Western investment banks dominate the list of highest average compensation per employee in 2012. But not all of those paid top salaries appear to be providing value for money.
Among the 50 largest banks in the world, Goldman Sachs is far out in front of the pack on pay, with average compensation of just less than $400,000 per full-time equivalent employee. In this instance, the money is matched by performance. Even after the bank’s expenditure on those high salaries, Goldman bankers generated the largest net profits per employee, at $346,000.
However, most of the other highly paid bankers struggled to deliver in 2012, with a number of the top 10 banks for average pay making a loss, or a very thin profit per employee. In fact, only one other bank aside from Goldman is in the top 10 for both pay and profits per employee: Scandinavian bank Nordea, which has a much higher proportion of plain vanilla banking business.
Instead, Australia and China dominate the list of most productive bankers, accounting for eight of the top 10 banks for profit per employee. In the case of Chinese banks, that result is achieved with relatively low pay per employee, and eight of the lowest 10 banks for average compensation are Chinese. The lowest paid employees of all are at Russia’s Sberbank, which has the third largest branch network in the world. The top four banks in the world for numbers of employees are all Chinese, so salary control is clearly pressing.
By contrast, Australian bankers are comparatively well paid, all residing among the top 20 banks for compensation per employee. Given the significance of staff costs as an expenditure item, the net profits generated in Australia per employee are impressive.
Overall, bankers in the Asia-Pacific region are by far the most profitable, at more than $110,000 per employee on average. This is followed at some distance by Latin America on $79,000 and North America on $76,000. Given the poor performance of many large western European banks last year, it is no surprise that these are the least profitable bankers, on just $29,000 per employee. But they still enjoy the second highest salaries after North America, at an average of $102,000 per employee.
