The bosses of the six largest US banks made $150 million last year

Executive perks.
Executive perks.
Image: REUTERS/Aaron P. Bernstein
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Oh, to have the deep pockets of a bank CEO.

Last year, Jamie Dimon of JPMorgan, James Gorman of Morgan Stanley, Brian Moynihan of Bank of America, Michael Corbat of Citigroup, David Soloman of Goldman Sachs, and Tim Sloan of Wells Fargo collectively made $151.9 million in salary and bonuses. Altogether, that is an 8% increase on 2017.

If you squint really hard, you can make these eye-watering amounts seem small. The six banks made a collective $119 billion in profit in 2018, so the CEOs took home just 0.1% of that. On average, the CEOs received a quadruple-the-rate-of-inflation raise last year.

This, naturally, invites scrutiny. Take Sloan, the CEO of Wells Fargo. He made $18.4 million in 2018, which amounts to 283 times the median pay of other staff at the bank. The amount is made up of $2.4 million in base salary, a $2 million bonus and $14 million in long-term performance-based shares. Even though Sloan’s base salary was unchanged, and his stock award was $1 million less than the previous year, he took home 4.5% more than the year before thanks to the bonus, which he didn’t received in 2016 and 2017.  Wells Fargo generated a profit of $22.4 billion last year, up on $22.2 billion the year before. “Under Mr Sloan’s leadership, the company had strong financial results and made steady progress against key goals, including risk management,” the company said in a financial filing (pdf).

The details of Sloan’s pay came out a day after he testified to a US congressional committee about Wells Fargo’s company culture and corporate governance. Lawmakers quizzed the CEO on what had changed since the 2016 scandal in which it was revealed that the bank had created millions of fake accounts and charged customers fees for services they never ordered. Sloan took the helm after the scandal became public.

Not all are convinced that Wells Fargo has turned things around. The Federal Reserve extended a cap on the bank’s growth (paywall) earlier this year, making it so it can’t grow larger than $2 trillion in assets. In response to Sloan’s pay rise, the Fed weighed in—which is unusual for the tight-lipped central bank—and a spokesperson told Reuters, “The Federal Reserve does not approve pay packages. We expect boards of directors to hold management accountable.” Meanwhile, the Office of the Comptroller of the Currency said it was disappointed in the progress Wells Fargo had made, especially when it came to corporate governance.

For what it’s worth, Sloan’s 2018 pay package was smaller than his big-bank counterparts—in absolute terms, as well as a share of profit—as was his raise. Bank of America’s Moynihan got the biggest raise—15%—but JPMorgan’s Dimon remains the highest paid, making $31 million last year. The amount seems slightly less garish when you consider that JPMorgan made the biggest profit among the banks, at $32.5 billion (pdf). Slightly.