UK bankers working for American firms JP Morgan and Goldman Sachs were left purring at getting the cream when it came to remuneration in 2016 compared with those working for British rivals HSBC and Barclays.
Those whose pay came originally in greenbacks trousered £1.1m (US$1.5m) while their long-suffering British counterparts were obliged to make economies in order to struggle by on just £730,000 (US$1m), barely enough to buy an apartment the size of a pantry way beyond the limits of the City, the Docklands and probably even Shoreditch.
To add insult to injury, the put-upon British bankers are already being forced to hock the antique Bentley and auction the Purdey shotguns on the news that their pay is half what it was three years earlier – in 2013 they were on twice the pay at £1.5m (US$2m) until European Union rules aimed at curbing bankers’ pay came into effect.
The Wall Street banks’ higher pay packages show how they have bounced back more quickly from the financial crisis than their peers in Britain, some of which have faced hefty post-crisis costs that have limited banker pay.
The data also shows that EU rules to rein in banker bonuses, blamed for driving excessive risk-taking in the run up to the 2008 crisis, are having an impact.
According to Reuters, JP Morgan paid 672 staff in senior or risk-taking positions a total of £740m (US$1.02bn) in 2016 for an average of £1.1m (US$1.52m) each.
Some 724 Goldman bankers took home an average of £1.09m (US$1.48m) each, according to Reuters’ calculations from filings released from the banks.
Says Reuters, “US banks were also able to capitalise more effectively than European rivals on spikes in volatility in financial markets in 2016 from Britain’s June Brexit vote”.
By way of evidence for this claim, Reuters points to the fact that Europe’s top investment banks’ trading in fixed income products fell by 6% in the second quarter of 2016 immediately following the UK referendum, while their five biggest US rivals reported a 21% increase to £9.68bn (US$13.1bn) in revenue from the same business.
Bankers’ pay in Britain remains a controversial subject ten years on from the financial crisis, Reuters says, pointing to a report by the Chartered Institute of Personnel and Development released today that showed that a median worker salary in Britain is about £28,430 (US$38,493), compared to that of a senior banker in 2016 of £782,000 (US$1.06m).
The news comes on the same day that many media outlets reported that today, the third working day of the year, marks the point at which the average FTSE-100 chief executive has already earned what the average UK employee will earn for the whole of 2018.