Will Corbyn’s proposed wage cap affect bankers?
Leader of the Labour Party, and of The Opposition, Jeremy Corbyn has set out plans to curb boardroom pay
This follows reports of Corbyn suggesting a maximum wage or a maximum earnings cap.
In a press conference, Corbyn explained that Labour would impose a 20:1 pay ratio on any firm receiving a public contract. This means that someone earning the living wage, slightly over £16,000 ($19,293) a year, would permit an executive of the same company to earn close to £350,000.
In any case, the maximum wage would be, according to Corbyn, ‘somewhat higher’ that his annual wage of £138,000 a year.
So how could this feasibly affect the banking sector in the UK?
As you can imagine, CEOs of UK-based banks earn a lot more than £350,000.
Even if the average wage of personal bankers was considered, rather than the living wage, there is a huge gap. According to Payscale, the average personal banker earns £18,000 a year. This would lead to a wage, according to the 20:1 ratio, of £360,000.
To put this into context, the CEOs of the top banks in the UK earned in the millions in 2015. Ross McEwan (RBS) earned $6.1m, Jes Stanley (Barclays) earned $6.9m, Antonia Horta-Osoria (Lloyds) earned $11m, and Stuart Gulliver (HSBC) earned $11.2m.
With that in mind, if the wage gap becomes legislation, which is very unlikely, there is certain to be at least one huge sector left unhappy.