(Bloomberg News) Jamie Dimon, awarded $23 million for running JPMorgan Chase & Co. last year, earned 67 times the average amount set aside for his investment bankers and traders, the widest gap among firms that report divisional pay.
Dimon, 56, chief executive officer of the New York-based lender, was one of the few bank CEOs who avoided a pay cut for 2011. The ratio of his compensation to the average for all employees at JPMorgan's investment bank increased from 62 times the previous year. At Morgan Stanley, CEO James Gorman's award was $10.5 million, 25 percent less than for 2010 and 40 times that company's average of $264,996.
CEO pay in banking has dropped since peaking before the financial crisis, bringing the ratio at most firms to between 18-to-1 and 50-to-1 from some that topped 100-to-1 in 2006 and 2007. The ratios probably won't rebound to those levels in the next decade because of lower profits, said Alan Johnson, president of compensation consultant Johnson Associates Inc.
"Thirty to 50 times is probably unsustainably low for the industry, but that's somewhat consistent with the bummer of a year we had in 2011," said Johnson, whose firm is based in New York. "If it stays there, that's probably a really bad sign. It means the firms are still not doing very well."
SEC Pay Rule
The ratio gives a picture of the rebound in CEO compensation from 2008, when most leaders didn't take bonuses amid losses and government bailouts. That comes as lawmakers and regulators increase attention on the pay disparity between top executives and workers, and the Occupy Wall Street protests targeted income inequality.
The U.S. Securities and Exchange Commission is drafting a rule, mandated by the Dodd-Frank Act, that would force public companies to disclose the ratio of CEO compensation to median pay, the level at which half the employees are above and half below. The rule was pushed to address concerns about rising executive pay and income inequality.
Goldman Sachs Group Inc. CEO Lloyd Blankfein, 57, who set a Wall Street pay record in 2007, was awarded $12 million for 2011, a drop of 35 percent from a year earlier. That's 33 times the average amount of $367,057 set aside for all employees at the New York-based bank, down from 43 in 2010 and 104 in 2007. Gorman's ratio fell from the 179 times mark that predecessor John Mack set in 2005.
Josef Ackermann, 64, who will step down as CEO of Frankfurt-based Deutsche Bank AG next month, made 6.3 million euros ($8.3 million) or 48 times the average compensation costs, down from 51 last year and 83 in 2007. Credit Suisse AG CEO Brady Dougan's 2011 compensation of 5.82 million Swiss francs ($6.4 million) was 18 times the average pay per employee in his firm's investment bank, down from 33 for 2010.
Barclays Plc, based in London, and UBS AG got new CEOs in 2011, and the firms paid them more than their predecessors. While Barclays's Bob Diamond, 60, had his pay cut by almost a third to 6.3 million pounds ($10 million), his compensation was more than that of previous CEO John Varley. That increased the ratio to 31 times the average pay for Barclays Capital employees, from 17 in 2010.