Investment bankers still get paid much more than other professionals, including doctors and engineers, but for the first time in a generation, the gap is narrowing.
In what remuneration experts say marks only the beginning of potentially the largest adjustment in decades, average pay per head in a sample of nine European and U.S. investment banks has fallen from 9.5 times the private sector average in 2006 to 5.8 times last year, according to research compiled by PwC exclusively for the FT.
The study shows that the pay premium that was built up amid the deregulation wave since the 1980s and the debt-fueled bonanza in the past decade is waning six years after the financial crisis.
"Bank pay has fallen further and faster than many people think, and 2012 has seen a material reallocation of returns from employees to shareholders," said Tom Gosling, a partner at PwC's rewards practice.
Last year, European banks in particular have cut pay, despite strongly rising profits, in a stark sign of how the changes go beyond cyclical adjustments.
Median profits at investment banks rose 28 percent in 2012, excluding the quirky effect of the valuation of their own debt. But pay fell 6 percent.
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"There have always been wild swings, but what is different now is that pay has changed structurally," said Mark Quinn, a partner at Mercer's rewards practice.
But bankers warn of a growing rift between the U.S. and Europe, where regulatory pressure and slower revenue growth is pushing down pay much more markedly.