The CEOs of the largest banks are getting the most pay in the industry, but their institutions aren't putting up the best performance numbers, says
Wall Street Journal financial editor Francesco Guerrera.
"Unfortunately, new research suggests that pay is much more linked to a bank's size than its performance," he writes.
Frederick Cannon, an analyst at Keefe, Bruyette & Woods, combed through pay and performance numbers at the largest banks and those a level below them.
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"His conclusion: investors in large financial groups are suffering when compared with smaller banks but their managements aren't," Guerrera notes.
The eight financial groups labeled "globally systemic" generated total returns — share price increases plus dividends — of a median 38 percent since the end of 2009, according to Cannon.
Meanwhile, "domestically systemic" banks offered a median return of more than 100 percent.
But CEOs of the bigger banks received a median compensation of $57 million from 2010 to 2013, compared with $35 million for CEOs of the smaller banks.
So who's to blame for this? "Regulators have created a situation where their policies are penalizing shareholders but not the decision makers," Cannon tells Guerrera.
Meanwhile, banks are facing criticism for keeping their tellers' wages low while CEO pay is soaring.
The median annual pay for tellers stood at about $25,000 in 2012, and many are seeing their hours reduced as banks seek to save money,
American Banker reports.
"We're hearing from a lot of bank tellers who are saying to themselves, 'This is not that far off from working at a McDonald's or a Wal-Mart,'" Brigid Flaherty, who works on the Committee for Better Banks, tells the paper.
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