Top firm analyst comp - What’s the pay gap ?

Mind The Gap

Emolument.com has analysed salaries and bonuses from 1,211 Front office Analysts Year 1-3 (junior bankers) working in Europe and the USA.

CEO/ Analyst income (salary + bonuses)

Analysts should aim for a bank where the CEO has the highest income : the 3 banks with the best paid CEOs (Goldman Sachs, Morgan Stanley, JP Morgan) are the ones paying their analyst the most (up to $111,000 a year for Bank of America Merrill Lynch).

But high starting packages also equal highest Analyst/CEO gaps! Looking at absolute figures rather than Analyst/CEO pay ratios tells 2 different stories: while top banks pay their analyst the most in absolute terms, that is also where the pay gap is by far the highest (up to 1/218 for Goldman Sachs).

And banks with low analyst pay are actually the fairest ones: While offering below average salaries and bonuses to its analysts ($81,000 a year), Santander is by far the fairest bank, as its CEO pay ($5.4m) is also proportionally low compared to other CEOs’.

The Deutsche Bank exception: Deutsche bank is the bank where the pay gap is the lowest, as it has a below average CEO remuneration ($7m) and the highest analyst compensation ($114,000). It is however linked to the fact that they had 2 CEOs until recently (hence the total compensation allowed to executive income is actually twice of the one displayed).

CEO Analyists Income

Alice Leguay from Emolument.com said : 'Pay at top banks is elastic for CEOs: when raising CEO pay, analyst packages can stay where they are, as those banks already pay top dollar in the junior market. On the other hand, if Santander were to match Goldman's analysts/CEO pay ratio, it would bring analyst pay down to $25,000, which would definitely exclude it from attracting talent. Banks like Santander are stuck with narrower analyst/CEO pay gaps, and not necessarily out of choice'.

Source: Emolument, the salary benchmarking site.

 

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