Salary survey: Private bank staff seek more share schemes
Staff at private banks are increasingly demanding changes in their pay structure, to give them a greater personal stake in the business that they generate for their employer, according to a report by the wealth management headhunting firm Sulger-Büel & Co.
Proft-sharing and direct equity schemes are particularly popular, said the firm's founder, Christian Sulger-Büel.
He said such schemes can have tremendous advantages for the private banks. "Direct equity aligns the interests of relationship staff with the interests of the bank - where staff loyalty is as important as the loyalty of the clients," he said.
Such pay structures are especially sought after in countries such as France, Spain and Italy, where personal tax is high and private bankers have traditionally been paid less than elsewhere.
However stock options, despite having the advantage of exposing staff to the risks as well as the rewards of the bank's performance, face serious problems in the current economic environment, said the report.
"If banking competition in Europe becomes as fierce as we expect, with strong inflationary pressure on salaries and bonuses, banks and asset managers are likely to find that the lead-time to maturity on stock options is going to put candidates off," it said.
Salary levels for private bankers continue to vary enormously across Europe, the report said, with base salaries in Switzerland still about 15-20% lower than London. In Belgium and France, private banking salaries are typically less than half of the London average.
Depending on which country staff are based in, Europe's larger banks pay a head of private banking base salaries of about €250,000-300,000 and senior relationship managers in the region of €75,000-200,000. Bonus structures can vary dramatically.
In the US bulge bracket players with operations in Europe, salaries tend to be higher. A head of private banking at such firms is probably on €300,000-500,000 and senior relationship managers could be earning a base salary of anything from €150,000 to €1.5m. There is a strong emphasis on linking bonuses to performance criteria.
Sulger-Büel said that when private banks are looking for staff these days, they need to look beyond investment bankers and corporate financiers, and consider private equity specialists and venture capitalists.
These are the people who have established the relationships with the new generation of entrepreneurs, he said, and it is essential to look creatively at their remuneration structure to keep them satisfied.
