22 July 2020
The European Banking Authority (EBA) published today its Report on benchmarking of remuneration practices in EU banks for the financial years 2017 and 2018 and high earners data for 2018. The data shows that in 2018, the number of high earners in EU banks receiving a remuneration of more than EUR 1 million increased slightly by 1.58%, from 4 861 in 2017 to 4 938 in 2018. Over a longer period of time, the number of high earners increased significantly (+44.09%), from 3 427 in 2010 to 4 938 in 2018. The average ratio of variable to fixed remuneration for all high earners in the EU/EEA increased over time from 127% in 2014 to 139% in 2018. The observed remuneration levels of high earners reached up to EUR 39 million.
The number of identified staff decreased significantly from 53 382 in 2016 to 47 596 (–10.83%) in 2017 and 47 154 in 2018 (–0.93%). In 2018, overall only 1.73%, and in 2017 only 1.76%, of all staff in institutions were identified staff, which represents a material reduction compared to 2.00% in 2016.
After an increase from 57.09% in 2016 to 66.62% in 2017, the average ratio of variable to fixed remuneration decreased to 62.84% in 2018. The average remuneration for identified staff increased by 12.59% from 2016 to 2017 and by 0.28% from 2017 to 2018. The strong increase in 2017 goes hand in hand with the reduction of the number of identified staff in a few institutions that resulted in an overall more senior composition of identified staff.
The average effective ratio between the variable and fixed component for all identified staff increased strongly from 57.1% in 2016 to 66.62% in 2017 and decreased slightly in 2018 to 62.84% (2015: 62.2% and 2014: 65.5%). Overall, there was an increase in the number of institutions where shareholders had approved the use of ratios for the variable to fixed remuneration of above 100%.
As in previous years, the Report shows that remuneration practices within institutions were not sufficiently harmonised. In particular, the application of deferral and pay out in instruments differed significantly across Member States and institutions. This is mainly due to differences in the national implementation of Directive 2013/36/EU (Capital Requirements Directive – CRD) that in many cases allow for waivers of these provisions when certain criteria are met. Following the amendments of CRD, which will apply as of the end of 2020, a higher degree of harmonisation is expected.
Under Article 75 CRD, the European Banking Authority (EBA) is required to benchmark remuneration trends at Union level and to publish aggregated data on high earners earning more than one million euro per financial year. The EBA is also mandated, under Article 94 CRD, to publish aggregated data on the approval of higher ratios between the variable and the fixed part of remuneration by shareholders.
This Report includes an analysis of the 2018 data reported for high earners and an analysis of the 2017 and 2020 remuneration benchmarking data, with information on all identified staff as well as an overview of the number of institutions where shareholders approved higher ratios of the variable to fixed remuneration than 100%.
The EBA will continue to benchmark remuneration trends every two years and to publish data on high earners annually to closely monitor and evaluate developments in this area.