Earning seven figures in financial services remains a relatively rare event. Of the 2.8m people employed in the sector across Europe, only 3,865 of them earned over €1m, according to new figures released by the European Banking Authority.
But within Europe, the UK remains the place to be if you want to fall into the high-earners category. More specifically, investment banking in the City of London offers the greatest chance of bringing in more than seven figures.
There are 2,926 people classified earning more than €1m in the UK, according to the EBA figures. This is three quarters of the total. Of these, 2,075 work in investment banking. On a per head basis, asset management offers the biggest packages – €2.1m compared to €1.9m in investment banking – but just 176 people on the buy-side make the cut.
Asset managers have been fighting the extension of the bonus cap to the sector and this is reflected in the proportion of compensation allocated to bonus. On average, the ratio between variable and fixed compensation in UK asset management was 392%, compared to 120% in investment banking.
Germany is in second place overall, with 242 high earners, but the country has fewer investment bankers than France who fall into this bracket – 82 compared to 116 people.
As ever, there are some caveats. Firstly, most banks have now classified all senior employees as ‘code staff’ and therefore they fall under the high earners bracket. This figure increased from around 32,000 to close to 63,000 in the latest survey. Consequently, the number of high earners went up, but the average compensation went down as huge executive packages were diluted.
Secondly, these figures relate to 2014. Not only has average pay been slashed over the course of 2015, but deferrals have become harsher and the EU bonus cap has come into force. Banks have already hiked up salaries to compensate for this, and this is likely to be reflected in the next EBA report.
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