Luxembourg saw a total of 44 high earners in financial institutions and investment firms in 2023, two less than 2022, according to data by the European Banking Authority on 18 December 2024. Of these, 39 were male and five were female, continuing the trend of a gender imbalance among top earners in the financial sector. In terms of earnings, the majority, 40 individuals, earned between €1m and €2m, while four high earners reported incomes ranging from €2m to €3m.
The EBA’s report also included broader findings for the European financial sector as a whole, showing a stable overall number of high earners. Across EU banks and investment firms, the total number of individuals earning over €1m remained steady at 2,343 in 2023, the same as the previous year. However, the report highlighted contrasting trends between credit institutions and investment firms.
In credit institutions, the number of high earners grew by 5.21%, from 2,017 in 2022 to 2,122 in 2023. This increase was attributed to the robust performance of these institutions and rising salary levels in response to inflation. Conversely, the number of high earners in investment firms fell sharply by 32%, from 325 in 2022 to 221 in 2023. The steep decline was particularly pronounced in the Netherlands, where the number of high earners dropped by 62.6%, or 72 individuals. The downturn in investment firms was linked to a less successful financial year and lower market volatility, which reduced overall earnings.
Another key finding of the EBA’s analysis was the persistent gender imbalance among high earners, particularly in top-paying roles. In 2023, 89.8% of high earners in credit institutions were male, a slight decrease from 90.9% in 2022. The gender disparity was even more pronounced in investment firms, where 95% of high earners were male, down from 96.6% the previous year. The report called for further efforts to achieve gender balance, especially in higher-paid positions, where the gap remains particularly significant.
The EBA also noted a significant improvement in the percentage of identified staff within investment firms. The proportion of staff considered “identified”--those whose remuneration is likely to have a material impact on the firm’s risk profile--rose from 53.5% in 2022 to 87.3% in 2023. This increase is primarily attributed to the implementation of the regulatory technical standards (RTS) under the investment firms directive (IFD), which mandates a clearer identification process for these roles. As a result, the proportion of identified staff in investment firms is now comparable to that of credit institutions, where 88.6% of staff were classified as identified in 2023.
Regarding compensation structures, the report revealed that the average ratio of variable to fixed remuneration for high earners in credit institutions rose to 87.8% in 2023, up from 85.4% in the previous year. This increase aligned with the overall improvement in the return on equity for EU/EEA banks, which grew from 8.1% in December 2022 to 10.4% in December 2023. On the other hand, the variable-to-fixed remuneration ratio for high earners in investment firms decreased significantly, dropping from 459.1% in 2022 to 304.8% in 2023. This decline is attributed to the lifting of the 100% cap on the ratio of variable to fixed remuneration for investment firms, a change that came into effect in 2021.