More European bankers earning €1M+ than ever before – EBA

The number of European bankers earning more than €1 million reached the highest level on record in 2021, according to the latest figures from the European Banking Authority.

Those receiving remuneration of €1 million or more per financial year — referred to as "high earners" — rose 41.5% year over year to 1,957 in 2021, the EBA said in a Jan. 19 report. This is the highest level since the regulator began collecting the data for the EU and European Economic Area in 2010. There were 1,383 high earners recorded in 2020.

The increase was attributed to the strong performance in the sector that year, particularly in investment banking, and trading and sales. The relocation of staff from the U.K. to the EU and a general increase in salaries also contributed, the EBA said.

Italy had the largest annual rise in high earners, up 88% to 351 individuals. The next biggest increases were in Spain and France at 73% and 63%, respectively. Germany was home to 30% of all high earners, the largest proportion by country.

Investment banking roles accounted for the highest number of top earners, at 749 individuals. There were 87 new €1 million-plus earners at investment banks in 2021, the biggest increase by segment, followed by asset management executives, with 29 new high earners.

Variable compensation played a much larger role in overall remuneration in 2021, equating to 100.6% of fixed pay on a weighted average basis, compared to 86.4% in 2020. This may have been partially due to the expiry of COVID-19 restrictions on bonuses, the EBA said.

The regulator also noted a positive correlation between the increase in variable compensation and an overall rise in return on equity among European banks.

Whether the trend of higher remuneration continued into 2022 is uncertain. Institutions have embarked on widespread job cuts in recent months following a dismal year for investment banks.

With recessions anticipated in many regions and the interest rate environment still unclear, investment bankers have warned that activity may not recover materially until the second half of 2023.