Large increases in base salary among executives and employees in the financial services sector have failed to materialise, according to research by Mercer.
Its Global financial services executive compensation snapshot survey found that projected base salary increases for 2015 remain modest, running on average between 2.3% to 3.2%.
According to the survey, most organisations expect average employee pay in 2015 to be similar to 2014 levels although expectations in Europe and emerging markets are more positive.
It is expected salary increases in emerging markets will rise to 8%, while in Europe they will rise between 1.2% and 2%.
In North America pay increases are expected to be between 2% and 3%.
In addition, the research found that 60% of organisations predict 2015 annual incentive levels to be similar to 2014, although one-fifth (20%) expect levels to increase on last year.
Two-thirds (66%) of financial service firms are also not planning to change their target annual incentive levels for 2015.
But a quarter (25%) of banks surveyed plan to increase the weight of non-financial metrics in their annual incentive plans.
The survey looked at projected salary increases and predicted bonus pool movements, as well as changes in annual, deferred and long-term incentives, pay mix and role-based allowances.
Vicki Elliott, senior partner at Mercer, said: “The weighting of base pay compared to other forms of pay within financial services has increased. However, the magnitude of base pay increases planned is less than expected.
“Based on the findings from Mercer’s survey, it seems 2015 will be a year for stabilising compensation programmes after several years of changes in large part due to regulatory requirements since the financial crisis.”
Dirk Vink, senior compensation consultant and survey manager at Mercer, added: “Increasing numbers of banks are measuring customer satisfaction, employee engagement, quality of risk management and other performance areas that are not financial.
“These measures emphasise specific actions needed to achieve strategic objectives, which, ultimately, should improve profitability.”
