The number of bankers earning €1m a year or more in the EU has started to fall even before the impact of a cap on bonus payments is fully felt, the bloc’s banking watchdog said yesterday.
There were 3,178 bankers in the EU on at least €1m a year, including bonuses, in 2013, down from 3,530 a year earlier, although that was partly due to exchange rates as two-thirds are based in London, the European Banking Authority (EBA) said.
It said its next set of figures for 2014, due to be published at the end of this year, will show a drop in the average ratio of bonuses to fixed pay, highlighting the “full impact” of the EU’s new bonus cap.
Bankers’ pay has faced curbs on how it can be structured since lenders had to be rescued by taxpayers during the 2007-09 financial crisis.
The cap, which will affect bonuses awarded from last year, limits a bonus to no more than basic pay or twice that amount with shareholder approval.
In 2013, the average ratio of bonuses to fixed pay was 104.27%, meaning bonuses were only slightly more than basic pay, for so-called identified staff or the high earners who are in key roles and come under tougher scrutiny.
That represents a fall from 108.74% in 2012 and 204.76% in 2010, but for some lenders the ratio was still 200% or more.
The report did not give a breakdown of banks’ individual pay deals.
The cap will force many banks to restructure the pay packets of their top bankers. Some tried to soften the impact of the bonus cap by lifting basic pay through paying additional “allowances”, a step the EBA ruled as being largely contrary to EU law.
“In addition, the report highlights that remuneration practices within institutions were not sufficiently harmonised,” the EBA said.
“In particular, the application of deferral and payout in instruments differed significantly across member states and institutions.”
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