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Lunchtime Links: Is 200k really a lot of money?

Liberal Democrat treasury spokesperson Vince Cable has added a few of his own proposals to the banking reform debate. Most notably, they include the suggestion that all bankers earning more than 200k should be named and the details of their compensation revealed.

Cable appears to have selected 200k as the cut off point for naming (and shaming) as it’s the salary of the Prime Minister. It’s also around six times the average UK household income at the last count. However, 200k isn’t unheard of for a first year associate. If Cable’s proposals were enforced (unlikely), the resulting list is likely to very long.

“One of the consequences of this [the Tory reform plans] could be that Barclays would choose to spin off Barclays Capital. We are relaxed about that.” (Independent)

Maybe Diane Jenkin’s flamboyant ways weren’t so good for her husband after all. (Dealbook)

Obama says bankers feel no remorse. (Reuters)

Goldman has absolutely no plans to give up its status as a commercial bank. (Dealbreaker)

Hedge fund execs moving back to banking. (Dealbook)

Moelis & Co hires Caroline Silver, formerly vice chairman of EMEA Investment Banking at Bank of America Merrill Lynch. (Yahoo)

Deloitte has hired 100 people and seven new partners for its insolvency practice so far this year. (Bloomberg)

Chinese university graduates haven’t got jobs after all. (CNBC)

Ex-Lehman banker spent entire year looking for something new. (Wall Street Journal)

Buy it now: Brand new Lehman Brothers T shirt, free shipping. (eBay)

Comments (32)

  1. “200k isn’t unheard of for a first year associate…”

    “IS 200k really a lot of money?”

    Sarah Butcher has finally revealed her true colours. With journalism like this that hacks back to the days before the financial crisis shows absolutely no lessons have been learnt. Yes Sarah 200k a year really is A LOT OF MONEY!

    A lot of (senior) bankers in tier 2 and tier 3 firms can’t even make that. Are they less than “associates” as you put it?

    I sense Sarah you have a disturbing lack of humility. Just because you write about investment bankers doesn’t entitle you to the swagger of a top banker from your favourite firm, Goldman Sachs.

  2. Mark. Sorry to have offended (incensed) you. I didn’t say 200k wasn’t a lot of money, was merely asking a rhetorical question. People who don’t make that are no less bankers than those who do. Equally, teachers (and journalists) who make far less than that are no less for their pay. However, it remains true that a relatively high proportion of people in tier one firms – not just Goldman Sachs – make more than this. If 200k’s the cut off point, a lot of people will be on the list.

    Sarah, Editor, eFinancialCareers Reply
  3. Atypical Front Office Billy Banker: Earns 200K, owns Chelsea pad and Porsche
    Atypical teacher: Earns 25K, drives a clapped out Mondea, lives in Chelmsford
    Atypical Premiership footballer: earns 2 Million, lives on a country estate in Cheshire, drives a Lambo/Ferrari/Bentley etc
    Atypical Paramedic: Earns 30K, lives in Croyden, drives an Ambulance
    Atypical married father of 2 kids: Earns 27.5K, drives an old Audi estate, puts his kids through a decent government school, coaches the local under 9’s football team, pays the mortgage, enjoys a beer at the pub watching the Premiership on weekends, and thinks a family holiday to Costa del Sol or Sharm el Sheik is the bollocks.

    Who generates the greatest value?
    Not really relevant to the topic I know, but worth a thought!

  4. So the list will be very long. And everyone in the UK who earns less than 20K a year (which is much closer to the median and modal average incomes in the UK, not the deeply misleading mean) will know who to string up first once the revolution comes.

  5. 200k a week- now that’s a lot of money. At least John Terry is in the entertainment business rather than the ‘bleeding britain dry’ business known as modern day banking.

  6. I think on average your Banker who isn’t a Trader or working in Retail tends to pull in somewhere between 35k – 70k for a middle of the road job (middle management & specialisation) and for many people that’s quite a substantial salary.
    Those who are lucky enough to be in the fast lane of an investment bank (14-16 hour days, 4-5 hour sleep, 24/7 on call thanks to blackberry, weekend spent on researching and business trips) may begin to see those kind of numbers or possibly division Directors who’ve been in the industry for 20+ years.
    My question is why the naming and shaming? The government is and has always been responsible for setting the conditions of the work place and writing policies surrounding the kind of incentives that can be offered by any company. Surely if someone is doing a good job you wouldn’t go around naming and shaming them would you?
    and if someone wasn’t performing at their job maybe they should get demoted, pay cut, lose their job or not get a bonus.
    But naming and shaming takes the UK one step closer to being an outright lynch mob, allowing the public to vilify people over negative press, jealousy and envy. The government is merely trying to find a scapeg

  7. In most countries of the world “naming and shaming” in this manner would expose the individual to significant risk of kidnap and/or worse.

  8. to CRAIGIM: this is the only interesting paragraph in this list. Sarah’s ramble about how the value of people is not defined by their salaries is a cheap shot to try to get out of what is revealed: she likes everything about banking, the sexy suits, the cars, the bonuses, and whatever else she imagines. This is why she writes about it on a daily basis. And because she is not alone in loving this industry, it will be back in full force! Let’s go securitzation!

    Securitize This Reply
  9. @Securitize this: You’re right, it’s the suits that get me. It wouldn’t be the same if everyone were in chinos.

    Sarah, Editor, eFinancialCareers Reply
  10. Craigim you are either witty or illiterate. Your examples are probably all atypical (if you are not witty but illiterate look it up).

  11. Unfortunately for Vince this will mean that the names of the consultants who give him his claptrap advice will be revealed thus making him look like a monkey for contributing to the salary of someone on greater than 200K.

    Vince you have some reasonable ideas, unfortunately this is not one of them!

  12. Why “name and shame”?

    There is no benefit of doing such a thing.

    This country is fast becoming a place where high-earners avoid working.

  13. Naming and shaming is nothing more than the old envy syndrome. Politicians want to get elected/stay elected and the regulators want to keep their jobs while not doing much.

    By all means name and shame the likes of Madoff and other criminals who steal but not regular salaried workers some of whom just happen to be on a team of high performers and benefit from bonuses.

  14. 1. Why just bankers? Why not put all people with gross income over 200k online?
    2. I understand 1% of the population makes over 120k. 1% of 30m is 300k, right? My guess is that half of these are in London and half of those are in Financial Services and half of those are in banking. So about 40k in total, bankers earning over 120k gross.Which would point towards a population of about 15k earning over 200k?
    3. Great case study above, don’t you think? Can I have a bonus?

  15. The average salary for the circa 300k City workers is roughly around 90k in 2009. That means most people in the City are making less than 3 figures.

    A reasonable estimate is that around 30k people would find themselves on the 200k+ list today.

    If they were to calculate it differently, and target those who made more than 100 per hour (roughly 200k for a 37.5-hour working week), then you would probably see fewer than 3k workers on the list.

    Most workers in the 200k+ bracket average perhaps 80 to 100 hours per week. That works out at an hourly rate of roughly 40 to 50 per hour. That is less than what a reputable plumber charges…

  16. enough nonsensical, made up statistics. Anyone who’s worked in a bank for longer than a couple of weeks knows that 200k a year *is not* a lot of money, not in that context.

    Think of the costs associated with living in London zone 1/2 at a decent standard of living. Meaning single-person accomodation and reasonably generous leisure expenses (without getting to silly excesses like making it rain with pink Cristal bottles at the club).

    If you do, you’ll realize that it takes well into the six figures, which is why virtually *anyone* working in a revenue generating position at a bank (and even some support staff), except maybe some very junior employees, make that much money.

    If you don’t like that, or if you don’t like the way this website approaches the subject, then go read some other website instead of one that deals with Financial Careers, because Financial Careers are all about Money, not about ideology.

  17. “So the list will be very long. And everyone in the UK who earns less than 20K a year (which is much closer to the median and modal average incomes in the UK, not the deeply misleading mean)”

    What absolute rubbish. It is amazing to see the number of people who actually believe comments similar to the one above. The median salary in the UK is certainly closer to 35k. Anybody with any degree of intelligence will begin to earn 30k after 2 years in full-time employment.

    Can people please stop trying to portray themselves as being in touch with the common folk by suggesting that 20k is average when it quite clearly is not.

    A retail employee may earn, say, 25k. Sure. But, a retail employee is not employed a position that pays an average salary for a developed economy, and especially an economy that is driven by professional services!

  18. 200k really isnt alot of money. 2 million is though

  19. I agree with the comment last week that the average salary for a good journalist is between 75 & 150k pa. In fact, I believe I have often seen Sarah walking down the Kings Rd.

  20. 200k is simply not a lot of money…125k post-tax give-or-take? It will all disappear in a pleasant but hardly mind-bendingly lavish fashion: 34k on rent, 8k on getting around (mix of cabs, tubes, trains), 10k on dull living overheads, 1k on lost work receipts you can’t be bothered to claim, 15k on going out, 14k on holidays (flights, hotels, trains etc.), 5k on tennis lessons/golf/some hobby or other, 3k on big things for the home (some years zero, some years 8k), 15k on a car (running costs/amortisation of purchase costs…if you drive), and the remaining 20k is what’s left over to save for a flat deposit (equity of c.150k will be needed as a deposit for anything half-suitable in London), invest, put into a pension etc….fine, it’s a decent life, but you’ll not have a country house, you’ll travel economy every now and then, you’ll get a tube pretty often, not all your suits will be tailored…

    Sure, plenty of unfortunates earning 200k to 250k today would have hoped to be earning 450k to 600k in 2006 markets, which does allow for slightly more rapid wealth accumulation and removes any need to turn right on the plane.

    Norbert Agglomerator Reply
  21. Noberrt you are spot on. This is London, if you want a decent (noe excellent ) lifestyle you need just about that

  22. Sarah : simple question and few advices. How much you are on ? Median is around 40k in your profession for someone with a few years experience in a large London media group I won’t name, so I guess that if you were not too daft to sell yourself to Dice: you are around 40k . Your swine flu doesn’t do you much good and your legacy seems to be really to make this website a Sun 2. How come, whenever I read an article of yours, it provokes a big laugh for me and sadly : a huge disapointment. I suggest (please, I beg you) : For the sake and respect of eFinancials readers passing by to look for jobs: Find yourself an other one (job that is). What about an other editor’s job is some useless women magazines read by some squashed pea brains (plenty of those out there). You’ll have more successes and find readers levelling with you IQwise. Please , have a rest to take care of your pig flu (it seems to cause some damages in your brain, hopefully curable with time) and take it easy on the cakes : it will make you fat (if not already). By the way: Like the PM, I am on 200K. It’s a lot of money and 99.5% of the time unheard of for a 1st year associate regardless of his employer.

  23. Thank you for the kind advice Donald. I am glad that you are earning 200k. However, this seems somewhat surprising as you are unable to distinguish between one paragraph and the next.

    Sarah, Editor, eFinancialCareers Reply
  24. T1FJ is talking out of his/her bigoted a***. 20k IS the median salary. The statistics are in the public domain. His/hers come from lala land. “Anyone with a degree of intelligence”. So everyone earning above the median but below the mean is too stupid to better themselves! Like most of the nurses in the NHS for example.

  25. @Sarah – that was the best put down I’ve read on this site. Respect!

  26. I don’t know if it is a lot of money but the reality is if you work in research no chance you are going to get near to this amount.
    I have a PhD is Financial Economics from a top UK university worked as a research analyst for 2 years, same 14-15 hours and did not earn 40K.
    Fortunately decided to move back to academia as a Senior Lecturer and not only earn more but also have a better working-life balance.
    My point is it doesn’t matter the ones on 200K are a minority and if the government want to name and shame them would not make any difference.

  27. If a miracle happens and I earn 200K this year, I would be proud to be named and shamed!!

  28. Of course 200k is a lot of money when one cosiders that only 1% of the population have had an opportuntiy to earn this amount.

    Those foolish enough to claim otherwise because of the assumed ease they have in earning this amount again are in for a nasty suprise in 2010 & 2011.

  29. Ex-Analyst – hard to believe you made so little… I am less qualified than you (at least on paper) and more than twice than you in my first year…

    Not Finance PhD Reply
  30. Vince Cable say 200k is the salary of the PM, i would say GB receives much much more than this, dodgy expenses, never ever having to put his hand in his pocket for anything like, utilities bills, food, travel, accommodation and everyday expenses. MP’s are on more than 200k pa and what on earth do they produce?…nothing

    A half decent trader and banker will at least make double his 200k package for his house. What does an MP produce, save scorn, derision, public antipathy??

    Stop calling the kettle black Vince.

  31. 200k is a lot of money in the ‘real world’ according to the bbc.co.uk

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