Courtesy of Pam Martens.
Nothing buttresses Senator Bernie Sanders’ position that fraud on Wall Street is not a bug but a feature better than the news last week that the Citigroup Board was bumping up CEO Michael Corbat’s pay by 48 percent to $23 million for 2017. Corbat has sat at the helm of the bank since October 2012 as the bank has paid more than $12 billion in fines and restitution for serial abuses of the public and investors, including its first criminal felony count in more than a century of existence. The felony count came on May 20, 2015 from the U.S. Department of Justice over the bank’s involvement in a bank cartel that was rigging foreign currency markets. Numerous other charges against the bank have focused on money-laundering. Citigroup’s long history of involvement in money-laundering also gives the appearance of being a feature not a bug. (See a timeline of the charges against Citigroup under Corbat’s tenure at the end of this article.)
Aside from the feeling that overseeing a business model of fraud on Wall Street is a road to riches for Wall Street’s mega bank CEOs, there is the disquieting question as to whether this strangely uniform obscene pay of the top dogs on Wall Street is being orchestrated by another invisible cartel.
On October 14, 2016 Bloomberg News’ reporters Greg Farrell and Keri Geiger landed the bombshell report that the top lawyers of the biggest Wall Street banks had been meeting secretly for two decades with their counterparts at international banks. At the 2016 secret meeting, held in May at a posh hotel in Versailles, the following were among the big bank lawyers: Gregory Palm, part of the Management Committee at Goldman Sachs; Stephen Cutler of JPMorgan (a former Director of Enforcement at the SEC); Gary Lynch of Bank of America (also a former Director of Enforcement at the SEC); Morgan Stanley’s Eric Grossman; Citigroup’s Rohan Weerasinghe; Markus Diethelm of UBS Group AG; Richard Walker of Deutsche Bank (again, a former Director of Enforcement at the SEC); Robert Hoyt of Barclays; Romeo Cerutti of Credit Suisse Group AG; David Fein of Standard Chartered; Stuart Levey of HSBC Holdings; and Georges Dirani of BNP Paribas SA.
Reuters reported last Friday how Corbat’s $23 million pay compared to his peers on Wall Street. It noted that Jamie Dimon, CEO of JPMorgan Chase is now making $29.5 million. (Dimon has presided over three criminal felony counts at the bank within the past four years while keeping his job and watching his pay skyrocket.) Morgan Stanley CEO James Gorman is making $27 million. Lloyd Blankfein, whose bank is tiny compared to JPMorgan Chase, is making $22 million. And Bank of America’s CEO Brian Moynihan is being paid the same as Corbat, $23 million after recently getting a 15 percent pay boost.
Every one of the top lawyers of these banks were at that secret confab in 2016.
The most recent proxy filed by JPMorgan Chase goes to inordinate lengths to justify what it is paying its CEO Jamie Dimon. It includes a graph comparing his pay to peer bank CEOs and another graph that shows what percent of profits he and the CEOs of peer banks are receiving. (How that became a relevant metric is anyone’s guess. These are not, after all, family-owned businesses but banks that are subsidized by a taxpayer backstop for their trillions in insured deposits which typically earn less than one percent interest as the banks simultaneously charge 10 to 20 percent interest on their credit cards issued to the struggling middle class of America.)
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