Crisis? What Crisis? Average Bank Pay Kept Rising at the Same Rate

Crisis? What Crisis? Average Bank Pay Kept Rising at the Same Rate

by Marian Wang ProPublica

A number of reports on executive pay are out this week, including one on how bank pay seems to have been immune to the recession and unaffected by the bailouts.

According to report yesterday in American Banker, even while the economy took a beating and unemployment soared, average pay in the banking industry continued rising at the same rate as it had before the financial crisis [1]:

The clear trend, in both nominal and absolute terms, is up: Over the last eight years, average compensation for a full-time bank employee has risen 35% to $83,050, twice the rate of inflation. In 2003, the banking industry’s 1.3 million full-time employees took home $78.3 billion. In 2010, its 2.1 million employees took home $168.1 billion.

In the first half of that period, raises were to be expected given climbing industry profitability and bank equity’s market gains. But the financial crisis appears to have had little impact on pay. Total compensation per full-time employee rose at the same pace from 2007 to 2010 as it did from 2004 to 2007. In the later time period, profitability plunged and the KBW bank index fell by more than 50%.

Keep in mind that the point here is the trend, not the actual average. The figure mixes the modest wages of bank tellers with the big bonuses for top execs and investment bankers. The New York Times noted last year that within investment banks, average pay was solidly in the six figures [2].

CEOs, of course, are still pulling in millions. Bank of America made headlines this week for what seemed to be a cut to CEO Brian Moynihan’s compensation. But the $1.94 million he’s reported to have taken home in 2010 doesn’t include [3] the more than $9 million in deferred compensation that he’s due to receive this year.

The high pay isn’t limited to Wall Street bankers. A government watchdog report released yesterday [4] [PDF] noted that the now government-controlled Fannie Mae and Freddie Mac paid their CEOs a total of $17 million in 2009 and 2010. The report faulted regulators for failing to scrutinize the mortgage giants’ lavish compensation.

The Wall Street Journal also reported this week that several Wall Street firms are backing a proposal to give shareholders an annual vote on compensation, though such votes are mostly symbolic. [5] And then there’s the matter of the corporate boards that actually set compensation: The SEC is working on finalizing rules that would require disclosure of conflicts of interest [6] for board members and compensation consultants.

The Federal Reserve and other regulators have also proposed a rule that would require top execs at big Wall Street banks to have some compensation deferred. The idea is to rein in the incentive to take risks [7].

Follow on Twitter: @mariancw [8]

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Comments
5 Responses to “Crisis? What Crisis? Average Bank Pay Kept Rising at the Same Rate”
  1. angry & NOT TAKING IT says:

    btw.. coming to a new GOV near you – the fed will be ended & in its place a BRAND NEW MONSTER!
    you watch… its written in the cards now.

  2. boots says:

    the economy is so bad that we need to discover another planet to live free from any govt. corruption. only the Bank and and the foreclosure mills and debt collectors earned a lot of money on this foreclosure fraud. GAME IS OVER.

    NEXT YEAR WISH THERE WILL BE A CRIMINAL PROSECUTION AGAINST THOSE WHO ATTACK OUR ECONOMY. FINANCIAL TERRORIST.

  3. david black says:

    Until the AGS start throwing these bank pigs in jail we are going to see this same kind of arrogant behavior. they all think they are untouchable. oh by the way

    the banks pay the salaries for bill walsh and staff at the occ not the federal budget.

    when we all wake up the whole world will be just one corrupt bank.

    but we are waking to this crap hole that has been this american national banking system for the last fifty years.

    cant run a country with a corrput banking system that self regulates itself and thinks it is above the law and no one can touch them and they can buy off everyone. and I mean everyone.

    best regards
    David B.

  4. Fury says:

    Bernanke, Elizabeth Coleman, and Geithner
    should all resign NOW!

    or better yet,
    END THE CORRUPT FED!

    • angry & NOT TAKING IT says:

      resign my ass… arrested for treason & financial terrorism.. then tried for crime against the republic!!!

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