There's a good reason CEOs on Wall Street don't want to break up the banks: It's also likely to crimp their pay.
"Bank executive compensation is closely and positively related to the size of the institution, but not generally related to profitability," Keefe, Bruyette & Woods analysts said in a note to clients.
Talk about a one-two punch for investors. As big bank profitability declines, CEOs remain reluctant to consider splitting the companies up into smaller pieces.
JPMorgan Chase CEO Jamie Dimon earned $27 million last year, the bank said in a regulatory filing, and the stock's performance (up 48 percent since 2009) might justify it over that time frame. Elsewhere, though, other big bank CEOs with paychecks greater than $20 million and less substantive performance might have something to sweat.
"There seems to be little relationship between profitability and compensation, but a strong relationship with the size of banks," the report from KBW's Frederick Cannon and Allyson Boyd noted.
The report explains that smaller and regional banks, which spend less to compensate CEOs, have outperformed their large-cap peers since 2009, generally speaking (Wells Fargo is the most notable exception, having gained more than 80 percent on markets since 2009). This includes banks like Sun Trust and US Bancorp.
Regulators are considering dialing up the heat on senior bankers, including on extended payouts for delayed compensation, but, according to the KBW report, left the matter of compensation to boards.
Citigroup is still downsizing and has exited or will exit 19 consumer markets, CEO Michael Corbat said on the bank's most recent earnings call. But there are other businesses the bank appears committed to holding. Corbat said he aims to continue running Citigroup's Banamex business, which is one of the largest consumer banks in Mexico, when asked by an analyst if he'd consider selling that, as well.
One Wall Street analyst said that for now, executives have nothing to sweat — but this could change, as early as this November, once Americans settle on who will be the country's next president.
"There's no momentum in Washington to make this happen right now," said the analyst, who was not authorized to speak on CEO pay.