Banking still pays top dollar in the City

Working for an investment bank is the best way to be paid top dollar in the finance sector according to new research.

Salary benchmarking site Emolument.com which analysed 1,157 London directors’ salaries to pinpoint the top paying jobs said investment bank employees were paid 30% more than those at buy-side institutions such as asset management and hedge funds.

It found that an average director in the world of investment banking earns £160,000 with a £100,000 bonus with a director at a ratings agency pocketing a £110,000 salary and a £22,000 bonus.

According to Emolument bonuses make up almost 50% of the total remuneration package in key revenue-generating positions in investment banking, hedge funds and asset management firms. In performance-oriented jobs bonuses are used to incentivise employees. Where either the function is far removed from revenue generation or where the company’s output does not directly impact revenue bonuses only constitute around 18% of annual earnings.

M&A bankers earn 16% more than traders, but their lifestyles are vastly different. M&A projects tend to last weeks or months with 24/7 working hours, whilst in trading, decisions are made in an instant, with the working day over as soon as markets close.

Alice Leguay, co-founder and COO at Emolument.com said: ‘While remuneration in banking, is not what it used to be, it remains the highest paying sector. Senior bankers who have been accustomed to a plush standard of living through a career of earning sky-high bonuses are often trapped in the industry, both burning through their revenue to cover household costs, and not making the fortunes they were aiming for 10 years ago. The levelling of earnings between banking and buy-side activities for juniors allows them a broader scope when it comes to picking a career path, less defined by the hope of making a push towards the banking bonanza, but rather the added value a job in Private Equity, Venture Capital or other key roles in the industry may bring.’