The heads of ABN AMRO in Asia and OCBC Bank are sick of overpaying their traders. Remuneration in financial services is “inherently unfair”, according to David Conner, chief executive of OCBC. The pay gap between, for example, those in trading and operations roles is too extreme, he told Singapore’s Institute of Banking and Finance (IBF) conference last week.
In an impassioned attack on traditional reward structures, Conner said those pocketing the fattest pay cheques often don’t generate as much revenue for banks as others who get much less money.
Also addressing the annual gathering of banking bigwigs, David Wong, South East Asia chief executive of ABN AMRO, said the solution is to close the gulf in pay between risk takers and risk managers. Wong said firms should consider paying fund managers and risk managers almost the same amount. “The incentive structure has to change,” he added.
Professor Ronald Collard, a partner at PricewaterhouseCoopers, said these disparities are caused by banks rewarding front office staff based on their short-term performance.
DBS chief executive Richard Stanley said banks can help to address employees’ remuneration concerns by giving current staff the first shot at any new job openings.
Criticising the practice of poaching top talent from rivals, Stanley told the IBF conference: “If there are job openings internally, staff must know that they have a better shot at the job rather than it being filled from the outside…The bulk of senior management must be home-grown. We have to find good people and ring fence them.”