08.19.2021

Banking High Earners Relocate from UK

The European Banking Authority (EBA) published its Report on high earners for 2019. The analysis shows that in 2019, 4 963 individuals working for EU banks received a remuneration of more than EUR 1 million, which is mostly the same as in 2018.

The average ratio between the variable and fixed remuneration for high earners decreased from 139% in 2018 to 129% in 2019. Institutions’ preparation for the UK withdrawal from the EU has affected the distribution of high earners across the EU with a number of high earners relocating from the UK to the EU.

In 2019, the largest share of high earners of 3 519 (71% of the total number of high earners), was located in the United Kingdom (UK). Most of the Member States across the EU registered a slight increase in the number of high earners, particularly Germany, France, and Italy. The increase of high earners resulted mostly from the impact of the relocation of staff from the UK to EU27 as part of Brexit preparations. In addition, for some institutions, the overall good financial results, particularly in corporate banking, and the ongoing restructuring and consolidations, which led to higher than usual severance payments, played an important role in the overall increase of high earners.

The average ratio between the variable and fixed component for all high earners decreased from 139% in 2018 to 129% in 2019. In the business area of asset management, the average ratio of variable to fixed remuneration decreased from 378% in 2018 to 339% in 2019, still far exceeding the maximum ratio of 200%. This is mainly due to differences in the national implementation of the Capital Requirements Directive (CRD), that in many cases allows for waivers of some provisions when certain criteria are met. Following the amendments of the CRD, which started to apply as of the end of 2020, a higher degree of harmonisation is expected.

Legal basis and next steps

This Report has been developed in accordance with Article 75(3) of the CRD, which mandates the EBA to collect information on the number of individuals per institution that are remunerated EUR one million or more per financial year (high earners) in pay brackets EUR one million, including the business area involved and the main elements of salary, bonus, long-term award, and pension contribution.

The Report includes data reported by UK institutions for high earners, as during the transitional period, UK institutions continued reporting data on high earners at EU consolidation level, covering all subsidiaries and branches established in EU Member States.

The EBA will continue to benchmark remuneration trends biannually (e.g. for the performance years 2019 and 2020, a benchmarking exercise will take place in 2021 and will be published in the first quarter 2022). In addition, the EBA will continue to publish data on high earners annually to closely monitor and evaluate developments in this area. The next report based on 2020 data will no longer include data for the UK.

Source: EBA

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