LONDON (Reuters) - Global banks expect to increase base salaries by less than 3 percent this year and most are not planning to overhaul their pay structure in the face of tougher European Union rules on bonuses, a survey reported on Thursday.
Salary increases across banks, insurers and other financial services firms are expected to be between 5-8 percent in emerging markets, 2-3 percent in North America and 1.5-2 percent in Europe, according to a survey of 63 firms by consulting firm Mercer.
The survey said about 60 percent of companies predicted 2015 bonus levels would be similar to 2014, although 20 percent expected levels to increase from last year. Increases are most expected in private banking, private equity, investment banking, and property & casualty insurance roles.
The survey showed 40 percent of banks had last year introduced role-based allowances (typically 12 monthly payments that are set at the start of the year but not counted as basic pay by banks) in response to a new European Union law capping bonuses at 200 percent of salary, and an additional 10 percent were planning to introduce them.
The European Banking Authority (EBA) said in October the role-based allowances counted as variable pay, so banks needed to adapt rules again, but Mercer said its survey showed very few firms were planning to eliminate them.
“Based on the findings from Mercer’s survey, it seems 2015 will be a year for stabilizing compensation programs after several years of changes in large part due to regulatory requirements since the financial crisis,” said Vicki Elliott, partner at Mercer.
The survey said salaries in life insurance and property and casualty insurance are expected to rise by more than 3 percent this year, but banks expect to lift salaries by 2-3 percent.
Reporting by Steve Slater; Editing by Vincent Baby