Each year, the banks identify and communicate the salary data of their material risk takers (MRT). According to the FCA definition, these are staff “whose professional activities have a significant impact on the risk profile of the company or the assets that the company manages”. They tend to be leaders, dealmakers, or traders largely responsible for both risk and revenue generation.

Previously, eFinancialCareers reported on the salaries of material risk takers at bulge bracket banks in London. Now we have extracted data from the main banks operating in Europe and the table below shows the total, fixed and variable remuneration of these people. Where available, we have shown data specific to investment banking employees, although some firms do not disaggregate their MRTs. The “Scope” column shows where the numbers are for all MRTs or employees in the investment banking division.

* Key risk takers, as defined by UBS, include all employees whose total compensation exceeds USD/CHF 2.5 million. ** Since some MRTs do not receive variable compensation (i.e. board members), the number of employees used to calculate the average fixed and variable compensation will be different.

Looking at the data at a more granular level, we broke down the average cash-versus-equity variable compensation for MRTs and detailed the severance and signing bonuses employees received.

One of the most interesting pieces of information we found while browsing through the reports was Deutsche Bank’s deferred compensation schedule (see screenshot below). Employees appear to face a 13-year clawback and receive the first 10% of their bonus five years after grant. According to their compensation report, “Deutsche Bank continues to apply deferral structures that go beyond the regulatory minimum, resulting in an overall deferral rate (all employees, including non-MRT population) of 48 % in 2021. For the MRT population only, the carry-over rate is 92%. This makes their average total compensation of over $2 million in the investment banking division less attractive, especially given the state of inflation.

Source: Deutsche Bank

The other useful data point that emerges is the regulatory requirement to report employees earning more than €1 million per year. A clear divide is emerging between the bulge backet or international banks (UBS, Deutsche, Barclays, HSBC) and regional operators (UniCredit, Crédit Mutuel, Crédit Agricole, ABN Amro) where salaries of more than one million euros are much less common.

*Standard Chartered does not follow the standard reporting format above 5mn. They had 2 employees earning 5-5.5 million, 1 employee earning 8-8.5 million, 1 employee earning 8.5-9 million and one employee earning 10-10.5 million.

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