06 December 2006
Christmas cheer in the City
As news of exorbitant City salaries and Christmas bonuses fill the newspapers Labour Research has looked at company reports to find out how much some City workers can earn.
Labour Research has trawled the company accounts of City firms to see just how much City workers can earn and found that not only do large numbers of City directors take home in excess of ?1 million a year but many employees bring home six figure sums.
Many City firms have to disclose a total pay bill for directors and the pay of the highest paid director, but this individual does not have to be named. Based on this criteria Labour Research has looked into the salaries awarded at some of the top City firms and has come up with some staggering figures: it found 44 directors had ?1 million plus pay packets (see table below) - and this is by no means an exhaustive list. According to the Labour Research's snapshot survey, Silchester International Investors has the highest paid director - chairman Seven Butt - on ?12.88 million a year.
The annual reports also have to give the total pay bill for employees and the average number that worked for the firm over the financial year - this makes it possible to calculate an average pay figure. Labour Research's search again revealed some impressive sums.
Fund manager Park Place only has eight employees but they earned on average ?526,750 in 2005. The 55 employees at fund manager Lansdowne Partners were on average earnings of ?433,330 in 2005.
The HSBC bank revealed that five employees received a total of ?35.2 million in 2005, down slightly on the 2004 figure of ?35.9 million. The bank does not reveal exact figures, but one employee earned up to ?10.3 million, another up to ?8.1 million, a third up to ?6.9 million, followed by two on up to ?5.2 million and ?5 million respectively.
Most companies do not reveal details of bonuses handed out during the year in the annual reports as there is no obligation to do so - but two do. In the year to March 2006 the merchant bank NM Rothschild paid out ?153.4 million on annual and long-term profit share to directors and employees - almost 85% more than the 2005 figure of ?83.5 million - this made the bonus pay-out two and a half times the basic salary bill of ?58.4 million. And financial services group Numis Securities said incentive payments to employees totalled ?10.6 million in the year to September 2005 against ?6.5 million the year before - a rise of almost two-thirds.
Neal Moister, who carried out the research for the Labour Research article, said:
“These figures show just how big the pay gap is between City workers and the rest of the country. Not only are there individuals earning exorbitant sums but they are also have them topped up by equally extravagant bonuses.
“This money is often spent on property and is a prime contributor to the high cost of housing in this country, particularly in London and the South East, and this can have negative repercussions for everyone else.”
44 City directors on ?1 million or more
2 13 months? pay
3 15 months? pay
The full article will appear in the December edition of Labour Research and also comes attached with this press release.
Labour Research is published by the Labour Research Department, an independent trade union and labour movement organisation founded over 90 years ago. More than 1,800 trade union organisations, including 55 national unions representing 99% of total TUC membership, are affiliated.
Labour Research Department press releases are also available on the LRD website at http://www.lrd.org.uk
For further information contact Neal Moister on 020 7902 9224.
Download: City Bonuses 2006 (pdf file, 125 KB)