StanChart pays 118 staff $1.4 million or more, top earner Rees lands $9.5m
Asia-focused bank Standard Chartered Plc (STAN.L) paid 118 of its bankers at least 1 million euros ($1.4 million) last year, topped by a $9.5 million payout to Mike Rees, head of its wholesale or investment banking division.
Rees is often the biggest earner at Standard Chartered and his pay last year was down 35 percent from 2012 as profits at the bank fell, according to the bank's annual report released on Friday.
Standard Chartered said Rees, who has been promoted to deputy chief executive, could be paid $11.4 million pounds this year. That is 47 percent down from a maximum payout he could have received in 2013 of $21.4 million.
The bank has adjusted its pay structure to meet EU rules that will this year cap bonuses at 200 percent of base salary, in a move aimed at limiting hefty bonuses, which were blamed for encouraging the risk-taking that contributed to the 2008/09 financial crisis. Standard Chartered has increased base salaries and introduced "allowances" that increase the fixed pay element, and reduced potential bonus payments.
Chief Executive Peter Sands could be paid $12.4 million this year, down from a maximum payout of $14.5 million under the previous structure. He was paid $6.8 million last year, down 38 percent from 2012, as previously disclosed.
Standard Chartered reported its first drop in annual profits for a decade last year and said it faces a challenging firsthalf to 2014, as Asia markets slow, tougher regulations squeeze margins and its business in South Korea struggles.
The bank, which makes 90 percent of its profit in Asia, the Middle East and Africa, cut its bonus pool last year by 15 percent to $1.2 billion due to the weak performance.
Sands' base pay has been increased to $1.86 million from $1.68 million and he will get an allowance of $1.1 million. Rees' salary has gone up to $1.62 million and he will get an allowance of $1 million.
Standard Chartered is following several other banks, including Barclays (BARC.L), HSBC (HSBA.L) and Goldman Sachs (GS.N) to introduce an allowance, which will not be included in pension payments and should be more flexible than salaries.
Banks say they need to pay competitively to attract and retain staff, especially as many of the affected staff work outside Europe, and Asian and U.S. rivals do not face the same pay caps.
"The (EU bonus cap) proposal inevitably, and regrettably, resulted in an increase in fixed pay," Standard Chartered said in its annual report. It will pay the allowances to senior executives and hundreds of other staff.