High pay in the financial sector

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.

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.

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.