Banking bonuses are, of course, being squeezed. In the UK, not only will it be capped at 100% of salary, but banks’ cunning dodge of the cap – role-based allowances – could also be subject 50% income tax if Labour topples the Tories in the upcoming general election.
Banking pay may be on a slow downward trajectory, but don’t expect any sympathy from people working in other industries. Finance pay outstrips other vocations from the outset and the differential only increases the further you progress into your career. So says new research from Emolument.com, outlined in the table below.
As the table above shows, pay in law is competitive with the finance industry during the first five years, but after that – assuming you can stick it out – compensation in banking pulls away, drastically.
Emolument has also produced the table below. As this shows, finance is also the only industry where bonuses account for a significant proportion of compensation. Senior bankers receive – on average – 48% of their total compensation in the form of variable pay. The media industry is the nearest competitor with 26%, or nearly half that of the financial sector.