CEO Pay at Rescued Banks Exceeds S&P 500 Average, Study Shows
Share | Email | Print | A A A
By Steve Geimann
Sept. 2 (Bloomberg) -- Chief executive officers at 20 banks that got U.S. aid received compensation 37 percent higher than the average for leaders at Standard & Poor’s 500 companies and are poised for gains as stock values rise, a study showed.
Lenders including Bank of America Corp. and Wells Fargo & Co. paid CEOs an average of $13.8 million last year, topping the $10.1 million for S&P 500 leaders, according a report released today by the Institute for Policy Studies. Average CEO pay was 430 times larger than for typical workers, and at nine of 20 banks the value of stock options soared $90 million in a year, the Washington-based research group said.
“Compensation packages for top executives, in short, remain at levels completely disconnected from any real underlying value that executives may offer,” the report said. “Outrageously large rewards for executives give executives an incentive to behave outrageously.”
Compensation at U.S. financial companies is being scrutinized after Congress adopted a rescue plan and pumped $300 billion into the 20 troubled lenders. The Obama administration named Kenneth Feinberg as a pay master for seven U.S. companies, including Citigroup Inc. and General Motors Co. that got more than one bailout.
Bank executives may be “poised for spectacularly rapid recovery” as rising share prices for nine of 20 banks getting Troubled Asset Relief Program aid led to a $90 million gain in stock-option values. JPMorgan Chase & Co. led with a $20.6 million gain for five executives, followed by $17.9 million each for American Express Co. and PNC Financial Services Group Inc., the study showed, based on calculations using proxy statements.
$3.2 Billion in Pay
The top five executives at the 20 banks had a three-year pay total of $3.2 billion, with $1.2 billion in 2006 and 2007, and $800 million last year, the study showed, citing corporate proxy statements.
The institute said government efforts to rein in pay focus on companies that got aid from the Troubled Asset Relief Program, and said results may be modest as firms such as Goldman Sachs Group Inc. and JPMorgan repay aid to avoid pay limits.
“The federal government has, to this point, not moved forward into law or regulation any measure that would actually deflate the executive pay bubble that has expanded so hugely over the last three decades,” the study said.
The Institute for Policy Studies, whose Web site bills it as “Washington’s first progressive multi-issue ‘think tank,’” releases its “Executive Excess” report each year.
To contact the reporters on this story: Steve Geimann in Washington at sgeimann@bloomberg.net.
Last Updated: September 2, 2009 00:01 EDT
________________________ ________________________ _____________
What a freaking disgrace. This truly is revolting.
