Goldman Sachs is far more likely to pay you $5.5m than Barclays or Deutsche Bank
Barclays is cutting £188m from compensation costs in its corporate and investment bank, but compared to other European banks it doesn't pay badly. However, US investment banks - and Goldman Sachs, in particular - are far more likely to pay very large sums.
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As we've reported here and here in recent weeks, both US investment banks in Europe and European banks (by definition in Europe) are bound to make compensation disclosures under the European Union's CRD IV directive. For American banks, these disclosures are only for their European subsidiaries; for European banks, the disclosures are global.
As part of the directive, the banks concerned must reveal how many people earn more than €1m. You can see this in the chart below.
Bearing in mind that the figures for US banks like Goldman and Citi are only for London-based subsidiaries, and that the numbers for banks like Barclays, Deutsche Bank, and HSBC are for global operations, it's clear that US banks are far, far more generous at the top end.
At the top of the pyramid, American banks, and Goldman especially, reign supreme. Despite having fewer material risk takers (MRTs), defined as employees who could have a "material impact" on the risk profile of a bank (and automatically including all earners over a £660k threshold) overall, Goldman had more people in its ranks earning over €5m in London alone than Barclays or Deutsche Bank globally.
30 people at Goldman Sachs in London earned over €5m in 2023. At Barclays and Deutsche Bank 26 and 24 people globally earned over €5m respectively last year.
Barclay's high number of people earning €5m is matched by its high average pay for all MRTs. The average Barclays MRT earned $1.78m in 2023, more than at any other bank we looked at, European or American. Goldman's MRTs earned $1.58m on average each in London, while Deutsche's earned $1.52m each globally.
Needless to say, however, hardly anyone earns these sums. Barclays had 849 MRTs globally; only 26 of them earned over 5m, or just 3.1%. Goldman had 507 in Europe, and only 30 of them earned over €5m, or just 6%.
MRTs are only a small proportion of total staff. Of Goldman's 3,300 UK-registered employees, just 15% were MRTs, and just 0.9% of total staff earned over €5m. At Barclays globally, just 0.9% of the 92k staff were MRTs last year and 0.028% earned over €5m. At Deutsche Bank, the figures were just 0.7% and 0.026%, respectively.
Why is Barclays so generous? It probably helps that it still has a generous quotient of people hired from Lehman in 2008, even if some have been leaving for UBS. Whether Barclays will remain as generous in 2024 is open to question - the bank is still cutting costs and is due to report its second quarter results on the first of August. Barclays staff who are worried about getting paid huge sums still have time to move to Goldman Sachs, but they might not want to choose a European rival.
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