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These Are The Highest Paid Finance CEOs of 2017

Courtesy of ZeroHedge. View original post here.

For the big banks, the past 10 years have been a free thrill ride courtesy of the Federal Reserve keeping interest rates low and turning on the printing press wherever and whenever necessary (usually after a modest market correction). As a result, banking and financial stocks performed extremely well over the last five years – with the XLF tripling from its post-crisis lows – and CEO compensation has risen accordingly as banks “outperform”.

Today the Wall Street Journal released their list of the highest-paid finance CEOs on Wall Street. It will probably not be a surprise that JP Morgan CEO, billionaire Jamie Dimon, topped the list at $28.3 million earned in 2017, a 4% rise from the year prior. The Journal wrote:

The highest-paid banking and finance chief executive in the S&P 500 is no surprise. It is James Dimon, head of JPMorgan Chase & Co., the biggest U.S. bank by assets and market capitalization.

Mr. Dimon, who has run the bank since late 2005 and steered it through the financial crisis, made $28.3 million in 2017, up 4% from $27.2 million a year earlier.

Mr. Dimon has ranked as the highest-paid among the group of 43 banking and financial CEOs in three of the past four years. The 62-year-old said in January that he plans to run the bank for another five years.

Here is the beginning of the list of finance CEOs that followed Dimon:

The Journal noted that rising pay among finance CEOs was due to impressive total returns for many of their firms – and that JP Morgan’s total return for the was above the median, though it lagged behind BlackRock, Inc. who posted a total return of 11.5% more than JP Morgan:

JPMorgan posted a total return of 26.7% for the year, slightly ahead of the group’s median, but trailing money manager BlackRock Inc.’s 38.2%. Larry Fink, BlackRock’s CEO, made $27.7 million, ranking No. 2. (He was the highest-paid in 2013 and 2015.)

Interestingly, the Journal also noted that the median financial CEO pay hasn’t strayed far off from the median S&P 500 CEO pay, not helping the argument that banking CEOs are necessarily the highest paid on Wall Street. The article continued:

The median pay for the 43 banking and financial CEOs in the Journal’s analysis was $12.1 millionmatching median pay for the S&P 500 as a whole, according to a Wall Street Journal analysis of pay data from MyLogIQ LLC.

The article also pointed out that compared to hedge fund managers, banking CEO salaries pale in comparison. Hedge fund managers, even underperformers, can make well into the billions per year and other firms outside of the financial industry have paid their CEO’s in the hundreds-of-millions range when stock based compensation is combined with cash:

Of course, big-company CEOs aren’t always the top-paid people in an industry where hedge-fund managers can make billions in a year, and firms too small to be in the S&P 500 can pay their chiefs $800 million in a year

Compensation for Wall Street chiefs and deal makers has been on the rise in recent years alongside major stock indexes. Median total shareholder return reached almost 26% for financial firms last year, well ahead of the 19% median for all companies in the S&P 500.

You can view the entire list at the Wall Street Journal‘s article here.


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