This is how much of a disadvantage London's at now when it comes to pay
Bankers in London have traditionally been paid more than bankers anywhere else. Goldman Sachs, for example, appears to pay its average UK-based employee double the global norm.
However, London doesn't pay best any more. Among leading financial centres, it pays worst.
Two recent pieces of news illustrate the point.
Firstly, Stuart Gulliver said on Friday that two year guarantees are now commonplace in Hong Kong (this follows an earlier claim that some people in Asia are receiving guarantees worth $15m).
By comparison, two year guarantees are outlawed in the UK and one year guarantees are permissible only under exceptional circumstances. From January, these rules will apply throughout the EU and will extend to anyone working in an EU-based bank anywhere in the world (placing HSBC, Deutsche and BarCap at a disadvantage).
Secondly, a big fuss is being made in the US at the prospect of 'a portion' of this year's BAML bonuses being paid in stock if the bank fails to meet asset disposal targets.
In the UK, this is no big deal - the FSA already obliges banks to defer 40-60% of bonuses over three years and the EU regulations that will be introduced from January promise to restrict the cash portion of bonuses to 20-30% of the total.
In Asia and the US, however, there are no firm requirements regarding the proportion of bonuses that must be deferred.
Our own bonus expectations survey highlighted the disparity in compensation structures globally. In the US and Hong Kong, nearly 80% of the financial services professionals we surveyed expected all of their 2010 bonus to be available immediately, in cash.
To deal with bonus restrictions, banks in London have hiked salaries. This may prove a disaster. If costs need to be cut, it doesn't take a genius to see where in the world the hatchet will fall first.
