Report 013
Compensation
Life Working Series 2014/5
1
1.
Introduction
Our annual review of City compensation trends during
2014 and the outlook for 2015.
This second report in our Life Working series for 2014/5, explores the evolving nature of pay
and bonuses on offer in the City.
The research for this year’s report was undertaken by online survey between 16th October and
3rd November 2014. Requests to participate in the survey were sent to 27,710 candidates and
clients of Astbury Marsden. A total of 1,468 responses were received and analysed to compile
the final report.
The information and data contained in this report are for information purposes only and
are not intended, nor implied to be a substitute for professional advice. In no event will
Astbury Marsden be liable to you or any third party for any decision made or action taken in
reliance of the results obtained through the use of the information and/or data contained or
provided herein. Please consider that the responses given are based on the respondents
interpretation of the question and response options.
If you have questions regarding the survey or the report please contact:
Adam Jackson
+44 (0)20 7065 1185
[email protected]
2
2. Summary of
findings
The most significant insights and trends identified in this
year’s research.
There has always been an ardent interest
in the pay and lifestyle of city workers,
whether that is the well documented ‘City
Boy’ lifestyle of old or the strictly regulated
bankers of today. With increasing
government pressure on compensation,
we look at how City workers attitudes
towards pay and bonuses have changed
this year.
Base Salary
At the salary level, we saw the average
base rise by 8% to £96,458 with median
basic pay 6% higher, at £85,000. This is
the first increase to median pay that we
have seen since 2011, suggesting that the
City is finally seeing the light at the end of
the tunnel.
However, whilst the City as a whole is
looking positive, the battle of equal pay
for women is still on. When looking at
the differences in men and women’s pay,
we found that on average, women’s basic
salary is just 84% of their male colleagues.
In addition, whereas last year, women
received a higher pay rise when changing
jobs or receiving a promotion, this year,
men are seeing their pay rise more quickly.
Bonus Expectations
Expectations of receiving a bonus are
slowly rising with two thirds anticipating
receiving a payment, a 5% increase on
last year. In addition, 40% are expecting
to see a rise; this is 6% more than last
year. However, we have also seen a small
increase in those who expect to see a
reduction in their bonus. With a decrease
in those who are ‘unsure’, this could
indicate a more realistic perspective as
compensation becomes more stabilised
following increased regulation and a
settling of the market.
Next Year
When looking at next year’s pay,
respondents are far more positive, with
5% more than last year expecting their pay
to go up. However when looking on a job
level basis, the report shows that the more
senior the respondent, the less confident
they are about receiving a pay rise. The
most confident are at the Associate/
Manager level with almost two thirds
expecting to receive a pay increase. By
stark contrast, just one third of Managing
Director/Partner level employees think
they will see their salary increase in 2015.
3
But what if expectations are not met?
How will employees react? This year,
over half of responses were to move roles
if they were not happy with their bonus.
This suggests that city workers are more
confident in the job market than they have
been in previous years.
Only time will tell.
I hope you find the report interesting.
Adam Jackson
Director
4
3. Basic Pay
Exploring changes to employee’s base salary over
the last year.
Fig 3.1
Overview
This year, the average salary across the City was £96,458, a further rise of 8% on 2013. Median basic
pay was £85,000, a 6% increase on last year.
During the year, 62% saw an increase in pay, a sharp increase on the last 3 years which saw less than
half experiencing a rise in their base salary. Just less than 3% received a decrease. This is in line with
previous years.
3.1.1
Recipients of pay changes
Changes to basic pay
2014
2013
2012
2011
Respondents receiving an increase
61.8%
47.0%
45.2%
44.0%
Respondents receiving an decrease
2.9%
3.1%
3.6%
1.2%
Increases in pay were made up of the following:
•
•
•
•
21% of respondents were promoted during the year. (Fig 3.1.2). Those promoted received just over
a 19% increase in basic pay, a rise on the prior year.
24% of city staff changed jobs (Fig 3.1.3), 4% less than last year. By changing employers you could
expect to receive a 17% increase to your pay. This represents a small rise on 2013.
Just over 6% of respondents changed jobs and received a promotion and in return received on
average 28% increase in pay.
61% of employees neither changed employers nor were promoted, these staff saw their basic pay
rise by 5%.
5
3.1.2
Changes to pay as a result of promotion
Average of 18.9% increase
for those who were promoted
Average of 6.5% increase
for those who were not
Average of 15.4% increase
for those who were promoted
Average of 5.5% increase
for those who were not
Average of 14.7% increase
for those who were promoted
Average of 5.4% increase
for those who were not
3.1.3
Changes to pay as a result of changing employers
Average of 16.5% increase
for those who changed jobs
Average of 6.6% increase
for those who did not
Average of 13.5% increase
for those who changed jobs
Average of 5.3% increase
for those who did not
Average of 11.5% increase
for those who changed jobs
Average of 5.1% increase
for those who did not
“The average salary
across the City in
2014 was £96,458”
6
Fig 3.2
Gender
3.2.1
Impact on pay of changes in circumstance
Men changing jobs or receiving promotions, saw their pay rise more quickly than women. This was also the case when they decided to
stay in their current role with the same employer.
Changed Jobs
2014
Promoted
2014
No Change
2014
Male
16.8%
20.1%
5.2%
Female
15.4%
14.1%
2.7%
Gender
3.2.2
Pay equality
According to the survey, women earn 84%
of the average basic salary for men.
This is a 6% increase on last year, however
there is still come way to go before women
and men’s earnings are equal.
Average
Median
Drilling into the results and looking at average pay differences based on job level we see the following:
Female
Male
Female salary as a
percentage of males
Analyst/Executive
£43,701
£58.905
74%
Associate/Manager
£60,355
£64,806
93%
Assistant Vice President
£66,688
£76,046
88%
Manager
£62,354
£76,504
82%
Vice President/Senior Manager
£93,001
£99,049
94%
Director/Executive Director
£137,471
£126,780
108%
Managing Director/Partner
£145,000
£213,421
68%
Other
£86,693
£93,765
92%
7
Fig 3.3
Job Level
3.3.1
Impact on pay of changes in circumstance
When changing jobs, AVP level staff expect to see the largest increases in basic pay. This contrasts significantly with the increases
experienced by the AVP’s who were promoted or did not change jobs; these individuals received the smallest increases of any level.
Promotions at the senior end were the most fruitful but those at the most junior end received the highest increases without a
promotion or a job change.
Impact on Pay
Job Level
Changed jobs
Promoted
No Change
2014
2013
2014
2013
2014
2013
Analyst/Executive
18.0%
17.7%
16.5%
23.7%
7.3%
8.5%
Associate/Manager
13.3%
19.3%
13.3%
18.1%
2.7%
5.6%
AVP
27.7%
16.6%
21.2%
14.5%
5.0%
3.6%
Manager
14.2%
14.4%
20.7%
17.1%
3.9%
3.6%
Vice President/Senior Manager
14.5%
12.2%
14.5%
12.2%
3.8%
2.0%
Director/Executive Director
17.9%
11.3%
25.1%
13.8%
3.7%
2.7%
Managing Director/Partner
19.1%
29.4%
26.1%
16.7%
5.9%
1.4%
Other
15.7%
14.0%
16.1%
15.1%
7.1%
3.0%
3.3.2
Shifts in median and average salaries
Median pay for Analyst/Executive level staff grew the fastest in the year with an increase of 11%. On an average basis, AVP level pay
was the quickest rising by 10%.
Average and median salaries increased across all job levels this year.
Job Level
Median Salary
Average Salary
2014
2013
Variance
2014
2013
Variance
Analyst/Executive
£50,000
£45,000
11.1%
£55,319
£52,017
6.3%
Associate/Manager
£60,000
£55,000
9.1%
£63,846
£61,007
4.7%
AVP
£70,000
£68,375
2.4%
£75,210
£68,139
10.4%
Manager
£72,000
£68,250
5.5%
£74,089
£69,120
7.2%
Vice President/Senior Manager
£95,000
£87,250
8.9%
£97,859
£91,545
6.9%
Director/Executive Director
£125,000
£120,000
4.2%
£128,167
£118,438
8.2%
Managing Director/Partner
£192,500
£175,000
10.0%
£208,289
£191,011
9.0%
Other
£80,000
£72,000
11.1%
£92,168
£84,004
9.7%
8
Fig 3.4
Function
3.4.1
Impact on pay of changes in circumstances
This year, staff working in Compliance experienced the largest increases in pay as a result of changing jobs or a promotion. This
demonstrates continued demand for the skillset over the last year.
Revenue Generators and Sales & Distribution staff received over 14% more pay without changing jobs or being promoted. This is a
positive change for Sales and Distribution staff who received a 1% decrease last year.
Impact on Pay
Function
Changed jobs
Promoted
No Change
2014
2013
2014
2013
2014
2013
Administration
18.1%
-
30.0%
-
5.9%
-
Compliance
36.9%
26.8%
32.2%
19.5%
3.7%
5.1%
Finance
11.2%
21.5%
10.8%
15.3%
2.8%
2.5%
HR
23.4%
22.4%
12.7%
18.7%
2.6%
14.7%
Internal Audit
20.8%
33.3%
n/a
22.2%
4.4%
3.7%
Operations &
Middle Office
19.9%
12.4%
24.4%
20.3%
4.1%
3.0%
Revenue
Generator
2.3%
11.0%
7.0%
14.0%
15.1%
3.1%
Risk & Governance
14.2%
15.2%
17.4%
13.6%
3.6%
8.0%
Sales & Distribution
13.8%
11.0%
14.8%
22.0%
14.1%
-1.0%
Strategy & Change
21.1%
19.3%
18.5%
22.5%
4.1%
4.4%
Technology
12.6%
13.4%
23.4%
15.6%
3.2%
3.4%
Other
19.7%
11.6%
28.1%
13.2%
4.4%
3.7%
9
3.4.2
Shifts in median and average salary
Internal Audit staff saw their median income rise the fastest at a rate of 16%. On an average basis, Revenue Generators and Strategy
and Change employees saw their pay rise the fastest.
In contrast Technology and Risk & Governance functions saw a decrease in their average salary this year.
Function
Median Salary
Average Salary
2014
2013
Variance
2014
2013
Variance
Administration
£58,000
£52,500
10.5%
£85,500
£75,125
13.8%
Compliance
£70,675
£67,750
4.3%
£87,292
£77,567
12.5%
Finance
£76,500
£73,500
4.1%
£80,753
£76,833
5.1%
HR
£69,200
£65,000
6.5%
£79,131
£75,185
5.2%
Internal Audit
£87,000
£75,000
16.0%
£58,500
£77,333
10.6%
Operations &
Middle Office
£65,000
£60,000
8.3%
£74,556
£68,809
8.4%
Revenue
Generator
£125,000
£110,000
13.6%
£124,509
£97,496
27.7%
Risk & Governance
£88,250
£82,000
7.6%
£96,630
£113,278
-14.7%
Sales & Distribution
£80,500
£71,250
13.0%
£94,545
£90,790
4.1%
Strategy & Change
£102,500
£94,500
8.5%
£122,539
£80,816
51.6%
Technology
£90,000
£83,000
8.4%
£94,027
£111,964
-16.0%
Other
£87,500
£85,000
2.9%
£106,198
£89,193
19.1%
10
Fig 3.5
Sector
3.5.1
Impact on pay and changes in circumstances
On a sector level there were some stark contrasts. The greatest impact on pay for those changing jobs in 2014 was experienced by
ratings agencies at 83%. However, those in private equity experienced a 7% decrease.
Those in corporate broking and stockbroking received a 43% increase in pay on promotion. However those in private banking &
wealth management experienced just a 7% increase. For those who remained loyal to their employer, without a promotion or a job
change, the highest increase in pay was in commodity trading. Corporate broking and stockbroking received no change.
Sector
Changed Jobs
Promoted
No Change
2014
2013
2014
2013
2014
2013
Commodity Trading
5.7%
18.5%
10.7%
25.7%
10.4%
1.4%
Consulting
13.2%
-
13.1%
-
4.5%
-
Corporate Broking &
Stockbroking
42.9%
0.9%
42.9%
17.0%
0.0%
0.0%
Exchanges & Trading
Platforms
25.6%
12.2%
34.1%
19.6%
3.6%
3.2%
Fund Services
15.9%
12.0%
8.6%
12.9%
4.7%
3.8%
Insurance
12.2%
19.0%
19.7%
15.9%
5.4%
5.1%
Investment Banking
22.3%
14.1%
22.6%
15.5%
6.2%
2.8%
Investment Management
8.6%
13.5%
12.0%
14.2%
4.9%
3.8%
Non Financial Services
18.6%
18.5%
31.7%
19.8%
1.5%
5.6%
Payments, Clearing,
Custody & Counterparty
10.8%
3.2%
21.7%
18.3%
1.8%
-1.7%
Private Banking & Wealth
Management
27.3%
17.8%
7.2%
13.5%
3.4%
3.7%
Private Equity
-6.9%
5.3%
10.9%
12.5%
5.6%
4.3%
Ratings Agencies
83.1%
9.6%
21.0%
11.9%
2.9%
0.5%
Regulators
15.2%
27.6%
-
8.7%
1.7%
3.3%
Retail Banks & Building
Societies
7.0%
14.4%
14.3%
11.2%
3.3%
14.3%
11
3.5.2
Shifts in median and average salaries
For the second year in a row, median pay for regulators grew the sharpest in the year rising by 17%, followed by private
banking & wealth management where pay rose by 12%. Ratings agencies saw average pay grow by 19% with the lowest growth
seen for exchanges and trading platforms.
Sector
Median Salary
Average Salary
2014
2013
Variance
2014
2013
Variance
Commodity Trading
£78,000
£75,000
4.0%
£94,947
£87,289
8.8%
Consulting
£98,500
£91,600
7.5%
£120,853
£111,189
8.7%
Corporate Broking &
Stockbroking
£60,000
£60,000
0.0%
£77,200
£73,600
4.9%
Exchanges & Trading
Platforms
£82,500
£80,000
3.1%
£91,518
£87,901
4.1%
Fund Services
£68,825
£65,500
5.1%
£74,346
£70,893
4.9%
Insurance
£76,500
£70,000
9.3%
£85,857
£80,312
6.9%
Investment Banking
£91,000
£83,000
9.6%
£99,534
£91,456
8.8%
Investment Management
£90,000
£85,000
5.9%
£92,129
£87,254
5.6%
Non Financial Services
£69,200
£65,000
6.5%
£82,954
£75,575
9.8%
Payments, Clearing,
Custody & Counterparty
£67,500
£65,000
3.8%
£81,660
£75,540
8.1%
Private Banking & Wealth
Management
£80,000
£71,300
12.2%
£90,685
£85,332
6.3%
Private Equity
£125,000
£125,000
0.0%
£126,625
£117,156
8.1%
Ratings Agencies
£86,750
£81,000
7.1%
£97,125
£81,400
19.3%
Regulators
£70,000
£60,000
16.7%
£71,327
£68,000
4.9%
Retail Banks & Building
Societies
£95,000
£90,000
5.6%
£97,933
£92,881
5.4%
12
4. Bonus
Expectations
A look at sentiment towards bonus payments for the
current year.
Fig 4.1
Overview
4.1.1
Overall bonus expectations
Overall bonus expectations
have increased this year
with 66% expecting a
bonus - a 5% increase on
last year.
4.1.2
Expectation of change in bonus
This year, 40% of
respondents are expecting
an increase in their bonus
compared to 34% last
year. However, 16% are
expecting a decrease, which
is 3% more than last year.
13
Fig 4.2
Gender
This year, the average expected bonus for men is almost double that which is expected by women.
However, the bonus as a percentage of average salary has increased for both sexes by just over 8%.
2014
Gender
2013
Average Bonus
% Average Salary
% Expecting a
bonus
Average Bonus
% Average Salary
Female
£17,429
26.3%
78.1%
£14,996
17.9%
Male
£32,080
40.0%
78.8%
£26,674
31.9%
Prefer not to say
£7,500
11.3%
66.7%
£9,000
10.8%
TOTAL
£29,437
37.9%
78.6%
£24,573
29.4%
Fig 4.3
Job Level
In line with last year, bonus expectations rose for all levels. Managing Director/Partner level staff expected
the highest bonus at an average of £124,680, 60% of average salary.
2014
Job level
2013
Average bonus
% Average
Salary
% Expecting a
bonus
Average
bonus
% Average
Salary
Analyst/Executive
£6,411
11.6%
71.3%
£4,008
7.7%
Associate/Manager
£10,298
16.1%
77.4%
£9,725
15.9%
AVP
£8,330
11.1%
76.6%
£6,468
9.5%
Manager
£21,239
32.3%
80.6%
£20,505
29.7%
Vice President/Senior Manager
£23,961
24.5%
89.2%
£20,405
22.3%
Director/Executive Director
£55,354
43.2%
82.8%
£43,135
36.4%
Managing Director/Partner
£124,680
59.9%
81.4%
£102,930
53.9%
Other
£5,440
5.9%
47.0%
£7,441
8.9%
TOTAL
£29,437
30.5%
78.6%
£24,573
27.5%
Looking at the comparatives based on gender and job level:
Female
Male
Percentage
Analyst/Executive
£2,721
£7,384
36.8%
Associate/Manager
£9,509
£10,505
90.5%
Assistant Vice President
£21,000
£6,697
313.9%
Manager
£7,542
£24,447
30.8%
Vice President/Senior Manager
£17,921
£25,452
70.4%
Director/Executive Director
£42,059
£57,319
73.4%
Managing Director/Partner
£120,000
£125,040
96.0%
Other
£2,867
£6,244
45.9%
TOTAL
£17,429
£32,080
54.3%
14
Fig 4.4
Function
Bonus expectations as a proportion of pay were fairly consistent across most functions when compared to last year.
The highest proportions were found with Revenue Generators who expect to receive 74% of their salary as bonus. Those in Compliance
have the lowest expectations at just 17%.
Over 90% of Risk and Governance and Internal Audit professionals expect to receive a bonus compared to just 71% of Operations and
Middle Office staff.
2014
2013
Function
Average
Bonus
% Average
Salary
% Expecting a
bonus
Average
Bonus
% Average
Salary
Administration
£22,375
26.2%
75.0%
£21,531
28.7%
Compliance
£14,674
16.8%
83.3%
£11,582
14.9%
Finance
£23,772
29.4%
83.6%
£19,774
25.7%
HR
£17,046
21.5%
80.8%
£13,446
17.9%
Internal Audit
£19,538
22.9%
92.3%
£18,488
23.9%
Operations & Middle Office
£15,609
20.9%
70.7%
£14,781
21.5%
Revenue Generator
£91,609
73.6%
81.0%
£81,683
72.1%
Risk & Governance
£24,079
24.9%
92.7%
£22,374
24.6%
Sales & Distribution
£38,116
40.3%
79.6%
£34,235
42.4%
Strategy & Change
£47,387
38.7%
86.2%
£27,018
24.1%
Technology
£18,098
19.2%
77.9%
£15,770
17.7%
Other
£45,455
42.8%
72.9%
£40,981
42.0%
TOTAL
£29,437
30.5%
78.6%
£24,573
27.5%
15
Fig 4.5
Sector
The highest bonus expectations were held by staff working in Private Equity at £145,625. The lowest expectations are with Regulators,
and Fund Services firms.
In addition, all Private Equity and Ratings Agency employees are expecting to receive a bonus compared to just 62% of Regulators.
2014
2013
Sector
Average
Bonus
% Average
Salary
% Expecting a
bonus
Average
Bonus
% Average
Salary
Commodity Trading
£30,547
32.2%
87.0%
£25,958
0.3%
Consulting
£27,822
23.0%
77.4%
£22,709
0.2%
Corporate Broking &
Stockbroking
£14,000
18.1%
83.3%
£8,500
11.5%
Exchanges & Trading
Platforms
£27,594
30.2%
81.8%
£20,078
22.8%
Fund Services
£7,184
9.7%
70.0%
£7,211
10.2%
Insurance
£14,486
16.9%
77.9%
£14,799
18.4%
Investment Banking
£27,301
27.4%
76.9%
£23,663
25.9%
Investment Management
£63,117
68.5%
81.2%
£61,704
70.7%
Non Financial Services
£36,151
43.6%
77.2%
£12,857
17.0%
Payments, Clearing,
Custody & Counterparty
£18,131
22.2%
79.2%
£16,371
21.7%
Private Banking & Wealth
Management
£24,167
26.6%
76.0%
£19,604
23.0%
Private Equity
£145,625
115.0%
100.0%
£117,125
100.0%
Ratings Agencies
£19,125
19.7%
100.0%
£18,500
22.7%
Regulators
£3,246
4.6%
61.5%
£4,731
7.0%
Retail Banks & Building
Societies
£20,533
21.0%
90.0%
£19,807
21.3%
TOTAL
£29,437
30.5%
78.6%
£24,573
27.5%
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5. Expectations
& Reactions
The sentiment of City staff towards pay prospects for
2013.
Fig 5.1
Overview
5.1.1
Expectation of salary increase
5.2.1
Expectation of salary increase
Half of respondents
this year, believe that
they will receive a pay
increase in 2015. This
is a small rise on last
year’s findings.
Fig 5.2
Gender
Both men and
women have similar
expectations towards
pay increases in 2015,
with women just slightly
more optimistic than
men.
17
Fig 5.3
Job Level
There is a stark contrast
between the different levels
in terms of expecting a
pay increase. Nearly three
quarters of Associate/
Manager staff expect a pay
rise in 2015, compared to
just one third of Managing
Director/Partner level
employees.
Fig 5.4
Function
Operations & Middle Office
and HR staff were the
least optimistic about pay
prospects for the coming
year. Compliance and
Strategy & Change staff are
the most optimistic.
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Fig 5.5
Sector
Payments, Clearing, Custody & Counterparty, Commodity Trading, Ratings Agencies and Non Financial Services are the most
optimistic sectors.
Corporate Broking & Stockbroking, Private Equity and Regulators expect continued pay pressure in the coming year.
19
Fig 5.6
Bonus Dissatisfaction
5.6.1 Action taken if dissatisfied with bonus payment
This year we have seen the biggest increase in those who would change roles as a result of a poor bonus to the highest levels since the
survey began.
Employees are more interested in moving overseas when compared to last year, but this has not returned to the levels experienced in
2011.
This year we have seen the highest level of employees who would take no action if they are not happy with their bonus. This suggests
that employees are becoming more accustomed to a lower bonus than they have done previously.
20
Market Insight
Where do you expect the most new financial services jobs to be
created in the next year?
1
London (45%)
2Singapore (14%)
3
Shanghai (12%)
4New York (9%)
5=
Hong Kong (8%)
UAE (8%)
7
Kuala
Lumpur (4%)
21
In which location would you prefer to work?
1
London (70%)
2New York (12%)
3
Singapore (7%)
4=
Hong Kong (4%)
UAE (4%)
6
Kuala
7
Lumpur (2%) Shanghai (1%)
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About Astbury
Marsden
We specialise in recruiting uniquely talented people in business technology, business
transformation, regulatory and assurance functions and specialist technical skills.
We intimately understand the dynamics of the financial services, energy and
professional services markets; making sure we know the people our clients need to
occupy critical roles throughout their business. We help clients determine the people
they need and then we find the best of them.
We have a global perspective and we are territory-neutral. We look for market
identifiers that we recognise, and apply our experience and intelligence to solve the
challenges they face. Our regional hubs established in London and Singapore allow
us to serve our clients across EMEA and throughout Asia.
You can find more out at www.astburymarsden.com
London
Singapore
Adam Jackson
60 New Broad St,
London
EC2M 1JJ
+44 (0)20 7065 1222
Mark O’Reilly
Singapore Land Tower,
50 Raffles Place,
Singapore 048623
+65 6829 7122
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