U.K. Financial Services Employees Say Colleagues Overpaid

June 6, 2013 by Ambereen Choudhury

Most U.K. financial-services employees say some within their companies are paid too much amid negative public sentiment toward the industry, according to a survey by the Chartered Institute of Personnel & Development.

Three-quarters of those surveyed said some colleagues are paid “excessively,” the CIPD said in a report called “Focus on Rebuilding Trust in the City,” published on its website. The study found 79 percent of those below senior management are most likely to say some workers are overpaid.

“Half of respondents working in banking and financial services say that the negative public perception of the banking sector is a fair reflection of what has gone on in recent years,” said the London-based CIPD, which represents human- resources executives. Senior managers are “less likely” than more junior colleagues to say the negative public perception toward financial services is fair, the survey said.

The U.K. capital’s position as a financial center has been under scrutiny following a series of market abuses such as the interest-rate rigging scandal at banks including Barclays Plc, where Chief Executive Officer Robert Diamond resigned last year. Firms have also been under pressure from regulators and the government to cut compensation amid public anger over the bailouts of Britain’s Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc.

The average bonus per employee in the financial-services industry fell 11 percent to 12,000 pounds ($18,500) in the year through March 2012, the Office for National Statistics said in September. That compares with the average 1,400-pound bonus paid to employees across the entire economy.

“These findings suggest that while some senior leaders in parts of the banking sector are having at least partial success in changing culture to become more customer focused, some parts of the industry are largely operating as before,” the CIPD said.

The survey of 1,026 U.K. employees included those in investment banking, insurance, broking and banking in April.