21 July 2022
The European Banking Authority (EBA) published today its Report on benchmarking of remuneration practices in EU banks for the financial years 2019 and 2020 and high earners data (EU27/EEA) for 2020. The number of high earners went down from 1 444 (EU27/EEA) or 4 963 (EU28/EEA) in 2019 to 1 383 (EU27/EEA) in 2020. While the bonus level for high earners remained relatively stable, a visible reduction can be observed for risk takers (identified staff).
The weighted average ratio of variable to fixed remuneration for all high earners in the EU/EEA fell from 129% in 2019 to 86.4% in 2020. Such decrease is mainly due to the fact that 2020 figures do not include any longer data for high earners reported by UK institutions. For EU27/EEA a very slight increase of the weighted average ratio from 85.9% in 2019 to 86.4% in 2020 was observed, which was mainly caused by large severance payments.
Regarding all identified staff in the remuneration benchmarking sample for the EU27/EEA, the average ratio of variable to fixed remuneration for identified staff decreased to 49.7% in 2020 (2019, 53.7%). The ratio of variable to fixed remuneration for staff that is not identified staff has decreased in 2020 to 12.3% from 13.5% in 2019.
Overall, we could observe a small increase in the ratio of identified staff from 1.73% in 2018 to 1.84% in 2020. It appears that some banks in EU27/EEA have adjusted already their identification practices due to the changes in the Capital Requirements Directive (CRD) and revised Regulatory Technical Standards on identified staff for remuneration purposes.
The reduction in the number of high earners and bonuses of identified staff is mainly caused by the COVID-19 pandemic and is consistent with the recommendations of the EBA and competent authorities to apply more conservative remuneration policies during the pandemic.
Under Article 75 of the CRD, the 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 of the CRD, to publish aggregated data on the approval of higher ratios between the variable and the fixed part of remuneration by shareholders.
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. In addition, the EBA will start to benchmark the application of the derogations from the requirements to pay out a part of the variable remuneration in instruments and under deferral arrangements and the gender pay gap separately for credit institutions and investment firms.
Key figures have been visualised in a dynamic way. To facilitate the navigation, please find below the full list of key figures that you can find in the graphs:
Slide 1: Development of the number of high earners.
EU27 includes also data submitted by EEA member countries.
During the transitional period UK institutions continued reporting data on high earners at EU consolidation level, covering all subsidiaries and branches established in EU Member States. From Q1 2020 onwards, EU aggregated data no longer includes figures for UK banks, but they include data for subsidiaries of UK banks in EU Member States.
Slide 2: Number of high earners by Member State (EU and EEA) and by payment bracket (PB) of one million Euro (e.g. EUR 1 mn to EUR 2 mn), data for 2020.
Slide 3: Ratio of variable to fixed remuneration for high earners, by business area or function.
Slide 4: Ratio of variable to fixed remuneration for high earners by Member State (values shown in the graph refer to 2020).
Data on high earners were collected from all Member States at the highest consolidated level but excluded staff predominantly active in third countries. The data cover all staff of institutions and EU branches of third-country institutions receiving a total remuneration of EUR 1 million or more.