Bankers at Goldman Sachs Group Inc had a tumultuous 2012. The firm cut 900 jobs, promoted the fewest executives to the exalted post of partner in more than a decade and slashed the portion of revenue set aside for compensation to 38 per cent from 42 per cent a year earlier.
For the man at the very top of Goldman Sachs's pay pyramid, CEO Lloyd Blankfein, 2012 was his finest year since the boom times of 2007. Blankfein, 58, was awarded $26 million for his work last year, lifting him to No. 1 in the Bloomberg Markets ranking of the best-paid CEOs at North America's 20 largest financial companies by customer deposits.
John Stumpf, who led Wells Fargo & Co to a record profit of $18.9 billion, ran a distant second, at $19.3 million, Bloomberg Markets magazine will report in its July issue. The pay of the 20 chiefs increased an average of 7.7 per cent for 2012 compared with a year earlier, according to data compiled by Bloomberg.
The tally is based on salaries, stock, bonuses and long-term incentive pay awarded to the CEOs for 2012.
"All of them are being overpaid," says Eleanor Bloxham, CEO of Value Alliance Co, a board advisory firm in Westerville, Ohio. "The bank boards still don't have a good handle on how they should be compensating their executives."
Bloxham says directors lean too much on share performance and instead should look at how CEOs manage risk, including capital ratios that measure financial strength.
The 2010 Dodd-Frank Act gave shareholders a non-binding vote over compensation, spurring them to examine more closely whether CEO pay is in line with results.
