March 12, 2014
New York Comptroller’s Report on Wall Street Bonus Increase Underscores Need for Accountability, Tax Reform
Statement of Bartlett Naylor, Financial Policy Advocate, Public Citizen’s Congress Watch Division
In a year when the leading Wall Street firms paid record fines for fraud, the average bonus rose 15 percent, further evidence that accountability apparently doesn’t apply to individual bank accounts.
In an annual report released today, the New York State Comptroller found that the average bonus rose to $164,530. That’s the third-highest figure, trailing only the years when bankers fed most voraciously at the mortgage-backed securities trough, a feeding frenzy that led to the crash of 2008.
Profits in 2013 actually declined at the New York banks, in no small part because of the massive fraud fines paid by numerous mega-banks. JPMorgan Chase led this rogues’ category, capped by a $13 billion payout in November 2013.
But too few in Washington and Wall Street seem to believe in individual accountability. Federal prosecutors have named no individual responsible for the widespread scams. And now, incongruously, bankers are taking home even bigger bonuses. JPMorgan gave CEO Jamie Dimon a 75 percent raise only months after its latest, record settlement. The message for fraudsters seems to be, “carry on.”
Public Citizen supports efforts in Congress to reform runaway pay. Companion bills introduced by U.S. Sens. Jack Reed (D-R.I.) and Richard Blumenthal (D-Conn.) and U.S. Rep. Lloyd Doggett (D-Texas) would close loopholes that allow companies to deduct as a business expense pay beyond $1 million.
Public Citizen also supports the creation of new policy to require better disclosure when federal prosecutors decide on monetary penalties for too-big-to-jail banks, instead of pursuing criminal cases.