Standard Chartered's 2018 remuneration report is out today. If you work for the bank you can be forgiven for puzzling over the perennial question arising every year on this occasion: who are these Stan Chart people on the enormous pay packages?
Each year, Standard Chartered divulges that a few of its highest paid people earn surprisingly large amounts and this one is no different. In 2018, someone at Standard Chartered earned around $10.3m and someone else earned around $9.5m. The bank doesn't disclose their names. Potential contenders for the giant pay include CEO Bill Winters or Roberto Hoornweg, the former Brevan Howard partner who joined as head of the markets business at the start of 2017.
It's not unusual for banks to pay a few top people excessively well. - Barclays, for example, has someone on around $14m and six people on ~$7m, but Standard Chartered's generosity to a few people at the top is accompanied by comparative carefulness when it comes to paying people lower down its ranks. Last year, average total compensation for Standard Chartered's elite material risk takers (MRTs) was $882k. Across Barclays as a whole, the average MRT was paid $1.3m - nearly 50% more.
Standard Chartered would likely argue that geographical differences account for much of the discrepancy. - While many of Barclays' MRTs are based in expensive New York City, Standard Chartered's activities are skewed towards Asia, where pay is typically lower. Nonetheless, Standard Chartered can be very generous when the mood takes it - witness the packages paid historically to former head of global markets Mike Rees, who allegedly earned $73m between 2009 and 2014, and is now living on a Tuscan vineyard.
Notably, Standard Chartered did increase pay for its material risk takers for 2018. In 2017, average compensation for the bank's material risk takers was lower still at $796k. The recent pay rise was generous in a year when the bank is cutting costs, and may reflect the comparatively strong performance of the bank's financial markets business, which achieved a 3% increase in fixed income revenues in 2018 while banks like Deutsche and Credit Suisse suffered double digit percentage declines.
Even so, Standard Chartered's average MRT was still paid on a par with the MRTs at government owned RBS last year, as per the chart below. And no one at RBS earned more than $6m for 2018.
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