A new report reveals the gap in remuneration between analysts and CEOs at major banks.
Salary benchmarking site Emolument.com collected salary and bonus data from 1,211 Front Office Analysts in their first 3 years of employment at banks in Europe and the United States.
CEO versus Analyst income
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Analysts looking to make the maximum possible amount of money should apply for jobs at the banks which pay their CEOs most handsomely. As the chart above illustrates, the three banks with the highest-paid CEOs, Goldman Sachs, Morgan Stanley, and JP Morgan, are also among the top 4 for analyst remuneration.
JP Morgan pays analysts an average of $111,000, while Goldman Sachs and Morgan Stanley both pay $110,000 on average. JP Morgan’s CEO earned $20 million, Morgan Stanley’s CEO took home $22.5 million and Goldman Sachs tops the list at $24,000,000.
Analysts vs CEOs Which banks are the “fairest”?
At the same time, those banks which pay the most also have the highest gap between Analyst and CEO pay. Goldman Sachs ratio is 1/218, while bottom ranked Santander is just 1/67.
Santander may be one of the fairest paying banks, but it also pays below average salaries and bonuses ($81,000 per year for analysts and $5.4 million to its CEO).
Deutsche Bank may appear to be the fairest paying bank, with a CEO pay package of $7,000,000 and the highest analyst remuneration, at $114,000, but the bank has a unique arrangement which skews its results. Until recently the bank had two CEOs, both of whom received the remuneration displayed in the table.
Alice Leguay from Emolument explains that “pay at top banks is elastic for CEOs: when raising CEO pay, analyst packages can stay where they are, as those banks already pay top dollar in the junior market.”
Fairer banks may not be paying their analysts a higher proportion of CEO remuneration out of the kindness of their heart. “On the other hand, if Santander were to match Goldman’s analysts/CEO pay ratio, it would bring analyst pay down to $25,000, which would definitely exclude it from attracting talent. Banks like Santander are stuck with narrower analyst/CEO pay gaps, and not necessarily out of choice,” Leguay continues.