What a year 2011 was for Jamie Dimon and other top bank execs. Last year, Dimon took home $ 23.1 million in compensation, an 11 percent increase from the previous year, the company noted in a public filing.
Meanwhile, James P. Gorman, Morgan Stanley‘s chief executive, took home a $10.5 million pay package in a year in which his firm’s stock price dropped about 44 percent. (His compensation for 2011 was 25 percent lower than for the previous year, the bank noted).
As for Dimon, his compensation included $143,277, primarily for personal use of aircraft and cars. That was down from $579,624 in 2010 when he was also reimbursed for $421,458 in moving expenses.
In his annual letter to shareholders Dimon noted that the company earned a record $19bn in 2011, up 9% from $17.4bn in 2010, while return on equity remained flat at 15%.
Dimon wrote: “On an absolute and static basis, we believe that our earnings should be $23bn and $24bn. The main reason for the difference between what we are earning and what we should be earning continues to be high costs and losses in mortgage and mortgage-related issues. While these losses are increasingly less severe, they will still persist at elevated levels for a while longer.” According to Thomson Reuters, Dimon's pay was higher than that of chiefs of the other three banks which have more $1 trillion in assets. At Wells Fargo & Co, the fourth biggest bank, CEO John Stumpf received $19.8 million, up about 5 percent from 2010.
Coming up third, but with the biggest raise of all, was Citigroup Inc CEO Vikram Pandit. He received $14.9 million last year -- up from a nominal one dollar in 2010.
It was also a good year for Bank of America CEO Brian Moynihan, who received $8.1 million, more than four times as much as he received in 2010.
Overall, the recession has failed to shrink executive compensation, despite an initial outcry from investors. In fact. only 38 of the largest 3,000 companies had their executive pay plans voted down, and even then, the votes are nonbinding, the New York Times reported last year.
The splendid pay packages received by top bank executives lead two researchers at the National Bureau of Economic Research, a few years ago, to trace the paychecks of Wall Street executives over the last century.
Their conclusion? Financiers are…Overpaid.
The authors of the study, Thomas Philippon and Ariell Reshef, even put a number on it. They calculated that “30 to 50 percent of wage differentials” - the difference between an average worker’s income and that of a Wall Street financier — is the result of overpayment and “can be expected to disappear.”
Somehow, I don’t think Jamie Dimon or any of the other top execs on Wall Street today will be fretting just yet.