Bankers Enjoy Rewards But Run Risks as Pay Jumps
Ken Feinberg on the Role of Corporate Governance in Regulating Executive Compensation
Succession Planning Becomes Job No. 1 for Bank Boards
Ken Feinberg on How Banks Can Protect Against a Pay Backlash
Ken Feinberg on Risks Banks Face from Rising Executive Pay
Bank bosses enjoyed nifty bonuses in fiscal 2011, even as their stocks languished. Those trends typify the balancing act that banks and their boards face in setting pay.
The former Tarp special master calls for a "sea change" in how banks and other corporations determine pay.
"There probably isn't a hotter topic in financial services today" than who will take over when the boss steps down. So says Korn/Ferry International's Eric Pikus.
The former Tarp pay master urges banks to head off anger over executive compensation by voluntarily complying with pay standards laid out by regulators.
Banks that guarantee paydays ought to beware of a political and regulatory backlash. So warns the former executive compensation overseer for the Troubled Asset Relief Program.
Median pay for CEOs at banks with less than $20 billion of assets was less than a tenth of the median amount for bosses at banks with more than $100 billion of assets in American Banker's 2012 compensation survey. Growth in pay from 2010 was roughly parallel between the two groups, however. Here are some of the most richly rewarded chiefs among the smaller banks. Pay data and ratings of the banks' pay practices are provided by GMI Ratings, a governance watchdog. Figures are for 2011.
Base salary: $1M
Total compensation: $8.9M
Change from 2010: 310%
Company ROAA: 0.6%
Total return on company stock: 19%
GMI compensation risk rating: High concern Top executives eligible for discretionary cash bonuses, "which undermines a pay-for-performance philosophy"