With Theresa May replacing David Cameron as the new Prime Minister of the UK, and the current political upheavals, what price is put on running the country and dealing with the intense pressures of the job? Many MPs leave behind a lucrative career in the private sector: can they ever hope to match their previous income should they reach the top jobs in government?
Emolument.com has analysed 4,906 UK salaries to provide a comparison framework for the Prime Minister’s salary (£143,000). Investment bankers, buy-side professionals and some consultants earn a lot more than Ms May’s annual salary.
|Investment Banking||Fund & Portfolio Managers|
|as % of PM’s Salary||
|as % of PM’s Salary|
|VP||£ 160,000||112%||£ 119,000||83%|
|Director||£ 280,000||195%||£ 195,000||136%|
|MD||£ 450,000||314%||£ 250,000||174%|
Graph 1,2 and Table 1 Showing the median total compensation in Investment Banking front-office and Fund & Portfolio Managers in the buy-side and how it compares to the PM’s salary.
Investment Banking, miles ahead. While Vice Presidents in front office jobs earn lower salaries than the Prime Minister, when including bonuses, they outperform Mrs May by 12%. For VP level and upwards, bankers significantly out-earn the head of the government, by up to 300% for managing directors.
Portfolio managers are not far behind. It takes longer for buy-side professionals to earn as much as the Prime Minister. Overtaking starts at the director-level with earnings 36% more than Ms May and up to 75% for managing directors.
|as % of PM’s Salary|
|Consulting (Manager)||£ 75,800||53%|
|Consulting (Partner)||£ 174,000||121%|
|Software Development (Manager)||£ 88,000||61%|
|Marketing (Manager)||£ 47,088||33%|
|Legal (Senior Associate)||£ 117,500||82%|
Graph 3 & Table 2 Showing Median Total Compensation in various disciplines and how they compare to the PM’s salary.
Consulting tries to keep up. Consultants try but don’t come close to the Prime Minister’s salary. A manager in advisory consulting makes half the Ms May’s salary with only partners earning more than the Prime Minister.
IT, Marketing & Legal fall behind. In all other jobs, even the most senior positions can’t compete with the salary of the head of government. The Prime Minister earns 40% more than software development managers, 70% more than marketing managers and 20% more than senior associates at law firms.
Alice Leguay, Co-Founder & COO at Emolument.com said:
“The challenge with top government officials’ pay is finding a comfortable ground between attracting top leaders and talent into politics away from the private sector, and being sufficiently low as not to offend taxpayers.”