BEST PAYING BANKS FOR MANAGING DIRECTORS

BEST PAYING BANKS FOR MANAGING DIRECTORS – JPMORGAN TOPS LIST, BUT IS LEAST “FAIR”

BEST PAYING BANKS

While banking is a lucrative career, all banks are not equal: views on pay, diversity, culture, location differ at each and every institution. Here, we shed some light on one of those aspects: which are the best paying banks overall and also who will share profits with junior bankers the most?

benchmark your salary below!

Emolument.com analysed 1,433 salaries from Managing Directors (MDs) and Associates in London to create a league table of the best paying banks. We found that J.P. Morgan pays its MDs 35% more than runner-up Morgan Stanley. Also, MDs at Deutsche Bank and Barclays are rewarded as generously as they would be working for a US bank. At MD level, bonuses represent 37% to 70% of total compensation. As for junior bankers, don’t be fooled, working for a bank which pays its MDs the highest doesn’t necessarily translate into higher remuneration for Associates.

The name is Morgan. J.P. Morgan: For MDs, J.P. Morgan tops our list of best paying banks with a staggering median total compensation of £919,000, 35% more than the runner-up Morgan Stanley. For Associates, Morgan Stanley takes the lead paying its employees 26% more with J.P. Morgan falling behind on 7th place. So, start at Morgan Stanley as an Associate, and then move to J.P. Morgan at a later stage of your career!

US versus European Banks: US banks feature heavily in the top five, both at MD and Associate levels, with a few incursions from European banks, despite the fact that they have consistently under-performed their U.S. competitors since 2009 [1]: Deutsche Bank MDs make as much as the ones at Goldman Sachs. Will the crushing first quarter of 2016 at Barclays and Deutsche Bank push bonuses down, or will the banks invest in attracting and retaining key players amidst their restructuring?

Stick around for large bonuses: MD bonuses represent 37% (UniCredit) to 70% (J.P. Morgan) of total annual compensation. On the other hand, for Associates that number falls between 13% (Lloyds Banking Group) and 38% (Goldman Sachs).

Graph 2. & Table 2. Showing the ‘Fairness Points’ * of each company by the MD Median total income.
*To study how fair the distribution of funds is within each company, we created a ‘Fairness Scale’. We chose the maximum of the scale to be 20 points for demonstration purposes. By calculating the percentage of Total Associate Salary to Total MD Salary we attributed all 20 points to the ‘fairest’ company (Credit Agricole) with the highest percentage (30%) and gave the remaining companies points accordingly.

All’s fair in love and business. Credit Agricole, Societe Generale, Commerzbank and Credit Suisse, banks with the lowest MD earnings score the most fairness points, while J.P. Morgan, the bank with the highest paid MDs, comes last by a wide margin. If J.P. Morgan was as ‘fair’ as Credit Agricole it would pay its MDs £788,000 instead of £919,000 and increase Associate annual compensation to £236,000 from £105,000.Alice Leguay, Co-Founder & COO at Emolument.com said: ‘We expect that our Fairness Index will vary from one year to the next depending on the bank’s needs to retain certain generations of employees. As we saw this year, Associates across the board saw a substantial bump up in their bonuses, while in the previous couple of years, they had been overlooked in favour of revenue-generating staff such as MDs and Directors.’

[1] http://www.wsj.com/articles/u-s-banks-take-global-leadu-s-banks-take-global-lead-1438300606