UK’s top bankers given bonuses four times salary
Figures from the European Banking Authority (EBA) revealed that the UK once more had by far the highest number of bankers earning more than e1 million (£831,000) in the European Union – at 2,714 in 2012 – 12 times as many high earners as any other country.
The total of 3,529 bankers across the EU is an 11 per cent increase from 2011 and amounts to almost £5.5 billion, the bulk of it from bonuses.
UK figures, also up 11 per cent from 2011, will put the City on a collision course with the new European Union bonus cap set to come into force next year.
Average total pay – including salaries, pensions and bonuses – for London’s top bankers surged 35 per cent to £1.6m.
And they picked up bonuses averaging 3.7 times their base salary, up from 3.5 in 2011.
The new EU rules will cap bonuses to a year’s salary – or a maximum of two years if shareholders approve.
At least 10,000 bankers in the UK are expected to be affected by the new bonus cap.
Any employee earning more than £416,000 (e500,000) a year is likely to be affected, and potentially, people whose bonus is at least £62,000 (e75,000) and 75 per cent of their fixed pay. The EBA expects to finalise details next month.
Chancellor George Osborne has filed a formal complaint against Brussels over the plans amid fears the move will backfire and drive up salaries.
But banks are understood to be planning to sidestep the rules by handing out monthly payments to affected staff.
Businesses such as Barclays, Deutsche Bank and HSBC are expected to cut bonuses and raise fixed pay to comply with the new rules.
The EBA data showed that Germany was the country with the second-highest number of top-earning bankers, at 212, followed by France with 177, up 9 per cent; 109 in Italy, up 14 per cent; and 100 in Spain, down by a fifth. However, the average remuneration for those 100 in Spain was £1.8m (e2.2m), higher than Britain and Germany.
A spokesman for the UK Treasury said: “Britain has been at the forefront of global reforms to make banking more responsible, including big reductions in upfront cash bonuses and linking rewards to long-term success.
“These EU rules on bonuses, rushed through without any assessment of their impact, will undermine all of this by pushing bankers’ fixed pay up rather than down, which will make banks themselves riskier rather than safer.”