Many bonuses are paid to employees at the top of the income distribution for whom they make up a much larger fraction of total remuneration (23% of the top 1% earners’ incomes in finance and 17% in the rest of the economy). This finding is consistent with existing evidence (Bell and Van Reenen, 2014). As bonus payments represent variable pay, adjusting financial sector pay to account for employees’ risk aversion (i.e. the difference between their actual pay and the certainty equivalent) is relatively more significant than in other sectors.