believes in the ‘star’ banker nonsense. Bankers have no relevance to footballers. Footballers entertain and bring joy to the common man. They also give back through community projects. When was the last time a bank did Joe Public a favour? Footballers can’t crash the mortgage market and they certainly don’t leave a huge debt burden for our grandchildren to pay off, just because they broke the most simple rules of banking and corporate finance.
Private firms can pay their staff whatever they want if the shareholders approve, but you just cannot pay bonuses to bankers in a company who has received government money as an alternative to bankruptcy.
Policy makers are keen to divert attention away from their own foolish choices but the fact remains. Banks should fail.
I knew a guy in junior high school who couldn’t talk very well and collected sticks, he used to call the teacher ‘mum’ and during recess we would give him money to dance. Then sell him sticks to get our money back. He went on to become a professional footballer.
Bankers are overpaid and clients are overcharged. It is a great industry to work in :-)
Football is not underwritten by the taxpayer. If footballers don’t perform their careers are over (and in any case their careers are short and injury prone). When the going gets tough, bankers incl Goldmans just look for the State to bail out their stupidities. So no they cannot justify these ridiculous pay packages.
Who cares about footballers? only stupid british like watching and paying them… I switch to another channel every time when the TV is playing football games
I agree completely with Intelligent above. Footballers comprise a significant majority of the lower-class scum that pollutes the streets of Britain. Fortunately, where I live, in Kensington, all the residents are of a substantially higher social class, as well being delightfully attractive and intelligent, than footballers could ever be, and so life is rather calm and enjoyable. As they say, keep the prices high to keep the plebs away!
Additionally, the existence of high fee-paying independent schools allows those us from the higher classes to shield our children from the plebs in the comprehensives!
I would like to retract my earlier comment and agree with Intelligent and Associate above.
trust is no unique talent ,but can you trust anyone with your money?definitely not.trust is expensive.clients have to pay
Associate and Intelligent – part of the exclusive bedwetting Elite!
There is no comparion between a footballer and the banker. Both are very different professions, which warrants different treatments one is very short lived while the latter continue over three decades.
Just a comment I guess but “bankers bonuses” annoys the hell out of me. The people to blame, insofar as anyone group can be singled out, are the bank leaders, not the clerks in Finance, Managers in ops or the dealers on the floor, its the very top of the banks that are largest responsible for this and yet here we (non-CEO/CFO) types left swinging in the wind as there are “no bonuses”.
Its not BANKERS BONUSES, its BOARD BONUSES