Do Investment Bank CEOs Deserve Their Huge Payouts?
We’ve all heard that the banking industry is “too big to fail.” But should the same apply to bank exec’s salaries? Over the past decade, CEOs of “too big to fail” banks have collected $1.15 trillion in cash and stock—or an average of $19 million a year, according to regulatory findings. This sum easily eclipses the total return banking-industry investors would have received on the market.
An investor who put $100 into a market-weighted basket of shares would have just $81.60 left today.
According to Kevin Kelley of Denver-based Capital IQ, an investor who put $100 into a market-weighted basket of shares in Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley on January 1, 2001, would have just $81.60 left today.
A few “highlights” of bank-CEO salaries accrued during the Bailout Era:
- Lloyd Blankfein of Goldman has earned $233 million since 2004.
- Jamie Dimon of JPMorgan Chase has taken home $177 million since 2003.
- Ken Lewis of Bank of America earned $150 million between 2001 and 2009.
- Dick Kovachevic of Wells Fargo earned $97.5 million between 2001 and 2007.
- John Mack of Morgan Stanley earned $118 million—while the company’s stock value plummeted 25%.
- Vikram Pandit of Citigroup earned a $22 million retention package—even though the company’s stock has dropped 87% during his tenure.
“We know that people who run big banks invariably end up big winners,” says Phil Cannella, creator and host of The Crash Proof Retirement Show, “but does the consumer always have to be the big loser?”
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