Finance sector sees salary increase, shows Mercer survey
Businesses in the finance sector cut staff bonuses but increased their salaries last year, according to a survey by consulting firm Mercer.
Banks, insurers and investment managers cut bonuses by around 5% whilst increasing salaries by more than 5%. The research follows recent news that fund managers are fighting to block bonus cap extension.
The report stated that ratio caps “are not affecting organisations’ compensation and benefits costs”, adding that if compensation and benefits costs are being affected, “they are only slightly lower or higher than pre-cap levels across all industries and regions.”
The survey found that base salaries in the finance sector are expected to rise by an average of 2-3% worldwide.
Mercer principal and co-author of the report Dirk Vink said that there is concern that placing more focus on fixed salaries “breaks the link between pay and performance” and could be “counter-productive for aligning pay with risk.”
The study also showed that banks are increasing 'role-based allowances', with over 50% having role-based allowances in place last year and 6% planning to introduce them.
“Very few organisations that implemented role-based allowances are now planning to eliminate them [4 per cent] across all regions and industries,” the report said.
The European Banking Authority also voiced concerns over role-based allowances in November last year, stating that they count as bonuses and should therefore be capped.