The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Executive pay: To cap or not to cap?

Debate about compensation must address wider industry issues, but there are no easy solutions.

The issue of executive pay at investment banks is not easy to tackle. So good luck to Timothy Geithner, who says he plans to come up with "a very substantial change" to Wall Street compensation in coming weeks.

The US Treasury secretary has already said that he is against capping executive pay. Is that the right thing to do, however? For sure, imposing limits on how much Wall Street executives are paid has already had consequences. Senior personnel have been leaving banks in droves to head to boutiques or start up on their own. UBS is reportedly boosting salaries for its senior bankers by 50% in order to retain staff.

But talent leaving Wall Street to go to boutiques means that a new level of investment banking is emerging. Mid-tier investment banks such as Evercore, Rothschild, Blackstone and now Citadel will bring much-needed competition to the sector.

Spreading business among more banks can only be seen as positive. There was a definite sense over 2003 to 2007 that having power distributed among only a handful of large investment banks increased risk. If one firm is succeeding in selling risky products, then another large firm will do the same to compete.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree