The UK has the largest number of high earners in Europe at 2,714, according to research by the European Banking Authority (EBA).
Its High earners 2012 data report, which classified high-earners as individuals who are paid more than €1 million (£830,000) annually, has been published ahead of the implementation of bonus-capping requirements, which come into effect from January 2014, to show which European Union member states would be most impacted by the legislation.
After the UK, the European countries with the most high earners include Germany (212), France (177), Italy (109) and Spain (100).
Many countries, including Bulgaria, Iceland, Latvia and Slovenia, have no high earners.
Jon Terry, partner in the reward team at PricewaterhouseCoopers, said: “The data highlights how the UK is going to be disproportionately hit by the bonus cap.
“The UK has by far the highest number of high earners, with more than 2,000 people earning over €1 million. This is almost thirteen times higher than Germany, which has the second largest population of high earners with more than 200 people.
“Financial institutions in the majority of member states will need to make substantial changes to how they structure pay for their senior employees because more than half have people whose current pay structures exceed the maximum bonus cap.
“UK financial institutions, in particular, will need to review pay structures in light of the bonus cap because the current average ratio of variable pay to fixed pay is 370%.
“Identified staff make up only roughly half of total high earners in the UK, the lowest proportion of any member state. But based on this data alone, the number of people in the UK who will be subject to the bonus cap could more than double if the EBA’s proposals to expand the ‘material risk takers’ to all those with total compensation in excess of €500,000 is implemented.
“The EBA’s data leaves no doubt that the UK will feel the fullest force of the bonus-capping provisions compared with all other member states. Banks have a major challenge as to how they will reward their staff.
“Bringing more people into the stringent pay rules again further widens the gap between pay practices in Europe and the rest of the world.”
