February 25, 2019
By Sinead Cruise and Iain Withers
LONDON (Reuters) – The top bosses of Britain’s biggest banks are paid on average 120 times more than the median pay of their U.K. employees, bank documents have shown, as a new rule puts pay disparities at the country’s big businesses under sharper scrutiny.
Britain’s biggest domestic lender Lloyds Banking Group has the starkest pay difference, with Chief Executive Antonio Horta-Osorio – the sector’s highest-earning boss in 2018 – on 169 times as much as the median paid employee on 37,058 pounds ($48,164), the company’s annual report showed last Wednesday.
The gulf widens to 237 times when compared with staff in Lloyds’ lowest pay quartile, who received an average pay package of 26,490 pounds in 2018, compared with the 6.3 million pounds Horta-Osorio took home.
The banks made the disclosures alongside full-year results over the past fortnight, ahead of new reporting requirements coming into force next year that oblige firms to set out the ratio of CEO pay to a median UK employee and those in the lowest and upper pay quartiles.
Banking giant HSBC had the next largest pay disparity, with new chief executive John Flint pocketing 4.6 million pounds last year – 118 times as much as its median paid employee in Britain.
“HSBC’s pay strategy is designed to appropriately reflect the role, responsibility and skills of the individual and to also be competitive in order to ensure we are able to attract and retain individuals with the appropriate skills for each role,” a spokeswoman for the bank said.
CEO to median employee pay ratios at rival FTSE 100 lenders Royal Bank of Scotland and Barclays were not too far behind, at 97:1 and 96:1 respectively.
Barclays, Lloyds and RBS declined to comment.
Pay disparities have come under closer scrutiny in Britain in recent years, with separate gender pay-gap reporting requirements highlighting wide discrepancies between women and men, particularly in the finance industry.
The pay ratio reporting comes as the City of London Corporation, which manages London’s financial district, on Monday launched a campaign against low pay at financial firms. The body is urging companies to pay their staff at least the London Living Wage of 10.55 pounds ($13.73) per hour.
“One in five people employed in the capital don’t earn a wage they can live on. I’m calling on City firms to help consign this statistic to the history books,” said Catherine McGuinness, the City’s policy chief.
In its annual report Lloyds said it would pay all its full-time staff a minimum salary of 17,500 pounds from April this year, which it said would mean a raise of up to 9.9 percent for some colleagues.
Lloyds said this salary level was 7 percent above the National Living Wage, but it did not refer to the higher London Living Wage.
Large pay ratio gaps remain despite the four banks showing relative restraint last year, with pay for the quartet of CEOs broadly flat or down on the prior year.
Horta-Osorio’s pay packet was down from 6.4 million pounds in 2017, while Flint received less than his predecessor Stuart Gulliver’s 6.1 million pounds.
RBS boss Ross McEwan made 3.6 million pounds, up from 3.5 million pounds, while Barclays chief Jes Staley was the lowest paid after earning 3.4 million pounds, down from 3.9 million pounds.
(Reporting By Sinead Cruise and Iain Withers; Editing by Hugh Lawson)