At 13 million dollars on average were amounted the earnings of heads in 15 major banks in the U.S. and Europe, a rise of 10.1% compared with the previous year, thereby making up for last year’s reduction, says the newspaper Financial Times based on a survey of the U.S. group Equilar. U.S. banks offered to their heads much more generous packages compared to the European banks, highlighting the widening pay gap on both sides of the Atlantic.
The pay raise happened in a year when banks paid fines, a record in the U.S. for various offenses, against misleading selling mortgages to the violation of sanctions imposed by the U.S. The 15 banks paid last year 48 billion dollars in fines against 30 billion paid in 2012, according to an analysis of the Financial Times. However, increasing the salaries of bankers coincided with an average increase in profits of banks by 46% in 2013 and the strong performance of their shares, especially in the USA.
The increase in average earnings is mainly due to the big jump in pay for CEOs of U.S. banks, which jumped to a completely different class compared to their counterparts of the European banks. All six directors of U.S. banks, from Mr. Blankfein of Goldman Sachs to Mr. James Dimon of JP Morgan Chase, were among the seven best paid bankers. The remuneration package of Mr. Blankfein rose 50% to 19.9 million dollars, displacing the first place Mr. John Stampf of Wells Fargo. Even Mr. Dimon, who had lower earnings than other American bankers received a fee of 11.8 million dollars.
In Europe, a mix of regulatory and political pressure, lower income and a strategic shift from investment banking, led to the emergence of a new generation of bankers with less pay. Mr. Ross Mac Iwate, head of the British bank Royal Bank of Scotland since last Autumn, has a salary of 4 million dollars, which is the lowest among the 15 bankers and the fifth by Blankfein. Analysts expect that the gap will increase further as more banks refrain from investment banking that brings high earnings and as the EU ceiling in bonus forcing many banks to reduce the fees of senior staff. The Equilar analysts have included the remuneration of bankers basic salaries, cash bonuses and various other benefits. They have also included their salaries in shares awarded in 2013, some of which were given in return for the performance of the previous year.
By Nicole P.