Tuesday, April 2, 2013

Bank Board Directors Get Huge Pay Increase For a “Cushy, Part-Time Job”


The 2008 financial crisis touched every sector of the U.S. economy and millions of Americans lost their jobs as a result. But for employees in the financial services industry, business is back to normal.
According to a new report by compensation data firm Equilar, pay for board directors at the six biggest banks averaged $328,655 in 2011. Goldman Sachs (GS) directors got a 50% increase in their 2011 annual compensation compared to 2008. The average pay for a Goldman director totaled $488,709 in 2011, but some directors earned more than $500,000. Goldman adamantly defends its policies, arguing that directors are largely paid in restricted stock, which cannot be touched until a director leaves the board. Goldman's directors met just 15 times in 2011, reports The New York Times. In 2009 all of Goldman’s 13 directors declined compensation.
Related: Main Street Incomes Stay Flat, Big CEO Packages Return
The Daily Ticker’s Henry Blodget and Aaron Task both agree that the average American – who is either unemployed or making less money now than before the financial crisis – would be outraged to know that bank board directors are paid so much for a “cushy, part-time job.” But reforming executive compensation at Fortune 500 companies has been met with reluctance – even apathy.
“We have decided in our society that it’s perfectly fine for the top echelon at our biggest corporations to make hundreds of times more in salary" than the average worker, Blodget says in the accompanying clip.
Morgan Stanley (MS) paid its board directors an average of $351,080 in 2011, the second-highest sum after Goldman, but nearly the same amount from 2008. JPMorgan (JPM) gave its directors annual compensation of $278,195 in 2011 and Bank of America (BAC) directors made $275,000 on average.
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