As Wall Street Pay Hits Record Highs, Shareholders Want Their Say. Often.
While regular Americans continue to suffer from home loss and unemployment, the largest banks are once again awarding massive bonuses and compensation to the bankers that crashed our economy in part through risky pay incentives.
Executive pay remains a controversial issue, and no one doubts that it will resurface loudly at shareholder meetings this spring when, thanks to the new financial reform law, shareholders will for the first time get an advisory voice on corporate compensation.
And they’ll have something to say indeed based on the staggering numbers that the Wall Street Journal put out today. In 2010, total compensation and benefits at publicly traded Wall Street banks and securities firms hit a record high of $135 billion. This total is up 5.7% from $128 billion in combined compensation and benefits by these same companies in 2009.
Shareholders have already been taking a stand‑rejecting managements’ recommendations for a less regular vote on compensation, and instead opting for an annual “say on pay.” Investors want democracy, and they want their say. Frequently. So far, of the nine companies where management recommended a triennial vote, five have seen their shareholders express a preference for annual votes instead.
As Wall Street continues to churn out big compensation and bonus numbers and shareholders vote for more frequent opportunities to speak out, we can expect continued attention and eventual changes in the risky pay practices of big companies.
Lisa Gilbert is the Deputy Director of Public Citizen’s Congress Watch Division