The disparity of contentious bonus-cap rules across the EU has been underscored by fresh official statistics that show a UK-based asset manager earned a €34m bonus compared with a base salary of €199,000.
The anonymous individual was among 4,133 high earners in the UK who took home more than €1m, according to annual statistics published on Thursday by the European Banking Authority. Comparing 2015 figures to 2014, they are the first statistics to be published by the EBA since the bonus cap took effect in 2014.
The cap limits bankers’ bonuses to 100 per cent of fixed pay, or 200 per cent with special shareholder approval. But the UK was among member states that declined to extend the bonus cap to asset managers and other smaller institutions beyond banking.
The number of high earners soared in 2015, jumping 33 per cent on 2014, to 5,142 across the EU. The EBA attributed this increase to the weak euro against the pound at the time. Sterling’s strength against the euro has since evaporated after the UK’s Brexit referendum last June.
The average ratio of bonuses to fixed income rose, despite the ban, from 127 per cent to 147 per cent, according to the EBA.
However, it was largely the asset-management sector that skewed the statistics: its ratio of bonus to fixed pay was as high as 468 per cent, the EBA said.
The UK was a staunch critic of the cap generally, launching a legal challenge before eventually abandoning it. The UK believes that the cap distorts fixed pay, and makes it harder for regulators to insist on meaningful clawback of compensation if there is misconduct.
The UK’s highest-earning asset manager still had to defer nearly half of their bonus, the EBA’s statistics show.
Even in banking, where the bonus cap applies, the UK was still home to the best-paid employees.
One UK investment banker was paid an €8m bonus on top of his or her €11m salary, while a manager of a UK-based institution was paid variable pay of just under €14m in addition to €12m salary, the data show.