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28 March 2024

Think again, bank CEOs are not the best paid

Published
By Shuchita Kapur

It's no surprise that bank CEOs get paid most handsomely when it comes to the cross-industry salary sweepstakes, but there are a few others in the industry who get better deals.

While a bank CEO’s paycheck dwarfs everyone else’s, it may not necessarily be the most lucrative one in the industry. When other factors such as performance and longevity are taken into account, there are other jobs in a bank that look much more lucrative than the top post.

According to a financial expert at Stanton Chase, an international executive search firm, some other jobs in the banking sector are capable of taking away the limelight from a CEO’s slot. So what’s better than a top-notch salary? Twenty top-notch salaries, it seems.

“In my opinion, the ‘best paid’ position in a bank is the Shariah Board positions. These individuals can sit on over 20 different boards and be paid handsomely for each position,” Shane Phillips, Mena Regional Practice Leader – Financial and Professional Services at Stanton Chase, told 'Emirates24|7'.

“They are then required to advise the Islamic bank on what would be Shariah-compliant and what wouldn’t be. This is a great job, and when the individual acquires numerous postings at once it becomes very lucrative,” he said.

According to him, next are the CEOs when it comes to getting biggest bucks but if risk factors are taken into account, there are still other jobs that look much better.

“The next best paid can be the CEO or the top front-office employee, if one includes bonuses. Of course, in a downturn, front office players can suffer not just pay cuts but job cuts – so it is a tough road to trudge,” he said. 

“Personally, salary aside, I think the best job in a bank is [that of] an economist because they have all the impact, get all the limelight, a plum salary (top economist can earn over $1 million dollars a year) and none of the accountability. What more could you ask for?” said Phillips.

“While the CEO can make a base salary of $700,000 plus and significant bonuses, they are ultimately accountable and required to deliver shareholder value even when the market is in a nose-dive. In fact, the number of CEOs who get fired, ousted to pushed out has risen 318 per cent (1985 to 1990 versus 2005 to 2010),” Phillips maintained.

“It is becoming much more socially acceptable to fire or relieve a CEO who is at the head of a non-performing business than it was 20 years ago. Thus, while the CEO is well paid, they really do have a tough job. Most often the CEO will have to make sacrifices regarding their family life, intimate life, and their health.

Intense travel, long hours and political warfare take its toll on banks top executive. As Winston Churchill said ‘The cost of greatness is responsibility’,” he added.

“Most people want the salary without the responsibility. There are no free lunches and everything comes at a cost. People should stop chasing the next rung in the corporate ladder and start chasing their dreams and ambitions. Who is the highest paid or should we ask who is happy and enjoying their jobs?” he said.

According to Charterhouse, the top paying jobs in the sector are that of a managing director (Dh95,000) and head (Dh110,000) within investment banking/private equity – organisational roles. As far as asset management roles are concerned, people on the same positions get an average salary in Dh90,000 to Dh100,000 bracket.

Within consumer banking, the country head seems the best paid – the average salary for this position can be Dh150,000. Next in line is chief risk officer, with an average salary of Dh80,000.

(Quoted figures are gross monthly salaries excluding bonuses.)