The Financial Times reports this morning that bank heads’ average pay in the US and Europe increased by 36% last year. Salary increases are far outpacing corporate performance in the banking sector, which has seen revenues pare down substantially in the first two quarters this year due to heightened federal regulations and a sluggish economy.
Heads of the two most prestigious banks on Wall Street, JP Morgan’s (NYSE:JPM) CEO Jamie Dimon and Goldman Sachs (NYSE:GS) chief Lloyd Blankfein, are the two highest paid men in the industry, raking in $21 million and $14.2 million respectively from salaries and bonus packages in 2010. After having earned just 859,000 in 09′, Blankfein’s salary multiplied by more than 15x last year’s pay…
Other top banks are also reporting major pay hikes for head executives, with Barclay’s (NYSE:BCS), HSBC (NYSE:HBC), Lloyd’s (NYSE:LYG), and Royal Bank of Scotland (NYSE:RBS) lavishing CEOs and top management with a combined $26 million in 2010.
While the pay increases are eye-catching, executive salaries in 2010 still pale in comparison to compensation statistics from pre-crisis years such as 2006-2007, in which Blankfein earned $70 million (07′), and Dimon earned $40 million (’06).
The news will likely be not well received by public ears, after much clamoring from popular sentiment and federal regulators that limits should be imposed on executive compensation at giant financial enterprises as a form of punishment for their role in facilitating the market meltdown in 2008. In response to the outcry, many CEOs waived bonuses and agreed to take substantially lower salaries in 2008 and 2009. However, those days now seem to be behind us, as 2010 saw men like Blankfein receive massive pay-raises, in which they did not decline additional compensation in cash and stock bonuses.
Not all banking CEOs were feeling greedier, as a select few, including Citigroup’s (NYSE:C) CEO Vikram Pandit, pledged to earn nothing until federal bailout loans were repaid (Pandit earned a base salary of $1 in 2009.) However, with Citi back in the green in 2010, the CEO has seen his salary return to comparable levels to other banking leaders.
Despite a public perception that likes to believe the real crooks are on Wall Street, banking CEOs on average earned less in 2010 (9.7 million dollars) than the average for executives at companies listed in the S&P 500 ($11 million).