Using the first-ever pay ratio disclosures to the U.S. Securities and Exchange Commission, this report by the Institute for Policy Studies and Public Citizen reveals that pay disparities between CEOs and workers still are out of control at many of America’s national and regional banks.
In response to bankers seeking bloated bonuses that animated the reckless and even fraudulent lending that precipitated the financial crash of 2008, Congress included a series of pay reforms in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. It requires firms to identify the median paid employee at the firm and calculate the ratio with the CEO’s pay. All of the major banks have now released their first CEO-worker pay ratio data, and the numbers reveal that excessive compensation is still a problem in the financial industry.
- Among the largest four megabanks – JP Morgan, Bank of America, Wells Fargo and Citigroup – the average ratio in 2017 was 319-to-1.
- At both JPMorgan Chase and Citigroup, a typical employee would have to work a full year before earning as much as the chief executive pockets in a day.
- Among the 19 banks slated for deregulation in a U.S. Senate-passed bill, the average compensation ratio is 154-to-1.