The mere thought of it is enough to induce euphoria among the compensation lawmakers of the world, and make Stan O’Neal spontaneously combust. You finally make it to the top of the corporate ladder at one of the biggest financial services organizations on the planet and for all your rainmaking efforts, your career justifying payday comes in at the handsome sum of a bit over $200k. China may have the world’s two largest banks by market cap but they are light years behind the competition when it comes to embarrassing pay packages at the top.
China, for example, boasts three of the world’s four biggest banks, yet the leaders of those banks — Industrial and Commercial Bank of China, China Construction Bank Corp and Bank of China — are among the lowest paid of those surveyed by Reuters. The chairman and the president of each of the banks are paid roughly $230,000 per year.
So that’s it then. The Chinese have found the executive compensation reform holy grail. What clever model should the US rush to embrace to simultaneously end the public outcry and create a legion of capable, responsible, humble bank heads?
The Chinese banks, which are state-controlled, are typically led by bureaucrats appointed by the central government, and executive pay is capped.
On second thought, maybe $19 mil or so for Jamie Dimon isn’t such a bad deal.
Study shows U.S. bank CEO pay dwarfs rest of world [Reuters]
Greg, you wanna taste my choco taco?
-M. Waters
Greg, did Gorbacov fuck your mother?
-JD
How much does a Chinese basket typically cost?
Greg your lack of knowledge on business governance amazes me. What’s wrong with having majority state-owned banks (which is a model many countries adopt due to governance issues and financial regulations) appoint leaders via mandate by the government? Hell, you can take your argument further and chastise the U.S. for not privitizing the roles of Ben Bernanke and Geitner.
Those state owned banks happen to be far more profitable than U.S. counterparts, in part thanks to our ridiculous executive pay packages (e.g. Stan “punch me in the face” O’Neal’s $160M pay package for running Merrill into the ground). In the future, please learn a thing or two about life before making your asinine opinions.
@4, it’s okay, don’t be angry. reading greg’s posts reminds me of the time i had to babysit a blind kid with down-syndrome. we need to be understanding of his disabilities.
the perks afforded by the bank and the state are priceless. don’t forget – it’s a capitalism runing by socialism…
Do realize how many happy endings $230K /yr buys in China?!
Greg, I’m going to privatize your mouth and socialize your ass.
-Jeff Macke
yeah and how much do they get under the table and in sweetheart real estate deals, tax free…
Greg – Hot lead: New York State Department of Taxation and Finance Acting Commissioner Jamie Woodward recently announced the arrest of 21 cigarette bootleggers who were major suppliers of the New York City cigarette black market.
Reading these posts invokes a feeling of panic and despair. Is this what waterboarding feels like?
@4
Do you have any idea what you’re talking about? How many politicians do you know of that have even the slightest clue how to run a bank? Name one of their attempts at intervention (see: GSEs) that isn’t, or hasn’t been a complete clusterf*ck of Cayne-ish magnitude?
@12, I actually do, having done business in the financial institutions space in China for many years. These bank heads are not politicians — they are industry veterans in banking and finance and are simply appointed by the government through a meritocratic process.
Clearly you and Greg share the same level of ignorance.
@4, might add that state employee Hank Paulson got to sell his GS shares sans cap gains–in effect a cash payment from the Feds worth tens of $MM.
The problem with comp wasn’t that O’Neal et al were paid too much on an absolute scale, it’s that there weren’t lockups, clawbacks, or restricted earnings accounts to ensure a focus on LT greed.
ML’s board should have followed Mortimer Duke’s hiring advice anyway…
Actually, retail banking in Asia is simplified by the lack of competition. Usually interest rates are regulated so banks can’t compete on price. Getting a banking license is an opportunity to participate in an oligopoly with fixed prices. The Banks just have to take the spread between home loans and deposit rates to make money.
Unfortunately, I think that China has it right in this instance.
CEO’s of public institutions, including financial, should have their compensation capped at X* times the amount of their employees average salary. That way, if they want more pay, they need to increase the wages of the people that keep their corporate wheels spinning.
*X being something reasonable like 10 or 20.
Do you really think JD deserves 19mm/year? That’s ridiculous.
Abylkasym Mamyrbekov, ex-deputy chief executive of Alliance Bank, is accused of using deceptive accounting practices to shift 1.1 billion dollars (744 million euros) into privately held offshore bank accounts.
How exactly could the #2 in charge of the fourth largest lender in Kazakhstan get away with a ten-figure heist? Surely the guy in charge must have been keeping a watchful eye over his empire to guide it through the crisis.
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Plus an earlier dealbreaker post tells you why to pay the #1
@8
can you explain further? you lost me.
@16
While I think some executive comp is utterly insane, your suggestion is even more so. I didn’t know you SEIU members knew how to use teh interwebs, so imagine my shock to see your comment here!
@16, so basically you’d then be incentivized to hire a bunch of relatives who don’t work, pay them too much, and loot the shareholders, correct?
I think I prefer paying in restricted stock.
And yes, if I owned 100% of JPM stock, I’d be willing to pay $19 MM for the difference between J. Dimon and, say, C. Prince or S. O’neal. Several billion, actually.
how many of you come here just to heckle the bloggers? because I come here just to read you heckle the bloggers.
Greg, you can’t compare apple to orange.The 230k maybe a small pay in dollar term in US but in China it’s huge considering the buying power of Yuan there.If you convert $$ to CYN that’s more than a million CYN.Get the math?
@11 no, it’s a lot more orgasmic than you think.
@23
How orgasmic could it be? Better than child porn on your Chinese-built Iphone?