The number of bankers in the UK who earned more than one million euros ($1.3 million) each in remuneration in 2011, exceeded those in the rest of the European Union, according to an annual report published on Monday by the European Banking Authority, or EBA.
As many as 2,436 UK-based bankers earned more than a million euros, while the rest of the EU had 739 bankers earning more than a million euros. Germany, EU’s second-largest economy, had only 170 financiers who took more than a million euros home.
However, the number of bankers in the UK who earned this heady amount was lower than the previous year’s figure of 2,525, the Daily Telegraph reported.
The average pay of senior bankers in Britain was 1.44 million euros in 2011, but down from 2.3 million euros in 2010. And, if the earnings included total salary and bonus paid to top UK bankers, the annual number came to 3.51 billion euros, yet down significantly from 5.8 billion euros in 2010.
The EU agreed on a deal, in May, to cap the bonus for anyone earning more than 500,000 euros -- defined as a "risk-taker" -- at 100 percent of their salary, despite the UK’s campaign to water down the rule.
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Although the new EBA figures show why Britain opposed the bonus cap, BBC’s business editor Robert Peston said in a report that “probably more than half” of bankers in the UK “are not actually British,” adding: “The EBA gathered this data because it wanted to justify its limit on bonuses...but bankers tell me this limit is encouraging banks to push up the fixed salaries that bankers are receiving.”
Britain, which ran a lone campaign against the bonus cap, argued that it would push salaries up as banks would attempt to offset the cap, making it more difficult to cut bankers’ bonuses when their decisions go awry.
Britain’s argument was supported by the findings of a poll conducted, in May, by Towers Watson & Co (NYSE:TW), a consulting firm, that more than half of global banks planned to increase bankers’ pay, while only 7 percent said the bonus cap would result in reduced pay across the financial services industry.
The rules, which are expected to kick in next year, pose a threat to Britain’s financial industry, as some banks and their top bankers could move their financial centers outside the EU. The May poll also showed that New York would benefit the most from the rule, followed by Hong Kong, if financial services and key posts in the industry moved out of the EU.