Europe’s banks and investment firms are increasingly paying out million euro compensation. In 2022, the most recent reporting year, there were 2,342 million-plus earners, a fifth more than in the previous year, the European Banking Authority (EBA) reveals in a report. And the number has doubled since 2014.
The majority of high earners, numbering 2,017 individuals, work for banks, while the remaining 325 work for investment firms.
According to the EBA, the increase is due to business expansion, and positive developments in business lines. In addition, salaries rose to compensate for high inflation in 2022.
The UK, which has Europe’s largest financial sector, is not included following Breixt. Hungary, Cyprus and Iceland reported no top earners.
Germany is the front runner
Germany ranks first with 653 people, an increase of 11%. Unlike in Europe as a whole, most of the top earners in Germany do not work in investment firms, but in senior management. The German investment industry employs comparatively few million-plus earners, with just 44 people.
The limitation of variable remuneration in banks is clearly reflected in the statistics. The high earners in the banking industry receive a large proportion of their remuneration as a fixed salary, at 62%. Investment firms pursue the opposite policy: 18% is paid as fixed salary components, while the remaining 82% is made up of variable components. Variable remuneration is particularly high in The Netherlands. The country has 115 high earners for investment firms alone, more than anywhere else in Europe.
This sometimes takes on extreme dimensions. The top earner in Germany works in portfolio management at an investment firm. This anonymous person earned 13.8 million euros — almost exclusively through variable bonuses.
The top earner in Europe is in France, where someone from an investment firm earned 30.7 million euros, again almost exclusively through variable bonuses. The same picture can be seen in Ireland, where one person earned 24.5 million euros. The highest-paid employee at a bank is in Spain, where a senior manager earned 13.1 million euros. Germany’s highest-paid banker, meanwhile, earned 11 million euros.
Female top earners are rare
The gap between the genders is immense. There are just 194 women on the list, compared to 2,147 men. This means that 92% of all top earners in the banking and investment sector are male. In Germany, the ratio is similarly unequal at 50 to 603. The imbalance runs through all countries without exception. In the investment firm segment, as many as 97% of all top earners are male, and in several countries there are no women at all at the top of the income ladder.
This is the first time that the EBA has broken down the top earners by gender, and the authority is not happy with the results. „Further improvements are needed to achieve gender balance in the financial sector and especially in the highest paid positions“, it wrote.
