Did you know that Standard Chartered pays very large bonuses with limited deferrals?

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Standard Chartered

Where the rich bankers work

Standard Chartered has released a lot of investor information today. It includes a remuneration report and Pillar 3 disclosure revealing how much it paid its code staff for 2011.

If you thought, as we admittedly did, that Standard Chartered doesn’t pay well, you will be pleasantly surprised.

Firstly, the bank’s director’s remuneration report, reveals eight unnamed bankers beneath board level earning $5-$10m, as shown by the table below.

 

Secondly, the report reveals 5 people in Hong Kong earning from $5m to $12.5m (suggesting most of the 8 highly paid staff specified in the table above are located outside the UK).

Thirdly, the report reveals that Standard Chartered has hardly any code staff, and that those it does have are paid generously.

Hence, while Deutsche decided to make all its MDs code staff last year (code staff being the staff subject to the most rigorous pay constraints) and upped its total code staffers to 1,250, Standard Chartered said it only had 112. Moreover, most of Standard Chartered’s code staff were executives – only 35 were simple traders and risk takers.

In 2011, Standard Chartered paid the average code staffer £1.37m. This is far more than the £727k on offer at RBS, compares favourably with Deutsche and UBS (£1.1m) and is on a par with the £1.3m paid to code staff at Credit Suisse. Stan Chart’s non-management code staff received even more (£1.56m).

Most notably, however, Standard Chartered continues to favour a bonus-heavy compensation model. In 2011, only 17% of the compensation paid to its non-executive code staff took the form of base pay. This was lower than at any other bank. At RBS, for example, 37% of non-exec code staff pay came in the form of salary last year.

Equally promisingly, Standard Chartered has a maximum deferral rate of 60% for variable compensation (although code staff are required to hold a specified minimum number of vested ordinary shares). And it allows individuals with more than $120k deferred to elect to have half delivered in cash.

Sounds too good to be true? The only downside is that Standard Chartered appears to be trimming staff in London. The graph below, taken from research firm IMAS suggests it eliminated 18% of its FSA registered persons in London last year.

Registered persons at Standard Chartered 

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