When Bill Winters, CEO of Standard Chartered, presented the bank's full year results to shareholders today, they were titled, "Here for good." This may be so, but people who stay at Standard Chartered for too long risk foregoing a considerable amount of compensation.
Along with other European headquartered banks, Standard Chartered is now obliged to detail how much it pays its 690 material risk takers (MRTs) globally in terms of both salaries and bonuses. The answer, according to today's compensation report for 2017, is considerably less than rival banks.
As the chart below shows, average compensation for material risk takers across Standard Chartered last year was significantly less than at rival banks. Most notably, it was 35% below average compensation for material risk takers at HSBC's global banking and markets business. Both banks derive much of their strength from Asia and are therefore competing for similar staff.
Standard Chartered's compensation figures are bank-wide and not specific to its wholesale bank. However, even the average material risk taker across HSBC was paid an average of $1.1m last year, meaning that on a like-for-like basis, pay for material risk takers at Stan Chart remains nearly 30% less than at its rival.
Standard Chartered's comparatively poor pay comes after revenues in its markets business declined 18% last year versus 2016 amidst an attempt to reinvigorate the sales and trading operation under Roberto Hoornweg, the former Brevan Howard partner who joined as head of the markets business at the start of 2017. Hoornweg hired in Kevin Burke from Deutsche Bank as global head of sales in July, based out of Singapore, and made an additional 12 hires across its credit trading division across London, Singapore, Hong Kong and New York in the first half of the year. Standard Chartered's corporate and investment banking business is run by Simon Cooper, who joined from HSBC in 2016. Cooper is tasked with returning the business to growth. Corporate finance revenues at Standard Chartered were flat last year.
As Cooper and Hoornweg struggle to deliver results, there are suggestions that Standard Chartered has become a political and highly pressured place to work. One recent hire to Standard Chartered's investment banking division says this isn't a fair evaluation of his division though. "There's pressure everywhere on the street now," he says. "Our strategy is much cleaner and better understood by our clients than at the previous banks I worked for."
Commenting on its pay figures, Standard Chartered said: "We review remuneration for Material Risk Takers (and all other employees) against relevant market data and consider factors such as location, skills, experience and performance." The bank says it has recently launched a, " Fair Pay Charter, which clearly sets out the principles we use to guide our reward and performance decision-making globally, and supports our commitment of delivering fair and competitive remuneration to all colleagues.”
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