Wall Street Journal
Big-bank CEOs still make plenty of dough but the job's not as lucrative as it used to be. Pay for the top bananas at the five largest Wall Street firms "remained well below pre-crisis levels" at a collective $92.5 million last year, the paper reports, down 47% from pooled earnings of $173.6 million in 2006. Meanwhile, the average bank employee's paycheck reached a new high of $148,740 last year. "The dichotomy shows that CEOs are bearing a significant amount of the regulatory and shareholder backlash that has hit Wall Street since the financial crisis, while rank-and-file employees that survived rounds of layoffs have seen their paychecks recover," according to the paper. These numbers hold increased significance in light of a forthcoming Securities and Exchange Commission rule that will require public companies to disclose the pay differential between CEOs and the average employee.
The boards of the country's largest banks may have to put shareholder interests on the back burner in order to appease regulators who want directors to take more responsibility for compliance and risk management, according to John Carney of "Heard on the Street." Carney points out that improved risk monitoring should work to the benefit of shareholders in the long run, but that may be tough for investors to remember in the face of disappointing returns. Commenter George Powell seems to prove his point: "Any more of a back seat, and the stockholders will be riding on the rear bumper," he writes. "I'm not investing in the big banks anymore."
New York Times
Congress should broaden the penalties the Securities and Exchange Commission can seek against financial firms, according to Gretchen Morgenson's latest column. She says this would enable the SEC to do a better job of protecting investors. Right now, the law requires the SEC to base the amount of its penalties on the financial gain experienced by the alleged wrongdoer, as opposed to the losses suffered by investors as a result of the firm's misdeeds. Morgenson suggests this policy lets firms off easy. "Isn't it time to ensure that when the S.E.C. comes knocking, the fine fits the crime?"
How can rabbinical studies shed light on the world of Wall Street? There may be no one more qualified to answer that question than Donald Meltzer, a former co-head of global M&A at Credit Suisse who left investment banking in 2010 and became a scholar at New York University's Tikvah Center for Law and Jewish Civilization. Now Meltzer is returning to the fold at Dutch cooperative bank Rabobank, but not without wisdom gleaned from his research. "In the Jewish moral code, there is a sense of limit, there is a certain amount of gain and a certain amount of profit that is appropriate, but there comes a point where what is good for the community as a whole is the overarching principle," he tells the paper. "What I found is on Wall Street, there is no limit on what the appropriate profit is. The objective is: The more profit, the better."