Compensation at the world's biggest banks rose last year, with 35 of them spending a combined 10 billion euros ($13.1 billion) more on staff than in 2011, figures compiled by Reuters show.
Bankers' remuneration has rarely been out of the spotlight over the last five years, as the industry's powerhouses were rescued from the brink during the financial crisis with hundreds of billions of taxpayers' dollars.
Policymakers have since fought to curb the bonuses they say encouraged excessive - and sometimes catastrophic - risk-taking.
Capping absolute pay levels is off-limits for regulators, but banks have talked a lot about cutting staff costs.
Reuters analyzed the 2012 results reported by banks in the benchmark EuroStoxx 600 index and their U.S. competitors and found staff costs rose to 275 billion euros across the group.
Two thirds of the banks analyzed increased compensation per person, though several attributed this at least in part to redundancy issues. The compensation ratio - the industry's preferred yardstick, which measures staff expenses against revenue - was up for 18 of the 35 banks.
Philippe Lamberts, a Belgian MEP who has also been outspoken on bank pay and supported a cap on bank bonuses recently agreed by members of the European Parliament, says the figures prove that, left to their own devices, banks do not reduce pay.
"To me it confirms that what we are doing on the remuneration front is necessary," said Lamberts, referring to efforts to restrict remuneration through bonus rules and other provisions in a European Union package of bank regulations.
PICTURE MORE COMPLEX
A recent survey from recruitment agency Morgan McKinley showed that bank staff who changed jobs in London in January enjoyed average pay rises of 23 percent.
But banks baulk at the suggestion they are paying staff more, saying things are more complex than the figures suggest.
U.S. retail banking giant Wells Fargo, however, was comfortable with the fact that per-person compensation went up about 2 percent last year and stands at the equivalent of 83,000 euros, placing the bank at the middle of the compensation table.
"We support our team members as a competitive advantage and are committed to compensating them based on performance," a spokeswoman said. The bank recorded pretax earnings of 28.5 billion euros in 2012, up from 23.7 billion euros in 2011.
Among other banks, it was not uncommon for per-person compensation to outstrip the rise in pretax profits. In eight of those where per-person compensation rose, pretax profit fell.
In another three cases, per-capita compensation went up, even though the banks actually recorded losses.
JOB CUTS TWIST
Banks say the figures can be deceptive. They have been cutting jobs, with 93,000 shed across the group in 2012, falling heaviest on some of the loss makers. The lay-offs incur redundancy costs that are grouped in with overall staff compensation, which also includes pensions and payroll taxes.
The per-head figures used are based on year-end headcount, since several banks have not released average headcount figures and declined to provide them to Reuters.
That means that if a significant number of staff left in the year, the per-person staff costs are overstated. Since year-end headcount is also used to calculate per-person costs for 2011, however, when banks also mostly laid off staff, the broad figures provide a consistent basis for comparison.
Where average headcount figures are available, these can show material differences. Bank of Ireland, still 15 percent state-owned, does disclose them, showing the bank's per-person compensation rose just under 4 percent. Year-end figures overstate it at 9.5 percent. Even so, it was a year when the bank's losses rose more than tenfold to 2.1 billion euros.
The highest per-head rise using year-end figures is Danske Bank, where Reuters figures show an 11 percent rise.
"The figures do not reflect actual developments in pay for Danske Bank employees," said Bent Jespersen, senior vice president at the Danish bank.
Jespersen said a union deal to increase wages 1 percent, plus "minor individual adjustments", pushed pay up. Staff departures also hit headcount, the bank said, a factor also cited by Switzerland's Banque Cantonale Vaudoise, which had the fourth highest increase in compensation per capita.
DEFERRED BONUS EFFECT
At Deutsche Bank, where per-head costs rose 5.9 percent, a spokeswoman said the figures included an element of deferred bonuses granted in 2009. Deutsche Bank also booked significant severance payments over the year, she said.
Investment banking giant Goldman Sachs, which saw an 8.8 percent rise, had the third-highest increase in per-head payroll costs. Goldman, which declined comment, also tops the table for highest average pay, at the equivalent of 310,000 euros, based on average euro/dollar exchange rates for 2012.
A source at another investment bank included in the analysis pointed out that their average staff costs were not comparable with banks that had large retail operations, where staff costs are lower. It said compensation ratios were more revealing.
For Goldman, pretax profit growth of 82 percent easily beat the rise in average compensation, and its compensation ratio actually fell to 38 percent in 2012 from 42 percent in 2011.
But across all the banks analyzed, the compensation ratio came in at just under 36 percent, up from 34 percent in 2011.
Sony Kapoor, managing director of think-tank Re-Define, which advises lawmakers on issues including banks, said European policymakers had examined restricting compensation ratios.
"It was very hard to apply at an aggregate level," he said, pointing out that it was difficult to set a level that would capture the diverse operations of different kinds of banks.
NO CHAMPAGNE YET
Though some will admit to enjoying the fruits of an improved remuneration climate, the feeling that they are being hard done by is hanging over the bank towers of London's Canary Wharf.
On New York's Wall Street it is a similar story.
A senior executive at one of the biggest U.S. banks said traders and bankers have been comparing their pay packages to 2009, a banner year for Wall Street profits and bonuses.
Even those who performed well and got bigger bonuses last year feel they are not being compensated adequately, he said.
Policymakers say bankers are being paid too much based on the levels shown in the Reuters data, where average compensation costs per head were 87,400 euros across 3.25 million staff.
Shareholders are pushing for more of banks' returns to be channeled to them, and less to staff. MEP Lamberts said governments that have bailed out banks should force pay cuts.
"People get very angry about it in state-supported banks because they think, 'That's our money here; why are they still being paid so much?'" said UK MEP Sharon Bowles, who chairs the European Parliament's Economic and Monetary Affairs Committee.
But not everyone agrees that less is better, including Federation of European Employers' head Robin Charter.
"What politicians and bureaucrats have always ignored is that high remuneration levels in the financial sector - and especially substantial variable payments - serve to minimize fraud levels, retain talent, drive high performance and encourage continuity of employment."
(Additional reporting by Lauren Tara LaCapra and Himanshu Ojha in New York and Anjuli Davies and Sinead Cruise in London.; Reporting By Laura Noonan; Editing by Alexander Smith and Will Waterman)