Like many European banks, SEB is being more open with the political hot potato of compensation, and it’s revealed that bonuses are starting to tumble.
SEB’s annual general meeting was yesterday, along with the publication of its annual report. It’s keen to point out that bonuses are becoming less of a feature of its compensation policy.
As the chart below shows, those in SEB’s merchant banking division received a bonus pool of SEK832m this year, or an average of SEK351.3k per employee. Last year, it was SEK1,025m, or a mean of SEK427.7k a head – a decline of around 19%.
Fixed costs are, however, increasing – albeit at a lower rate than the decline in bonuses. The amount SEB spent on salaries has increased by 7% year-on-year. Operating profit in this division increase by 14% to SEK8.3bn.
There’s another interesting chart pointing out the proportion of staff costs spend on bonuses. Last year, SEK1,411m was allocated to variable compensation across the group – or around 10% of total staff costs.
At its peak in 2007, SEB was spending 20% of total employee expenses on bonus payments.
Headcount has also shrunk across the group – SEB now employs around 18,900 staff, down from approximately 20,717.
Unfortunately, this doesn’t look like increasing significantly any time soon. SEB’s chairman, Marcus Wallenberg, admitted yesterday that higher capital requirements would inevitably mean profitability would be lower in the future than before the financial crisis.
Interestingly, however, in contrast to most financial institutions, the number of women working at the bank outstrips the number of men. In the UK, redundancies in the financial sector throughout the crisis have hit women disproportionately hard.