Who are the Best Paid Bankers in the World? [INFOGRAPHIC]
In 2008, Citigroup, Merrill Lynch, and seven other U.S. banks paid out more than $32 billion in bonuses, while receiving $175 billion in taxpayer handouts. The decision sparked public outrage and, not surprisingly, details around bank executive bonuses continue to draw attention.
In some cases shareholders have retaliated against the fat pay cheques of banking moguls. In 2012, for example, Citigroup shareholders voted against then-CEO Vikram Pandit receiving a $15 million pay package for the fiscal year prior, when shares fell by 44 percent.
Despite shareholder revolts and changes in regulation, banking bonuses continue to run into the millions. However, when compared to leaders in private equity and hedge funds, banking CEOs might actually be getting a bit of a raw deal. This infographic by Firmex takes a closer look at the 2013 compensation packages for leaders in commercial banking, and where they fit in in the grand scheme of things.
Banking Bonuses of 2013: how do their compensation packages fare?
Following the 2008 global financial crisis, compensation rates on Wall St became heavily scrutinised. There was public outcry over the multi-million dollar paychecks awarded to executives whose companies had received government bailouts. In 2012, for example, Citigroup shareholders voted against then-CEO Vikram Pandit receiving a $15 million pay package for the fiscal year prior. So, six years on from the crisis, how do the compensation packages for banking CEOs fare?
Commercial Banking - USA
2013 was a good year for the leaders of America's top 6 banks. Four CEOs got a raise, and collectively their base salaries amounted to roughly $10.8 million.
- $20 million in 2013 (+74%) - Jamie Dimon, CEO JP Morgan Chase (2.39 trillion in assets): $1.5m base salary; $18.5m restricted stock; no cash bonus.
- $14 million in 2013 (+17%) - Brian Moynihan, CEO Bank of America (2.17 trillion in assets): $1.5m base salary; $12.5m restricted shares; no cash bonus.
- $14.5 million in 2013 (+26%) - Michael Corbat, CEO Citigroup Inc. (1.88 trillion in assets):$1.5m base salary; $3.78m deferred stock; annual incentive award of $13 million. Ranked no. 72 on the New York Times 100 Highest Paid CEOs.
- $19.3 million in 2013 (same as 2012) - John G. Stumpf, Chairman, President & CEO, Wells Fargo ($1.44 trillion in assets): $2.8m base salary; $12.5m in stock; $4m annual incentive award. The decline in Stumpf's compensation package was the result of there being no gains in the value of his pension last year. Regardless, he still ranked #22 on the New York Times 100 Highest Paid CEOs in 2013.
- $23 million in 2013 (+9.5%) - Lloyd C. Blankfein, CEO, Goldman Sachs ($1.04 trillion in assets): $2m base salary; $14.7m restricted stock; $6m cash bonus. Once again Blankfein took the crown as the highest paid chieftain among the U.S. banks. in 2012 his total compensation was $26, and in 2007 he set a Wall Street record with $68.5m.
- $6.56 million in 2013 (so far) - James Gorman, CEO, Morgan Stanley ($347 billion in assets): $1.5m base salary (88% raise); $5.06m stock bonus; cash bonus & long-term incentives: undisclosed). No news yet on Gorman's full 2013 pay package, but in 2012 it was around $15 million. Mr Gorman ranked #97 on the New York Times 100 Highest Paid CEOs in 2013.
Commercial Banking - United Kingdom
Despite Antony Jenkins (Barclays) & Ross McEwant (RBS) turning down their bonuses for a second year running, 2013 wasn't a total disappointment. Collectively, the base salaries for CEOs from the Top 4 banks still totaled £6.55m (US$ 10.89m).
- £8 million in 2013 (+70) - Stuart Gulliver, CEO, HSBC Holdings ($2.671 trillion in assets): $1.25m basic salary; 1.8m bonus; £3.7m in long-term incentives; £1.7m pay allowances (awarded quarterly). Adding extra allowances to Mr. Gulliver's salary was seen as a way to circumvent the EU's new bonus cap rules - which restrict bonuses to 200 percent of salary. Mr Gulliver is the highest earning banker in the country.
- £5.1 million in 2013 - Antony Jenkins, CEO, Barclays (£2.42 trillion in assets): £1.1m base salary; £4m worth of shares. In 2013, Jenkins turned down his bonus for a second year after a series of regulatory penalties and litigation plagued the bank. Jenkins could have been offered as much as £2.7m, in addition to his base salary. However, while declining his bonus, Mr Jenkins could still receive shares valued around £4m as part of his long-term incentive scheme.
- £1.4 million (2012 figures) - Ross McEwant, CEO, Royal Bank of Scotland ($1.98 trillion in assets): £1m base salary; £26,250 in benefits; £250,000 in pension contributions; shares under long-term incentive plan. When he was appointed to Chief Executive in August 2013, McEwan said he would not take an annual bonus for 2013 or 2014. The British Government owns 81% of shares in RBS following its £45 billion bailout in 2008. RBS anticipates to return private ownership within 3-5 years.
- £1.4 million in 2013 - Antonio Horta-Osorio, CEO, Lloyds Banking Group ($1.357 trillion in assets): £3.2m base salary; £1.7m in share awards (deferred for 5 years). The government currently own a 25% stake in Lloyds. The bank is expected to return to private ownership over the next 12 months.
Most private equity "compensation" doesn't come from a base salary, but a wide range of sources. Founders not only have shares they own and may sell, they also have personal stakes in individual funds, on which they earn a "carry", or a sizeable portion of the fund's profits. On average, private equity compensation was estimated to rise up to 10 percent in 2013, according to compensation consultancy Johnson & Associates. But for an elite few it was much more.
Collectively, the 9 founders of publicly traded PE firms made $2.6 billion in 2013. That's more than the GDP of Saint Lucia!
- $546.3 million in 2013 (+200%) - Leon Black, Co-founder & Chief Executive, Apollo Global Management: $273,053 base salary; $369m from annual dividends. Mr Black earned the most by a single executive of a publicly traded PE firm in 2013. He rewarded himself by purchasing Edvard Munch's The Scream for $120m.
- $396.7 million in 2013 - Josh Harris, Co-Founder, Apollo Global Management
- $365.8 million in 2013 - Marc Rowan, Co-Founder, Apollo Global Management
- $345.68 million in 2013 - Bill Conway Jr, Co-Founder, Carlyle Group: $281,375 base salary; $92.6m in dividends; $252.8m from investments. After reviewing 2,500 public suggestions, Mr. Conway announced that he will invest $1 billion in promised philanthrophy to improve the Washington, D.C. area by supporting education efforts for low-income students.
- $202.38 million in 2013 - Daniel D'Aniello, Co-Founder, Carlyle Group: $281,375 base salary; $92.6m in dividends; $109.5m investments. Mr D'Aniello serves as chairman and runs the day-to-day operations of the Carlyle Group. The company is named after New York City's Carlyle Hotel, where many of its deals were hashed out in its early years.
- $200.98 million in 2013 - David Rubenstein, Co-Founder, Carlyle Group: $281,375 base salary; $92.6m in dividends; $108.1m investments. In 2013, Mr Rubenstein paid $14.2 million at a Sotheby's auction for what is supposedly the oldest printed work in America, a book of psalms called the Bay Psalm Book.
- $165.5 million in 2013 (+17%) - George Roberts, Co-Founder: $300,000 base salary; $43m in carried interest; $121.4m from dividend payments. In 1989, KKR orchestrated the $25 billion buyout of RJR Nabisco; the deal became the basis of the bestselling book "Barbarians at the Gate".
- $161.4 million in 2013 (+17%) - Henry Kravis, Co-Founder, Kohlberg, Kravis & Roberts: $300,000 base salary; $43m in carried interest; $117.2m from dividend payments. The two founders of KKR enjoyed their largest paycheck since the company went public in 2010. Both men have donated a significant amount of money to their former school, Claremont McKenna College. Henry Kravis recently donated $50m.
- $2 billion in 2013 (second best year ever) - George Soros, Chairman, Soros Fund Management ($2.39 trillion in assets): Soros Fund Management had returns north of 22% in 2013.
- $3.5 billion in 2013 - David Tepper, Founder, Appaloosa Management ($20 billion in assets): Tepper outperformed the U.S. stock market and the vasst majority of hedge fund managers, with his biggest fund posting net returns of more than 42%.
- $2.3 billion in 2013 - Steve Cohen, Founder, SAC Capital Advisors ($15 billion in assets): SAC Capital Advisors had net returns of around 19%, however, pleaded guilty to criminal insider trading and agreed to pay $1.8bn in fines and penalties to the federal government. In 2014 its name changed to Point72.
- 1.9 billion in 2013 - John Paulson, Founder, Paulson & Co. ($20 billion in assets): Paulson's $2.7 billion Recovery Fund posted net returns of 63%, Paulson Enhanced funds returned 33%, and the Advantage funds generated net returns north of 25%. Paulson rewarded himself by acquiring Steinway Pianos.
- $1.7 billion in 2013 - Carl Icahn, Chairman, Icahn Enterprises ($25 billion in assets): Icahn was everywhere in 2013, battling Michael Dll, helping push out Aubrey McClendon from Chesapeake Energy, making a killer trade with Netflix, and loudly lobbying for Apple to repurchase more of its stock. In the end, his investment fund returned 31%.
There are now 46 billionaires in the world who have derived their fortune from managing hedge funds, trading everything from stocks to bonds, options, currencies, mortgages & derivatives.
The top 5 hedge fund managers of 2013 collectively earned $13.6 billion. That's enough to buy an island in the Bahamas... 34 times!
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