The most common argument for big bonuses is that banks have to pay «competitive» wages. Which is why the salary the U.S. bank J.P. Morgan is paying its long-standing CEO Jamie Dimon is heaping pressure on the industry.
In February, bankers will be on edge, as it is the month during which special bonuses for the past 2023 are announced.
In the executive suites, a few more zeros can be added, with bank managers often comparing themselves to domestic and foreign competition. Especially as the most senior Wall Street CEO has once again raised the bar to breathtaking heights.
More Pay Than Ever Before
As the British newspaper «Financial Times» reports (paid article), the largest American bank J.P. Morgan pays its longtime CEO around 36 million dollars, which is up 4 percent from the previous year and Dimon’s largest salary since he took up his post in 2005.
The 67-year-old top banker’s fixed salary is «only» 1.5 million dollars. The remaining 34.5 million dollars is paid out as a bonus. The generous additional remuneration is meant to reflect the bank’s strong performance in the previous year. The U.S. titan’s earnings soared to nearly 50 billion dollars.
Dimon’s example shows the bonus culture in banking is in fact alive and kicking. Boards of directors of big banks regularly point to the salaries of their competitors to justify the exorbitant salaries paid to their own management.
Ready Excuse for Regulators
During his first term as UBS CEO Sergio Ermotti used similar arguments to become the best-paid boss of a bank in Europe.
His salary following his return to Switzerland’s largest bank has sparked controversy. When it comes to deciding whether Switzerland can and wants to afford a megabank, UBS complemented by Credit Suisse, big banker bonuses will provide a ready excuse for rigorous regulation.
