LONDON • Most European investment bankers received smaller bonuses last year as their employers cut costs and sought to meet shareholder demands for a greater share of profits.
But the financial services industry is still where the big bucks are, with the average salary about 30 per cent higher than the average wage in Britain, government statistics show.
Barclays followed other banks in Europe on Thursday by saying it had cut its bonus pool. It said it was paying £1.5 billion (S$2.64 billion), down 56 per cent from £3.5 billion in 2010.
Such bonuses were blamed for encouraging risk-taking and contributing to the 2007-2009 financial crisis, causing European regulators to cap them at 100 per cent of a fixed salary, or twice that with shareholder approval.
Banks tried to get round this by upping fixed pay and awarding allowances on a monthly or quarterly basis to raise basic pay for senior staff. But that was met with calls for more restraint by shareholders angry at European banks paying large salaries when most were struggling to turn a profit.
This appears to have begun to have an impact, with a fall of around 8 per cent in bankers' total pay globally last year, and bonuses down by more than 10 per cent, research firm Coalition estimated.
"The bonus pool is down and performance is up. So that should be a good thing for our shareholders," Barclays CEO Jes Staley said.
Mr George Kuznetzov, head of research at Coalition, said banks are also able to pay out less by employing fewer senior bankers and hiring junior, less expensive, staff.
Some bankers hope that with several banks nearing the end of major restructurings and cost cutting, combined with a bumper start for European dealmaking and market activity, 2017 could see pay pick up.