The accounts in the bankers’ pockets
What emerges from the EBA report on the income of bank managers in Europe. The article by Emanuela Rossi
Managers who earn more than 1 million euros are on the increase in Europe: in total there are almost 2,000 of which 351 in Italy. This was stated by the European Banking Authority (EBA) in its report on high incomes for 2021. The "significant" increase compared to 2020, writes the institution led by José Manuel Campa, is due "to the good overall performance of the institutions , particularly in the investment banking, trading and sales sectors, to the continuous transfers of staff from the UK to the EU and to the general increase in salaries”.
THE ANALYSIS OF THE EBA
The Authority's report is drawn up in compliance with Directive 2013/36/EU (CRD) and Directive (EU) 2019/2034 (IFD), which require the collection of information on the number of people working for banks and investment firms in the 'EU who have a salary equal to or greater than one million euros per financial year, and is inclusive of the area of activity involved and the main components of salary, bonuses and pension contributions. The analysis takes into consideration the employees of the 27 countries of the Union and those of the 3 countries of the European Economic Area (EEA), namely Iceland, Liechtenstein and Norway.
WHAT'S HAPPENING AROUND EUROPE
Observing what happens in the various states of the Old Continent, it can be seen that incomes between 1 and 2 million euros are found in 26 of the total 30. Over 1 million euros is brought home by 1,957 people, up 41.5% since 2020 (when they were 1,383) and the highest value since 2010 (when they were around 900), and 1,516 earn a figure between 1 and 2 million euros. However, the highest payment range is between 14 million and 15 million euros.
Going into detail on individual states, 70% of the increase in the number of incomes between 1 and 2 million comes from Germany (where they represent 30% of the total), France (19%) and Italy (18%) which respectively have 598 , 371 and 351 employees with this salary. In fourth place in this special ranking is Spain (221), closely followed by Norway (68), Sweden (66), Ireland (48), the Netherlands (46). In our country the increase compared to 2020 (when there were 187) is close to 88%, in France it reaches 63% and in Spain 73%.
On the other hand, as regards the sectors, in 2021 compared to 2020 there was an increase in high-income employees who work mainly in investment banking and asset management.
THE CONTRIBUTION OF INFLATION
According to reports from the EBA, inflation has contributed to an increase in the number of high-income earners, especially those in the 1-2 million euro range. In December 2021, the annual inflation rate within the EU was 5.3%, while a year earlier it was 0.3%. In parallel with inflation, labor costs for the fourth quarter of 2021 had grown by 2.3%.
THE VARIABLE REMUNERATION-FIXED REMUNERATION RATIO
The Banking Authority also provides other elements. For example the fact that the weighted average ratio of variable to fixed remuneration for all top earners increased from 86.4% in 2020 to 100.6% in 2021. Since variable remuneration is linked to the financial performance of the institution, this has led to the growth of some bonuses. According to the EBA, other relevant factors supporting this trend can be identified in the elimination of the restrictions due to Covid 19 and the continuation of the transfer of personnel due to Brexit. In 2021, underlines the European Banking Authority, the overall evolution of the ratio between variable remuneration and fixed remuneration is correlated to the development of GDP and the performance of the institutions to which they belong.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/relazione-eba-redditi-manager-banche/ on Sun, 26 Feb 2023 07:01:11 +0000.