First 3 Big Banks to Report Compensation Show Drop
Executives at JPMorgan, Morgan Stanley and Citigroup get lower stock awards.
Jan. 23, 2012 — -- The top executives at three large investment banks received stock award pay cuts of 15 to 25 percent after their shares took a beating in 2011. But their pay packages are still eye-popping for an industry that required a massive government bailout a few years ago.
JPMorgan Chase, whose profit fill 23 percent in the fourth quarter, saw stock bonuses fall for its top executives though the pay of CEO Jamie Dimon remained about the same.
The top 13 executives at JPMorgan Chase had a 15 percent cut in stock awarded, which is only a portion of executive compensation. Those executives received $60.9 million in restricted shares plus stock options, Bloomberg reported. Dimon's pay package was about $23 million.
In November, Dimon said he understood the frustration of the Occupy Wall Street protesters, who had camped outside where he was giving a speech. But he said large corporations contribute to the U.S. economy because they "pay their people more, are more diverse, with health benefits. It isn't like they're the bad actors here."
Figures from Equilar, an executive compensation data firm, show the executive stock awards at JPMorgan Chase, Morgan Stanley and Citigroup were lower this year. Goldman Sachs has yet to file compensation figures.
The total compensation of Morgan Stanley's CEO James Gorman fell 25 percent from 2010 to about $10.5 million, Dow Jones reported.
Morgan Stanley reported a loss of $275 million on Thursday, the bank's first quarterly loss since early 2009, compared with a gain of $600 million a year ago in the same period, the Associated Press reported. The company's shares fell 44 percent last year, leading to a drop in pay for senior investment bankers and traders by 20 to 30 percent, Bloomberg reported.
Citigroup's full-year profit increased 6.4 percent in 2011, the second year the company was profitable under CEO Vikram Pandit. Last year, when the bank's shares fell 44 percent, Pandit had a base salary of $1.75 million and a retention plan valued at more than $40 million, Bloomberg BusinessWeek reported. In July, he received the remaining $80 million of the $165 million from Citigroup's buyout in 2007 of his hedge fund, Old Lane Partners LP.
In December, Pandit announced Citigroup will lay off 4,500 employees, about 1.5 percent of its 267,000 employees, for which the bank took a $400 million charge in the fourth quarter.
Overall compensation for employees of the biggest Wall Street banks were predicted to sink 27 to 30 percent from a year ago to the lowest level since the 2008 financial crisis, executive consulting firm Options Group reported.
The group predicted the average global compensation would decline 33 percent in the investment banking sectors of fixed income, currencies and commodities, a 29 percent drop in the equities sector and a 14 percent fall in investment banking. According to a report released in late November the only sectors that were forecasted to have increases, in the single-digits, were private wealth management and electronic trading, the report stated.
Bankers' counterparts in East Asia took a hit, but not as deep as in the U.S. and Europe. Options Group forecasted compensation to decline 18 percent in Japan. In Asian countries other than Japan, compensation was forecasted to decline 19 percent.
Total equity grants value of three highest paid executives at JPMorgan Chase, Morgan Stanley, and Citigroup since Jan. 1, compared with a year ago:
JPMorgan Chase
1. James Dimon, Chairman & CEO: $20.4 million
Previous: $17.0 million
2. James Staley, Managing Director: $11.4 million
Previous: $14.5 million
3. Mary Erdoes, Managing Director: $10.5 million
Previous: $13.3 million
Morgan Stanley
1. James Gorman, CEO: $5.1 million
Previous: $7.4 million
2. Gregory Fleming, President, Asset Management: $3.4 million
Previous: $4.0 million
3. Paul Taubman, Co-President of International Securities: $3.4 million
Previous: $5.6 million
Citigroup
1. Vikram Pandit, CEO: $3.7 millionPrevious: 2011-2012 incentive award yet to be determined
2. John Havens, President & COO: $3.5 million
Previous: $4.8 million
3. Manuel Media-Mora, CEO, Global Consumer Banking: $2.6 million
Previous: $4.0 million
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