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High pay in the financial sector

The financial sector is known for its high pay excesses. Jane Turner looks at nearly 40 banks to see which are paying the people at the top excessive amounts.

In a time of rising bills and when many people are struggling with living costs, high executive pay, whilst never justifiable, now seems even more immoral.

The figures reflect total compensation for the highest paid director, which may be made up of a base salary, a bonus, variable pay (based on employee performance), and shares. The base salary and bonuses are usually the smallest amounts. For example, JP Morgan’s CEO had a base salary of $1.5 million, a bonus of $5 million, shares worth $25 million, and $52 million in option awards (option to buy shares in the future at a set price).

Companies awarding pay of £1 million or over lose a whole mark in the AntiSocial Finance category on our score tables in our ethical finance guides.

Two giant US banks that we have rated for the first time – JP Morgan and Goldman Sachs – pay their directors stratospheric amounts, way beyond excessive. Perhaps unsurprisingly, they also have the highest investments in dodgy, but lucrative, areas, namely nuclear weapons and cluster munitions, fossil fuels, deforestation, and animal cruelty.

Since 2021, those who pay £250,000 – £1 million lose a half mark on our score tables. Companies that fall into this category are mainly the building societies, although Nationwide and Skipton pay more.

Those that pay below £250,000 are not marked down in our ratings but details appear in the table below. Only five companies fell into this category: Revolut, Charity Bank, Principality, NS&I, and Ecology Building Society.

Pay of the highest paid directors at 39 banks and building societies

The table below shows how 39 banks and buildings societies perform for excessive pay at the top, ranked by top pay in 2022.

Bank Top pay 2022 Top pay 2019 Top pay 2016
JP Morgan Chase £74m - -
Goldman Sachs £30m - -
Barclays £5.2m £5.9m £4.2m
HSBC (First Direct) £4.9m £4.9m £5.6m
Banco Santander (Santander , Cater Allen) £4.6m £6.1m £5.3m
Lloyds (Bank of Scotland, Halifax, Scottish Widows, Birmingham Midshires) £4.6m £5.1m £5.5m
NatWest Group (Royal Bank of Scotland, Coutts, NatWest, Ulster) £4.3m £2m £3.5m
Paragon £3.1m £2.8m £1.9m
Virgin Money (including Clydesdale Bank, Yorkshire Bank) £2.7m £3.4m £2m
Tesco £2.6m £6.4m £4.2m
OneSavings Bank (Kent Reliance) £2.6m £1.6m £910K
Co-op Bank £2.3m £2.6m £4.5m
Nationwide Building Society £2.1m £1.3m £3.4m
Monzo £1.8m £117K -
Shawbrook £1.8m £715K £3.5m
Svenska Handelsbanken £1.5m £412K £384K
Metro Bank £1.4m £829K £1.3m
Danske Bank £1.4m £2.5m £1.7m
Skipton Building Society £1.3m £829k £921k
TSB Bank £1.1m £1.4m £3.7m
Bank of Ireland £960k £854K £843K
Yorkshire Building Society (Chelsea Building Society) £938k £971K £701K
Coventry Building Society £863k £861K £970K
Starling £780k - -
ICICI Bank £735k £720K £472K
Leeds Building Society £695k £659K £350K
West Bromwich Building Society £648k £659K £636K
Gatehouse £596k - -
Newcastle Building Society £589k £463k £314k
Post Office £415k - -
Cumberland Building Society £372k £358K £275K
Al Rayan £346k £656K £253K
Saffron Building Society £308k - -
Triodos £283k £312K £265K
NS&I £220k - -
Revolut £213k - -
Charity Bank £162k £151K £140K
Principality Building Society £130k £394K £535K
Ecology Building Society £129k £123K £96K

In this table, '-' means that the figure could not be found.

CEO pay ratios

All publicly listed firms with more than 250 UK employees now have to publish the ratio between the total remuneration of their CEOs and the full-time equivalent remuneration of their UK employees on the 25th, 50th (median) and 75th percentile.

CEO pay ratios for 2021 for the big four banks and some of our Best Buys
  Median Lower quartile (25th percentile)
Lloyds 225:1 316:1
HSBC 90:1 154:1
NatWest 87:1 130:1
Barclays 62:1 95:1
Coventry Building Society 24:1 32:1
Triodos 5.2:1 -
Ecology Building Society   6.72:1
Charity Bank   6:1


Bankers’ bonuses

One of Kwasi Kwarteng’s mini-budget policies still in place at the time of writing is the removal of the cap on bankers’ bonuses. The argument is that the government would get more tax from rich bankers by removing the cap. Since 2014, it had been set at twice an employee’s salary.

The TUC said its analysis found bonuses in the finance and insurance sector were now worth, on average, around £20,000 a year – their highest level on record.

But that’s an average. HSBC’s CEO was paid a $2.2 million bonus that was 129% of his base salary whilst JP Morgan’s CEO received a bonus of $5 million which was 333% of his base salary.

If you are looking to bank or invest more ethically, see our guides to ethical banking, ethical savings accounts, ethical investments, and ethical business banking

Our full list of financial guides can be found on our ethical money section.