High pay in the financial sector

Highest paid directors in banks, building societies and other finance organisations

The tables below shows the pay of the highest-paid director for the banks, building societies and other financial organisations like insurers and pension providers. In a time of rising bills and when many people are struggling with living costs, high executive pay seems even less easy to justify.

The figures reflect total compensation which may be made up of a base salary, a bonus, variable pay (based on employee performance), and shares.

Ethical Consumer considers any remuneration over £1m to be excessive, so companies awarding pay of £1m or over lose 10 points in our Company Ethos category on our score tables in our shopping guides. Over £10m and they lose 20 points. Those that pay below £1m are not marked down in this category.

Several giant companies  – Barclays, Columbia Threadneedle, Goldman Sachs, HSBC, Janus Henderson, JP Morgan, Legal & General, and Santander – 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, animal cruelty, and some of them involved in illegal Israeli settlements. Top pay goes hand in hand with base ethics.

Those with the highest salaries also seem to have massive bonuses. The recent removal of the cap on how big bonuses could be, which had been set at twice an employee’s salary, has also had an impact on total overall pay packet. 

And unfortunately, excessive pay at the top seems to go alongside massive disparity between the CEO's pay and the lowest salaries. For example, at HSBC, the pay ratio is 283:1. That means the CEO gets 283 times more salary than the lowest paid workers.

If a large company does not disclose its directors pay, they also lose 20 points. One of these is Vanguard. Vanguard isn’t a public company and has kept its executive pay under wraps since the 1990s. But it’s likely that its highest paid director is paid over £10m. By way of comparison, it nearest competitor Blackrock, paid its CEO £23.1m in 2024.

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 2024. It includes bonuses and other financial rewards. 

The combined pay (£80.6 million) of the top four highest-paid directors from just four banks – JP Morgan, Goldman Sachs, HSBC, and Barclays – is more than the combined pay of the highest-paid directors in all the other 35 banks in this table.

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

Ranked by top pay 2024, rounded up. The figures reflect total compensation which may be made up of a base salary, a bonus, variable pay (based on employee performance), and shares.

The biggest movers since our last survey are:

• Yorkshire Building Society – fourfold increase over two years.
• Starling Bank – top pay has nearly trebled.
• HSBC’s and Barclays’ CEO pay both more than doubled.

Banks with the least excessive payments

Those that pay below £1m were not marked down in this category in our shopping guides.

There were only four companies that pay less than £250,000: 

• Charity Bank
• Ecology Building Society
• NS&I
• Reliance Bank

High pay at pension providers, insurance companies and investment organisations

It's not just directors in banks who earn excessive amounts of money. Directors in finance organisations which provide pensions, insurance and investment funds are also paid incredible amounts of money.

The companies in the table below are in our guides to pensions, home insurance, car insurance and ethical investment funds.

These finance sectors have always paid their executives more because they are not restricted about what they make their money from. Or choose not to restrict themselves.

Profits for these types of companies are usually very high and high profits usually goes hand in hand with high pay for directors and executives. Executive pay, since the neoliberalism of the Thatcher and Reagan years of the 1980s, is now linked to a company’s financial performance. On top of basic salaries, executives are given performance-related bonuses and stock options allowing them to buy company shares for a set price.

Only seven companies in this table paid under £1m. Thhree of them – Shepherds Friendly, Scottish Friendly, OneFamily – were mutuals or friendly societies, like building societies. They redistribute profits to members and their ethos is less about making massive profits for their shareholders and more about social good.

Ranked by top pay 2024, rounded up. 

* = 2023 figures.

Some brands provide all types of financial services and can be found in the table above for banks and building societies (Barclays, JP Morgan Chase, Lloyds, and Nationwide). 

The return of bankers’ bonuses

Since 2014, a bonus cap had been set at twice an employee’s salary, in a move aimed at preventing excessive risk-taking after the 2008 financial crisis. That cap is still in force in the EU. But predictably, Liz Truss’ government abandoned the cap in October 2023 so that bankers could be paid unlimited bonuses.

The cap was introduced in the wake of the 2007-08 financial crisis in which banks received £1.162 trillion in financial support from the government. It was aimed at addressing the bonus culture criticised for sparking the financial crisis through prioritising short-term gains over long-term stability. EU regulators argued that limiting the performance element of bankers’ remuneration would reduce the incentive to make risky investment decisions.

In 2024, Barclays became the first UK bank to significantly extend the cap on bankers’ bonuses. The bank announced, in an internal memo to employees, that it had extended its bonus cap to enable staff to receive up to 10 times their salaries in bonuses, according to a report by the Guardian.

Surely the Labour Party would reinstate it when they got into power?

Not so. After previously criticising the removal of the cap, chancellor Rachel Reeves said she would not reinstate it. 

Reeves told the BBC in January 2024: “The cap on bankers’ bonuses was brought in in the aftermath of the global financial crisis and that was the right thing to do to rebuild the public finances. But that has gone now and we don’t have any intention of bringing that back. And as chancellor of the exchequer, I would want to be a champion of a successful and thriving financial services industry in the UK.”

On the other hand, companies like Ecology, Charity Bank, and Triodos don’t pay any bonuses or share options to their executive board. Triodos said:

“we do not consider financial incentives an appropriate way to motivate and reward co-workers in a values-based bank”.

Of course, banks and building societies have the option of maintaining the cap for themselves. That is what Leeds Building Society decided to do. 

But Barclays decided to change their cap from 2:1 to 10:1 and HSBC changed to 9:1. 

Goldman Sachs, which lobbied for the cap to be scrapped, has set its cap at 25 times an annual salary. 

In 2024, Barclay’s CEO had a base salary of £2.9m, and bonuses of £6.8m. The Lloyds Bank CEO was paid £1.2m in base salary but his bonuses amounted to £3.1m.

Barclays and NatWest cut climate goals from annual bonus schemes

Barclays and NatWest will cut climate goals from the annual bonus schemes of their senior executives, amid a wider trend for corporations to drop environmental and diversity-linked pay incentives.

According to a report in the Times, the banks will replace performance-related sustainability measures in annual executive awards with climate targets in share-based incentives schemes that remunerate in line with the rolling performance of the institution over three years.

They argue that these changes are more aligned with the longer timescales of climate targets. 

Climate performance comprised 10% of the bonus of NatWest chief executive last year. Under the proposed changes, sustainability metrics will account for 15% of the performance share plan. Barclays said that “progress towards these targets is expected to be volatile and non-linear and is best assessed over a multi-year period.”

CEO pay ratios

Since 2019, 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. The 25th percentile is the lowest-paid employees.

As with excessive pay for CEOs, the discrepancies between the unethical companies and the more ethical companies are vast, for example:

• HSBC pays its CEO 283 times as much as its lowest-paid employees
• Charity Bank pays its CEO 6.5 times as much as its lowest-paid employees

Below are the CEO pay ratios for 2023 or 2024 for their total remuneration for the big four banks in the UK and some of the more ethical banks and building societies. 

The CEO pay ratio data and accompanying narrative must be published in the company’s annual report, as part of the directors’ remuneration report.

Wealth gap widens

The prospect of higher remuneration for bankers comes as many people are still suffering from cuts in benefits and public services that were put in place following the banking crisis over 15 years ago.

In March 2024, the UK experienced its highest rise in absolute poverty in 30 years, sparked by rising energy prices.