Hey, so, if you work at a bank, you may have heard about this, not sure, but your comp will be down. Just a bit. Unless you’re a junior mistmaker Chez Dimon. But otherwise, yeah. Down.
Another thing you may be less aware of is that some people are actually not so unhappy about that. A few of them even think that it’s possible that your pay should be down some more. And they think someone should really look into that:
Giant firms are expected to cut executive pay by some 30% from 2010 levels, consultants say. And since the financial crisis of 2008, firms have reduced cash bonuses, increased their use of company stock and added clauses that allow them to recoup—or “claw back”—pay in certain circumstances.
Even so, some investors want more changes. In December, the Nathan Cummings Foundation—a private charitable organization and institutional shareholder—filed proposals asking that directors at Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. address potential reputational damage that big pay packages could bring to the banks, said Laura Campos, director of shareholder activities at the foundation. The proposals also request that they study how such awards could reduce banks’ ability to spend money on other areas, and report those findings to shareholders.
Shareholder resolution activists (not to be confused with, like, real activists) are mostly pretty silly creatures and this is a pretty good example of why. The Journal tries valiantly to make the efforts of Nathan Cummings and his eponymous foundation relevant to the hot-button issue of how much bankers get paid, but it’s pretty clear that the NCF is focused on a thing called “executive pay.” Executive pay is sort of an irrelevancy for investment banks, mostly, since it makes up a relatively small fraction of comp, and since lots of people at banks get paid executive amounts of money without being a named executive officer. And as long as the Nathan Cummingseses of the world are focusing on how much the Lloyds/Jamies/James-not-Jamies of the world are getting, they will probably stay away from your now-30%-paltrier comp.
Other fearless crusaders for shareholders have noticed this, however, and are more interested in going directly after your money, though they have yet to resort to the rather infra dig expedient of shareholder resolutions. Instead they do things like complain to Andrew Ross Sorkin, who earlier this week said: Read more »