Bankers have paid themselves far more than shareholders since crisis.

Guardian: “Bankers have been given a stark warning by the deputy governor of the Bank of England that they are being paid too much and should expect a pay cut at a time when shareholders are losing out because of falling profits.”
“Speaking six years after the bailouts of Royal Bank of Scotland and Lloyds Banking Group, the deputy governor, Sir Jon Cunliffe, also said it would be “some time yet” before the public’s trust in banks, eroded during the financial crisis, was restored.
In an analysis of the way banks’ profits have been shared between shareholders and bankers before and after the 2008 crisis, Cunliffe concluded that bankers had received a greater share than shareholders since the near-collapse of the system.
“It is noticeable that since the crisis, for the industry as a whole, employees have received a larger share of a smaller pie relative to shareholders. And in the UK, due in no small part to one-off factors, this effect has been particularly pronounced,” Cunliffe said.
Some of the highest-paid jobs are in bonds, commodities and currencies, he said. These are areas which banks are pulling back from as a result of a tougher regulatory stance, Cunliffe added, which in turn should reduce the number of top earners.
….The issue of bankers’ pay continues to be controversial, despite changes to the way bonuses are structured and attempts by the EU to impose a cap on bonuses of 100% of salary, or 200% if shareholders approve.
….Cunliffe was speaking before the third-quarter reporting season for the major UK banks, when they start to determine how much money to set aside for bonuses. His analysis shows that in the decade before 2007 the pay bills of banks increased in line with profits but that this changed after the crisis, with bankers getting a greater share of profits, particularly in the City.
“In the 10 years before the crisis, for the global banks, profits attributable to shareholders averaged 60% of the pay bill. For the big UK banks, profits were about 75% of the pay bill. Since the crisis that picture has changed markedly. In 2013 profits attributable to shareholders were down from 60% to around 25% of the large global banks’ pay bills in 2013,” Cunliffe said.
“Put simply, shareholders have gone from getting 60 cents for every dollar in pay for staff to getting 25 cents per dollar. Across the big UK banks in 2013, the fraction had fallen to just 2% – that is to 2p per pound paid to staff.”
….Cunliffe said “societal anger” had been the motivation for much of the reform of the sector in the six years since the bailouts, which had left taxpayers with an 81% stake in RBS and 24% in Lloyds.
He cited a number of changes to make banks strong, such as UK institutions having £150bn more capital than before the crisis, and bigger holdings – three times as much – of assets that can sold be immediately in a crisis.
One of the reasons that returns to shareholders are falling is the cost of misconduct, such as Libor rigging and mis-selling payment protection insurance. “These have reduced UK banks’ pre-tax profits from around £20bn to less than £10bn during 2013. One hopes this will also be a temporary effect,” Cunliffe said.