Bank CEOs: The Men Behind the Billions

From 7-figure paydays to billion-dollar losses: Meet America's big bank CEOs.

ByABC News
February 10, 2009, 6:14 PM

Feb. 11, 2009— -- The eight bank chief executives who will testify before Congress today will explain how they have used money from the government's Troubled Asset Relief Program, or TARP.

The executives have spurred their share of headlines in recent months for everything from defending their banks' spending practices to forgoing their multimillion-dollar bonuses, as at least seven bank CEOs have done so far.

Below, a look at the eight men, their compensation and the financial firms they run. Compensation totals, which are courtesy of James F. Reda and Associates, do not include retirement investments and other deferred compensation.

John J. Mack, chairman and chief executive officer, Morgan Stanley
2007 Compensation: Salary of $800,000 plus $40.2 million in stock awards.
Morgan Stanley TARP Funding:$10 billion

Morgan Stanley CEO John Mack and two other top Morgan executives will forgo their 2008 bonuses, but that didn't stop protesters from descending on Mack's New York home Monday morning.

Neighborhood Assistance Corp. of America demonstrated outside Mack's Rye, N.Y., home, calling for home-loan modifications with signs bearing messages such as "Fix our loans, save our homes." NACA also held a protest at the Greenwich, Conn., home of the chief executive of the smaller financial firm Greenwich Financial Services.

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NACA head Bruce Marks told The Associated Press that he blamed Mack for opposing loan modifications that would help homeowners avoid foreclosures.

Morgan Stanley, which received $10 billion in TARP investments, told the AP that its mortgage-servicing business "actively collaborates" with NACA to structure solutions for qualified borrowers so they can remain in their homes.

While it's unclear exactly how Morgan will spend its TARP funds -- the firm told ABC News last month that the government money "has allowed Morgan Stanley to make several multibillion-dollar loan commitments to leading American companies" -- Mack hopes to start paying the government back this year.

"We're waiting for the capital markets to open again," Mack said during a special shareholders meeting, the Dow Jones Newswires reported Tuesday. "Our intent is to pay it off as soon as it is feasible."

Morgan Stanley was once a part of the powerhouse quintet that included the country's four other top brokerage firms: Bear Stearns, Goldman Sachs, Lehman Brothers and Merrill Lynch. Of the five, Morgan and Goldman were the only firms to avoid bankruptcy or a buyout, but barely -- both became bank-holding companies in the fall in order to qualify for TARP funds. The move brought stability to the firms but also opened them up to more government regulation.

Mack, 64, a 30-year veteran of Morgan Stanley, is forgoing his bonus for the second consecutive year.

Wells Fargo TARP Funding:$25 billion

When news broke earlier this month that Wells Fargo would hold a Las Vegas retreat for its top mortgage lenders, critics were aghast, wondering how the bank could justify such a lavish expense after receiving a $25 billion investment from the federal government.

Though Wells Fargo ultimately decided to cancel the Vegas event, Stumpf, 54, who has led the bank since 2007, also fired back.

"The problem is many media stories on this subject have been deliberately misleading. These one-sided stories lead you to believe every employee recognition event is a junket, a boondoggle, a waste or that it's for highly paid executives. Nonsense!" Stumpf wrote in full-page advertisements in The New York Times and The Washington Post Sunday.

Stumpf, a 24-year veteran of the company, said Wells Fargo was canceling all its major annual recognition events -- a move, he argued, that would hurt everyone from bank tellers to credit analysts to the hospitality industry that services the events.

Unlike CEOs of the other major banks, Stumpf, who received a $4.2 million bonus in 2007, has not said whether he will forgo his 2008 bonus. A Wells Fargo representative said the bank's board of directors would vote on bonuses at the end of this month.

Wells Fargo touted its use of TARP funds last week, announcing that it was paying the United States a total quarterly dividend of $371.5 million on its $25 billion TARP investment. The bank said that since receiving TARP money, it has committed more than $70 million to mortgages and other loans.

Not all is well at Wells, however. Wells Fargo appeared to have scored a coup when it beat out rival Citigroup to purchase Wachovia bank in October, but the $2.8 billion losses related to the Wachovia purchase that Wells reported late last year far exceeded what analysts were expecting.

Citigroup TARP Funding: $45 billion

One thing is for sure: Pandit did not arrive in Washington for today's hearings aboard a new corporate jet.

The Citigroup CEO came under particularly harsh criticism from lawmakers who have routinely chastised bank executives for bonuses and other corporate perks rather than programs to help Americans burdened by the credit crunch.

Citigroup last month reversed a decision to buy a $50 million corporate jet under pressure from the government.

In the fall, the federal government bailed out Citigroup as the world's largest bank facing bankruptcy.

The bank received $45 billion as part of the federal bailout and has said it plans to lend $36.4 billion to consumers and companies, as well as fund U.S. mortgage loans.

Pandit, 52, said in a recent report in which the bank outlined how it planned to spend TARP money that Citigroup had an "an obligation to repay in ways that go well beyond the $3.41 billion Citigroup will pay the government each year in dividends associated with its TARP investment, and a separate loss-sharing agreement."

According to draft testimony published by Bloomberg News Tuesday, Pandit plans to tell Congress that he has "removed people responsible for Citi's financial distress" and installed new risk-management controls.

In the draft Pandit said that he plans to "make this a profitable investment for the American people" and that the bank will support "American businesses and helping families stay in their homes."

Pandit was named CEO in December 2007, the preferred choice of then-interim chairman Robert Rubin, who currently serves in the Obama administration as an economic adviser.

Though his compensation exceeded $40 million in 2007, Pandit, like many of the CEOs whose firms received an emergency bailout, forwent a bonus in 2008.

Bank of America TARP Funding:$45 billion, including $10 billion allocated to Merrill Lynch.

None of the CEOs appearing before Congress today are in an enviable position, but perhaps the most embattled of them all is Lewis, the chairman and chief executive of Bank of America.

In the run-up to his visit to the nation's capital, Lewis is squelching rumors that Bank of America is at risk of being nationalized and fending off calls that he step down. Like many major bank CEOs, Lewis is forgoing his 2008 bonus.

Last week Lewis, 60, told CNBC that Bank of America would not need additional federal funding and still believes its acquisition of brokerage Merrill Lynch & Co. was the right move.

The already gigantic bank grew even larger in the fall when Lewis, the bank's CEO since 2001, spearheaded the $50 billion buyout of struggling brokerage icon Merrill Lynch. By that time, both Bank of America and Merrill Lynch had been cleared to receive multibillion-dollar investments from the government's Troubled Asset Relief Program -- $15 billion and $10 billion, respectively.

Lewis initially praised Merrill's CEO, John Thain, whom he named to the bank's management team. But the corporate marriage showed serious signs of strain last month when Merrill revealed $15 billion in losses and the U.S. Treasury extended an additional $25 billion to Bank of America to help cushion the blow.

Things at the bank grew even more grim after news broke that Thain rushed out billions in bonuses to Merrill employees before Bank of America's acquisition was complete. Thain resigned Jan. 22, and now Lewis is under fire for what critics say was a failure to perform due diligence before forging ahead on the Bank of America deal.

JPMorgan TARP Funding: $25 billion

In early 2008, as the fissures in the financial system first started to show and banks began to collapse, Dimon, CEO of JP Morgan Chase and one of the toughest negotiators on Wall Street, saw an opportunity.

When Bear Stearns faced bankruptcy in March 2008, Dimon struck a deal to buy Bear for $2 a share -- later increased to $10 a share, a tenth of its closing price.

As Dimon, 53, closed the Bear deal that spring, he began to eye Washington Mutual, a teetering giant brought to its knees by bad mortgages. By September 2008, after a summer of plummeting house prices, the savings and loan giant was seized by federal regulators, resulting in the largest bank failure in U.S. history.

JPMorgan Chase paid $1.9 billion in an emergency sale of WaMu, taking over the troubled bank's bad mortgages and credit card loans and assuming $31 billion in loses that would have otherwise been paid by taxpayers. In doing so, JP Morgan Chase took over WaMu's hundreds of bank branches, leaving Chase with the second largest nationwide franchise.

Dimon has been vocal about holding governments to task for the economic meltdown, but his spending has also come under scrutiny: Dimon ran up a $211,182 tab for private jet travel last year, when his family lived in Chicago and he was commuting to New York.

Bowing to public and political pressure, Dimon, like many of the CEOs whose companies were benefactors of the government bailout, agreed not to receive a bonus last year.

JP Morgan Chase has received $25 billion in TARP money, but would not reply to ABC News' questions last month about how those taxpayer dollars were being spent.

Earlier this month, Dimon was the only head of a U.S. bank to attend the annual World Economic Forum, which brings together executives and policymakers in Davos, Switzerland.

He said financial institutions needed to accept some responsibility for the crisis, but he put much of the blame on regulators.

"JPMorgan would be fine if we stopped talking about the damn nationalization of banks. We've got plenty of capital. To policymakers, I say where were they?" he said during the conference. "They approved all these banks. Now they're beating up on everyone, saying, 'look at all these mistakes, and we're going to come and fix it.'"

Goldman Sachs TARP Funding: $10 billion

Goldman Sachs, Wall Street's perennial winner, first appeared to weather the storms of the credit crisis but ultimately could not withstand the turmoil that rocked the financial system.

In 2006, Goldman Sachs turned a $9.4 billion profit, the highest in Wall Street history.

Blankfein, 58, took the reins of the company that same year, replacing Hank Paulson, who became treasury secretary in the Bush administration.

Two years later, on the heels of the collapse of Lehman Brothers and AIG, Goldman laid off more than 10 percent of its work force, received $10 billion in government aid from TARP and redefined the corporate culture that led to much of its success.

Blankfein and six other Goldman Sachs executives will also forgo their 2008 bonuses.

In an Op-Ed in Monday's Financial Times, Blankfein struck a contrite tone and called on banks to adopt stricter accounting practices, allow for greater government regulation and more accurately disclose the actual value of their assets.

"People are understandably angry and our industry has to account for its role in what has transpired," he wrote.

"In this vein, all pools of capital that depend on the smooth functioning of the financial system and are large enough to be a burden on it in a crisis should be subject to some degree of regulation."

Before becoming CEO, Blankfein led Goldman's securities division, pushing a strategy that called for diversified investments in businesses as varied as power plants and Japanese banks.

As panic over the credit crisis spread, Blankfein was credited with quickly transforming the company into a deposit-taking bank holding company, which allowed the company to receive TARP funding.

Bank of New York Mellon TARP Funding: $3 billion

The Bank of New York Mellon is both a recipient of TARP funds and the custodian of the money, accounting for how the government allots money to each of the banks receiving emergency aid.

Kelly, 54, is forgoing his 2008 bonus, according to a bank representative. But like many of the other executives who run banks that have received funding, he has come under increased scrutiny for a large salary and corporate perks that some argue are being bought with taxpayers' dollars.

Kelly's stipend for financial planning services came to $66,748 in 2007, on top of his multimillion-dollar bonus and nearly $1 million salary. His car and driver cost $178,879 and he received $846,000 in relocation expenses, including help selling his home in Pittsburgh and purchasing one in Manhattan, the company told the AP.

BNY Mellon will receive $3 billion in TARP aid and earn an additional $20 million to provide accounting, record keeping and administrative services to help the Treasury Department monitor how the money is being allocated.

Of the 15 companies hired by the government to handle accounting and administrative work, BNY Mellon received the largest contract.

Kelly became CEO of the bank in 2007, when Mellon merged with the Bank of New York.

State Street Corp. TARP Funding: $2 billion

Amid major investment losses and slashed dividends, Logue joined other banking executives in rejecting bonus pay.

Las week, Logue announced that he and four other State Street executives would forgo their 2008 bonuses and that bonuses for the rest of the company would be cut in half.

"Given that we are asking our shareholders to make sacrifices through dividend reductions, we believe that we must also be willing to make our own sacrifices," Logue said in a statement last week.

Of the nine major financial institutions that were first on the list for TARP funding, State Street Bank has the distinction of receiving the smallest investment -- $ 2 billion. But like its peers, State Street has been hit hard by the financial crisis, posting billions in losses late last year.

Logue, 60, joined State Street in 1990 as a senior vice president. He served as chief operating officer and president before being named CEO in 2004.

ABC News' Matt Jaffe and Reynolds Holding contributed to this report.