Bank Chiefs' Average Pay Rises by 36 Percent
Bank chiefs’ average pay in the US and Europe leapt 36 percent last year to $9.7 million, according to data compiled for the Financial Times, despite variable performance across the sector.
Two of the industry’s biggest names – Jamie Dimon, the JPMorgan Chase chief executive, and Goldman Sachs’ Lloyd Blankfein – were paid more than 15 times their 2009 earnings.
Mr Dimon received nearly $21 million in 2010, topping the FT’s survey of the salary and bonus packages awarded to 15 top bankers. Mr Blankfein earned $14.1 million, including a $5.4 million cash bonus – up from $863,000 in 2009.
In the UK, the chief executives of Barclays , HSBC , Lloyds Banking Group and Royal Bank of Scotland were awarded cash and stock bonuses valued at more than $26 million last year. That contrasts with 2009, when all four declined bonuses in a nod to public and political furore.
The analysis by Equilar, the US-based pay research company, shows chief executive pay at several banks is still significantly lower than its pre-crisis high.
Mr Blankfein earned more than $70 million at Goldman in 2007 while Mr Dimon received $40 million in 2006.
Regulators have declined to impose caps on bank pay, instead introducing changes they believe will limit incentives to take excessive risks. That has led many banks to increase fixed salaries, reduce employees’ reliance on annual bonuses and defer cash and stock awards over several years.
“The real story around pay is the progress on ensuring bonuses are deferred, paid in shares and subject to clawback and performance targets, rather than the headline figure,” said Angela Knight, British Bankers’ Association chief executive.
The Equilar analysis shows, however, that salary is generally only a fraction of total pay-outs.
James Gorman, Morgan Stanley chief executive, was paid $14.9 million in 2010, only $800,000 of which was fixed salary. A $9.3 million stock bonus awarded to Brady Dougan, Credit Suisse chief executive, was four times his fixed pay-out.
Two of the biggest winners in the 2010 pay stakes were UK chief executives who have since left their employers.
Eric Daniels, former head of Lloyds Banking Group, was awarded $8.4 million last year, up from $5 million in 2009. Former Barclays head John Varley earned nearly $6 million, a 239 percent increase on 2009.