Report13_Compensation_EMAIL

1

Report 013CompensationLife Working Series 2014/5

2

1. IntroductionOur annual review of City compensation trends during 2014 and the outlook for 2015.

This second report in our Life Working series for 2014/5, explores the evolving nature of pay and bonuses on offer in the City.

The research for this year’s report was undertaken by online survey between 16th October and 3rd November 2014. Requests to participate in the survey were sent to 27,710 candidates and clients of Astbury Marsden. A total of 1,468 responses were received and analysed to compile the final report. The information and data contained in this report are for information purposes only and are not intended, nor implied to be a substitute for professional advice. In no event will Astbury Marsden be liable to you or any third party for any decision made or action taken in reliance of the results obtained through the use of the information and/or data contained or provided herein. Please consider that the responses given are based on the respondents interpretation of the question and response options. If you have questions regarding the survey or the report please contact: Adam Jackson+44 (0)20 7065 [email protected]

3

2 . Summary of findingsThe most significant insights and trends identified in this year’s research.

There has always been an ardent interest in the pay and lifestyle of city workers, whether that is the well documented ‘City Boy’ lifestyle of old or the strictly regulated bankers of today. With increasing government pressure on compensation, we look at how City workers attitudes towards pay and bonuses have changed this year.

Base Salary

At the salary level, we saw the average base rise by 8% to £96,458 with median basic pay 6% higher, at £85,000. This is the first increase to median pay that we have seen since 2011, suggesting that the City is finally seeing the light at the end of the tunnel.

However, whilst the City as a whole is looking positive, the battle of equal pay for women is still on. When looking at the differences in men and women’s pay, we found that on average, women’s basic salary is just 84% of their male colleagues.

In addition, whereas last year, women received a higher pay rise when changing jobs or receiving a promotion, this year, men are seeing their pay rise more quickly.

Bonus Expectations

Expectations of receiving a bonus are slowly rising with two thirds anticipating receiving a payment, a 5% increase on last year. In addition, 40% are expecting to see a rise; this is 6% more than last year. However, we have also seen a small increase in those who expect to see a reduction in their bonus. With a decrease in those who are ‘unsure’, this could indicate a more realistic perspective as compensation becomes more stabilised following increased regulation and a settling of the market.

Next Year

When looking at next year’s pay, respondents are far more positive, with 5% more than last year expecting their pay to go up. However when looking on a job level basis, the report shows that the more senior the respondent, the less confident they are about receiving a pay rise. The most confident are at the Associate/Manager level with almost two thirds expecting to receive a pay increase. By stark contrast, just one third of Managing Director/Partner level employees think they will see their salary increase in 2015.

4

But what if expectations are not met? How will employees react? This year, over half of responses were to move roles if they were not happy with their bonus. This suggests that city workers are more confident in the job market than they have been in previous years.

Only time will tell.

I hope you find the report interesting.

Adam JacksonDirector

5

3 . Basic Pay

This year, the average salary across the City was £96,458, a further rise of 8% on 2013. Median basic pay was £85,000, a 6% increase on last year.

During the year, 62% saw an increase in pay, a sharp increase on the last 3 years which saw less than half experiencing a rise in their base salary. Just less than 3% received a decrease. This is in line with previous years.

Exploring changes to employee’s base salary over the last year.

OverviewFig 3.1

Changes to basic pay 2014 2013 2012 2011

Respondents receiving an increase 61.8% 47.0% 45.2% 44.0%

Respondents receiving an decrease 2.9% 3.1% 3.6% 1.2%

3.1.1 Recipients of pay changes

Increases in pay were made up of the following:

• 21% of respondents were promoted during the year. (Fig 3.1.2). Those promoted received just over a 19% increase in basic pay, a rise on the prior year.

• 24% of city staff changed jobs (Fig 3.1.3), 4% less than last year. By changing employers you could expect to receive a 17% increase to your pay. This represents a small rise on 2013.

• Just over 6% of respondents changed jobs and received a promotion and in return received on average 28% increase in pay.

• 61% of employees neither changed employers nor were promoted, these staff saw their basic pay rise by 5%.

6

3.1.2 Changes to pay as a result of promotion

3.1.3 Changes to pay as a result of changing employers

Average of 15.4% increase for those who were promoted

Average of 5.5% increase for those who were not


Average of 13.5% increase for those who changed jobs



Average of 5.3% increase for those who did not


“The average salary across the City in 2014 was £96,458”





7

Drilling into the results and looking at average pay differences based on job level we see the following:

Female MaleFemale salary as a

percentage of males

Analyst/Executive £43,701 £58.905 74%

Associate/Manager £60,355 £64,806 93%

Assistant Vice President £66,688 £76,046 88%

Manager £62,354 £76,504 82%

Vice President/Senior Manager £93,001 £99,049 94%

Director/Executive Director £137,471 £126,780 108%

Managing Director/Partner £145,000 £213,421 68%

Other £86,693 £93,765 92%

GenderFig 3.2

3.2.1 Impact on pay of changes in circumstance

Men changing jobs or receiving promotions, saw their pay rise more quickly than women. This was also the case when they decided to stay in their current role with the same employer.

GenderChanged Jobs

2014Promoted

2014No Change

2014

Male 16.8% 20.1% 5.2%

Female 15.4% 14.1% 2.7%

3.2.2 Pay equality

According to the survey, women earn 84% of the average basic salary for men.

This is a 6% increase on last year, however there is still come way to go before women and men’s earnings are equal.

Average Median

8

Job LevelFig 3.3

Job Level

Impact on Pay

Changed jobs Promoted No Change

2014 2013 2014 2013 2014 2013

Analyst/Executive 18.0% 17.7% 16.5% 23.7% 7.3% 8.5%

Associate/Manager 13.3% 19.3% 13.3% 18.1% 2.7% 5.6%

AVP 27.7% 16.6% 21.2% 14.5% 5.0% 3.6%

Manager 14.2% 14.4% 20.7% 17.1% 3.9% 3.6%

Vice President/Senior Manager 14.5% 12.2% 14.5% 12.2% 3.8% 2.0%

Director/Executive Director 17.9% 11.3% 25.1% 13.8% 3.7% 2.7%

Managing Director/Partner 19.1% 29.4% 26.1% 16.7% 5.9% 1.4%

Other 15.7% 14.0% 16.1% 15.1% 7.1% 3.0%

3.3.1 Impact on pay of changes in circumstance

When changing jobs, AVP level staff expect to see the largest increases in basic pay. This contrasts significantly with the increases experienced by the AVP’s who were promoted or did not change jobs; these individuals received the smallest increases of any level.

Promotions at the senior end were the most fruitful but those at the most junior end received the highest increases without a promotion or a job change.

Job LevelMedian Salary Average Salary

2014 2013 Variance 2014 2013 Variance

Analyst/Executive £50,000 £45,000 11.1% £55,319 £52,017 6.3%

Associate/Manager £60,000 £55,000 9.1% £63,846 £61,007 4.7%

AVP £70,000 £68,375 2.4% £75,210 £68,139 10.4%

Manager £72,000 £68,250 5.5% £74,089 £69,120 7.2%

Vice President/Senior Manager £95,000 £87,250 8.9% £97,859 £91,545 6.9%

Director/Executive Director £125,000 £120,000 4.2% £128,167 £118,438 8.2%

Managing Director/Partner £192,500 £175,000 10.0% £208,289 £191,011 9.0%

Other £80,000 £72,000 11.1% £92,168 £84,004 9.7%

3.3.2 Shifts in median and average salaries

Median pay for Analyst/Executive level staff grew the fastest in the year with an increase of 11%. On an average basis, AVP level pay was the quickest rising by 10%.

Average and median salaries increased across all job levels this year.

9

FunctionFig 3.4

3.4.1 Impact on pay of changes in circumstances

This year, staff working in Compliance experienced the largest increases in pay as a result of changing jobs or a promotion. This demonstrates continued demand for the skillset over the last year.

Revenue Generators and Sales & Distribution staff received over 14% more pay without changing jobs or being promoted. This is a positive change for Sales and Distribution staff who received a 1% decrease last year.

Function

Impact on Pay

Changed jobs Promoted No Change

2014 2013 2014 2013 2014 2013

Administration 18.1% - 30.0% - 5.9% -

Compliance 36.9% 26.8% 32.2% 19.5% 3.7% 5.1%

Finance 11.2% 21.5% 10.8% 15.3% 2.8% 2.5%

HR 23.4% 22.4% 12.7% 18.7% 2.6% 14.7%

Internal Audit 20.8% 33.3% n/a 22.2% 4.4% 3.7%

Operations & Middle Office

19.9% 12.4% 24.4% 20.3% 4.1% 3.0%

Revenue Generator

2.3% 11.0% 7.0% 14.0% 15.1% 3.1%

Risk & Governance 14.2% 15.2% 17.4% 13.6% 3.6% 8.0%

Sales & Distribution 13.8% 11.0% 14.8% 22.0% 14.1% -1.0%

Strategy & Change 21.1% 19.3% 18.5% 22.5% 4.1% 4.4%

Technology 12.6% 13.4% 23.4% 15.6% 3.2% 3.4%

Other 19.7% 11.6% 28.1% 13.2% 4.4% 3.7%

10

FunctionMedian Salary Average Salary


Administration £58,000 £52,500 10.5% £85,500 £75,125 13.8%

Compliance £70,675 £67,750 4.3% £87,292 £77,567 12.5%

Finance £76,500 £73,500 4.1% £80,753 £76,833 5.1%

HR £69,200 £65,000 6.5% £79,131 £75,185 5.2%

Internal Audit £87,000 £75,000 16.0% £58,500 £77,333 10.6%

Operations & Middle Office

£65,000 £60,000 8.3% £74,556 £68,809 8.4%

Revenue Generator

£125,000 £110,000 13.6% £124,509 £97,496 27.7%

Risk & Governance £88,250 £82,000 7.6% £96,630 £113,278 -14.7%

Sales & Distribution £80,500 £71,250 13.0% £94,545 £90,790 4.1%

Strategy & Change £102,500 £94,500 8.5% £122,539 £80,816 51.6%

Technology £90,000 £83,000 8.4% £94,027 £111,964 -16.0%

Other £87,500 £85,000 2.9% £106,198 £89,193 19.1%

3.4.2 Shifts in median and average salary

Internal Audit staff saw their median income rise the fastest at a rate of 16%. On an average basis, Revenue Generators and Strategy and Change employees saw their pay rise the fastest.

In contrast Technology and Risk & Governance functions saw a decrease in their average salary this year.

11

SectorFig 3.5

3.5.1 Impact on pay and changes in circumstances

On a sector level there were some stark contrasts. The greatest impact on pay for those changing jobs in 2014 was experienced by ratings agencies at 83%. However, those in private equity experienced a 7% decrease.

Those in corporate broking and stockbroking received a 43% increase in pay on promotion. However those in private banking & wealth management experienced just a 7% increase. For those who remained loyal to their employer, without a promotion or a job change, the highest increase in pay was in commodity trading. Corporate broking and stockbroking received no change.

SectorChanged Jobs Promoted No Change

2014 2013 2014 2013 2014 2013

Commodity Trading 5.7% 18.5% 10.7% 25.7% 10.4% 1.4%

Consulting 13.2% - 13.1% - 4.5% -

Corporate Broking &Stockbroking

42.9% 0.9% 42.9% 17.0% 0.0% 0.0%

Exchanges & Trading Platforms

25.6% 12.2% 34.1% 19.6% 3.6% 3.2%

Fund Services 15.9% 12.0% 8.6% 12.9% 4.7% 3.8%

Insurance 12.2% 19.0% 19.7% 15.9% 5.4% 5.1%

Investment Banking 22.3% 14.1% 22.6% 15.5% 6.2% 2.8%

Investment Management 8.6% 13.5% 12.0% 14.2% 4.9% 3.8%

Non Financial Services 18.6% 18.5% 31.7% 19.8% 1.5% 5.6%

Payments, Clearing, Custody & Counterparty

10.8% 3.2% 21.7% 18.3% 1.8% -1.7%

Private Banking & Wealth Management

27.3% 17.8% 7.2% 13.5% 3.4% 3.7%

Private Equity -6.9% 5.3% 10.9% 12.5% 5.6% 4.3%

Ratings Agencies 83.1% 9.6% 21.0% 11.9% 2.9% 0.5%

Regulators 15.2% 27.6% - 8.7% 1.7% 3.3%

Retail Banks & Building Societies

7.0% 14.4% 14.3% 11.2% 3.3% 14.3%

12

Sector Median Salary Average Salary


Commodity Trading £78,000 £75,000 4.0% £94,947 £87,289 8.8%

Consulting £98,500 £91,600 7.5% £120,853 £111,189 8.7%


£60,000 £60,000 0.0% £77,200 £73,600 4.9%


£82,500 £80,000 3.1% £91,518 £87,901 4.1%

Fund Services £68,825 £65,500 5.1% £74,346 £70,893 4.9%

Insurance £76,500 £70,000 9.3% £85,857 £80,312 6.9%

Investment Banking £91,000 £83,000 9.6% £99,534 £91,456 8.8%

Investment Management £90,000 £85,000 5.9% £92,129 £87,254 5.6%

Non Financial Services £69,200 £65,000 6.5% £82,954 £75,575 9.8%


£67,500 £65,000 3.8% £81,660 £75,540 8.1%


£80,000 £71,300 12.2% £90,685 £85,332 6.3%

Private Equity £125,000 £125,000 0.0% £126,625 £117,156 8.1%

Ratings Agencies £86,750 £81,000 7.1% £97,125 £81,400 19.3%

Regulators £70,000 £60,000 16.7% £71,327 £68,000 4.9%


£95,000 £90,000 5.6% £97,933 £92,881 5.4%

3.5.2 Shifts in median and average salaries

For the second year in a row, median pay for regulators grew the sharpest in the year rising by 17%, followed by private banking & wealth management where pay rose by 12%. Ratings agencies saw average pay grow by 19% with the lowest growth seen for exchanges and trading platforms.

13

4 . Bonus ExpectationsA look at sentiment towards bonus payments for the current year.

OverviewFig 4.1

Overall bonus expectations have increased this year with 66% expecting a bonus - a 5% increase on last year.

4.1.1 Overall bonus expectations

4.1.2 Expectation of change in bonus

This year, 40% of respondents are expecting an increase in their bonus compared to 34% last year. However, 16% are expecting a decrease, which is 3% more than last year.

14

GenderFig 4.2

This year, the average expected bonus for men is almost double that which is expected by women. However, the bonus as a percentage of average salary has increased for both sexes by just over 8%.

Gender2014 2013

Average Bonus % Average Salary% Expecting a

bonusAverage Bonus % Average Salary

Female £17,429 26.3% 78.1% £14,996 17.9%

Male £32,080 40.0% 78.8% £26,674 31.9%

Prefer not to say £7,500 11.3% 66.7% £9,000 10.8%

TOTAL £29,437 37.9% 78.6% £24,573 29.4%

Job LevelFig 4.3

Job level2014 2013

Average bonus% Average

Salary% Expecting a

bonusAverage bonus

% Average Salary

Analyst/Executive £6,411 11.6% 71.3% £4,008 7.7%

Associate/Manager £10,298 16.1% 77.4% £9,725 15.9%

AVP £8,330 11.1% 76.6% £6,468 9.5%

Manager £21,239 32.3% 80.6% £20,505 29.7%

Vice President/Senior Manager £23,961 24.5% 89.2% £20,405 22.3%

Director/Executive Director £55,354 43.2% 82.8% £43,135 36.4%

Managing Director/Partner £124,680 59.9% 81.4% £102,930 53.9%

Other £5,440 5.9% 47.0% £7,441 8.9%

TOTAL £29,437 30.5% 78.6% £24,573 27.5%

In line with last year, bonus expectations rose for all levels. Managing Director/Partner level staff expected the highest bonus at an average of £124,680, 60% of average salary.

Female Male Percentage

Analyst/Executive £2,721 £7,384 36.8%

Associate/Manager £9,509 £10,505 90.5%

Assistant Vice President £21,000 £6,697 313.9%

Manager £7,542 £24,447 30.8%

Vice President/Senior Manager £17,921 £25,452 70.4%

Director/Executive Director £42,059 £57,319 73.4%

Managing Director/Partner £120,000 £125,040 96.0%

Other £2,867 £6,244 45.9%

TOTAL £17,429 £32,080 54.3%

Looking at the comparatives based on gender and job level:

15

FunctionFig 4.4

Function2014 2013

Average Bonus

% Average Salary

% Expecting a bonus

Average Bonus

% Average Salary

Administration £22,375 26.2% 75.0% £21,531 28.7%

Compliance £14,674 16.8% 83.3% £11,582 14.9%

Finance £23,772 29.4% 83.6% £19,774 25.7%

HR £17,046 21.5% 80.8% £13,446 17.9%

Internal Audit £19,538 22.9% 92.3% £18,488 23.9%

Operations & Middle Office £15,609 20.9% 70.7% £14,781 21.5%

Revenue Generator £91,609 73.6% 81.0% £81,683 72.1%

Risk & Governance £24,079 24.9% 92.7% £22,374 24.6%

Sales & Distribution £38,116 40.3% 79.6% £34,235 42.4%

Strategy & Change £47,387 38.7% 86.2% £27,018 24.1%

Technology £18,098 19.2% 77.9% £15,770 17.7%

Other £45,455 42.8% 72.9% £40,981 42.0%

TOTAL £29,437 30.5% 78.6% £24,573 27.5%

Bonus expectations as a proportion of pay were fairly consistent across most functions when compared to last year.

The highest proportions were found with Revenue Generators who expect to receive 74% of their salary as bonus. Those in Compliance have the lowest expectations at just 17%.

Over 90% of Risk and Governance and Internal Audit professionals expect to receive a bonus compared to just 71% of Operations and Middle Office staff.

16

SectorFig 4.5

Sector

2014 2013

Average Bonus

% Average Salary

% Expecting a bonus

Average Bonus

% Average Salary

Commodity Trading £30,547 32.2% 87.0% £25,958 0.3%

Consulting £27,822 23.0% 77.4% £22,709 0.2%


£14,000 18.1% 83.3% £8,500 11.5%


£27,594 30.2% 81.8% £20,078 22.8%

Fund Services £7,184 9.7% 70.0% £7,211 10.2%

Insurance £14,486 16.9% 77.9% £14,799 18.4%

Investment Banking £27,301 27.4% 76.9% £23,663 25.9%

Investment Management £63,117 68.5% 81.2% £61,704 70.7%

Non Financial Services £36,151 43.6% 77.2% £12,857 17.0%


£18,131 22.2% 79.2% £16,371 21.7%


£24,167 26.6% 76.0% £19,604 23.0%

Private Equity £145,625 115.0% 100.0% £117,125 100.0%

Ratings Agencies £19,125 19.7% 100.0% £18,500 22.7%

Regulators £3,246 4.6% 61.5% £4,731 7.0%


£20,533 21.0% 90.0% £19,807 21.3%

TOTAL £29,437 30.5% 78.6% £24,573 27.5%

The highest bonus expectations were held by staff working in Private Equity at £145,625. The lowest expectations are with Regulators, and Fund Services firms.

In addition, all Private Equity and Ratings Agency employees are expecting to receive a bonus compared to just 62% of Regulators.

17

5 . Expectations & ReactionsThe sentiment of City staff towards pay prospects for 2013.

OverviewFig 5.1

GenderFig 5.2

Half of respondents this year, believe that they will receive a pay increase in 2015. This is a small rise on last year’s findings.

Both men and women have similar expectations towards pay increases in 2015, with women just slightly more optimistic than men.

5.1.1 Expectation of salary increase

5.2.1 Expectation of salary increase

18

Job LevelFig 5.3

There is a stark contrast between the different levels in terms of expecting a pay increase. Nearly three quarters of Associate/Manager staff expect a pay rise in 2015, compared to just one third of Managing Director/Partner level employees.

FunctionFig 5.4

Operations & Middle Office and HR staff were the least optimistic about pay prospects for the coming year. Compliance and Strategy & Change staff are the most optimistic.

19

SectorFig 5.5

Payments, Clearing, Custody & Counterparty, Commodity Trading, Ratings Agencies and Non Financial Services are the most optimistic sectors.

Corporate Broking & Stockbroking, Private Equity and Regulators expect continued pay pressure in the coming year.

20

Bonus DissatisfactionFig 5.6

5.6.1 Action taken if dissatisfied with bonus payment This year we have seen the biggest increase in those who would change roles as a result of a poor bonus to the highest levels since the survey began.

Employees are more interested in moving overseas when compared to last year, but this has not returned to the levels experienced in 2011.

This year we have seen the highest level of employees who would take no action if they are not happy with their bonus. This suggests that employees are becoming more accustomed to a lower bonus than they have done previously.

21

Market Insight

Where do you expect the most new financial services jobs to be created in the next year?

1 London (45%)

2 Singapore (14%)3 Shanghai (12%)

5=Hong Kong (8%)UAE (8%)

7 Kuala Lumpur (4%)

4 New York (9%)

22

In which location would you prefer to work?

1 London (70%)

2 New York (12%)3 Singapore (7%)


7 Shanghai (1%)

6 Kuala Lumpur (2%)

23

2 New York (12%)


About Astbury MarsdenWe specialise in recruiting uniquely talented people in business technology, business transformation, regulatory and assurance functions and specialist technical skills. We intimately understand the dynamics of the financial services, energy and professional services markets; making sure we know the people our clients need to occupy critical roles throughout their business. We help clients determine the people they need and then we find the best of them.

We have a global perspective and we are territory-neutral. We look for market identifiers that we recognise, and apply our experience and intelligence to solve the challenges they face. Our regional hubs established in London and Singapore allow us to serve our clients across EMEA and throughout Asia.

You can find more out at www.astburymarsden.com

Singapore

Mark O’ReillySingapore Land Tower, 50 Raffles Place, Singapore 048623+65 6829 7122

London

Adam Jackson60 New Broad St, London EC2M 1JJ+44 (0)20 7065 1222

Report13_Compensation_EMAIL

Documents

Transcript of Report13_Compensation_EMAIL