Gap in salaries of top managers and employees of Wall Street significantly reduced


04/06/2015

The gap in salaries of top managers and employees of the banks on Wall Street significantly reduced.



In the United States, the difference between the wage of financial companies’ managers and employees remarkably dropped down. Moreover, according to The Wall Street Journal, in the lower echelons, the number of remuneration grow at a faster rate than for senior management.

Since the financial crisis of 2008, the gap has declined significantly following the decrease in salaries and bonuses of the five biggest Wall Street banks: JPMorgan Chase & Co (NYSE: JPM), Goldman Sachs Group Inc (NYSE: GS), Morgan Stanley (NYSE: MS), Bank of America Corp (NYSE: BAC) and Citigroup Inc (NYSE: C).

In 2014, the average salary of employees of these five banks set a new historical record - $ 148 740, 17% more than in 2006, but their senior managers’ incomes were significantly below pre-crisis levels. Last year, CEO compensation was higher than the bank average 124 times against 273 times in 2006.

The heads of the top five US banks last year in total received from their companies $ 92.5 million compared with $ 173.6 million in 2006.

Securities and Exchange Commission (SEC) US finalizes rule which would oblige all US corporations to publish information on how many times the salary of their leadership is more than the usual reward of employees. It is expected that this rule will lead to a further narrowing of the gap.

CEO and Chairman of the Board of Directors of Goldman Sachs' Lloyd Blankfein remains a leader in revenue in the "big five" of Wall Street - about $ 24 million in 2014 without taking into account the long-term incentive programs, which Goldman will tell just before the annual meeting of shareholders.

Morgan Stanley increased its reward to CEO James Gorman at the end of 2014 by 25% - to $ 22.5 million. The head of JPMorgan Chase & Co. James Dimon last year earned $ 20 million. Under all of the leaders of the major Wall Street banks get Michael Corbett (Citi) and Brian Moynihan (Bank of America) - for $ 13 million.

Earlier it was reported, that the Chief Financial Officer of Morgan Stanley Ruth Porat received a record payout for the transition to a similar position at Google, writes The Wall Street Journal.

Total Porat’s compensation consists of two parts: $ 65 million she will receive with shares, and additional $ 5 million will be transferred to her account, but she will not get them right away. The publication notes that it is a record payment for the transfer of a top manager. On the basis of open data, only Oracle Corp. can compete with Porat, which in the first seven months paid CFO Safra Catz $ 43.6 million.

Porat came in the Morgan Stanley in 1987, in 2003-2009 became the head of the investment division of the bank, and was the Chief Financial Officer in 2010. In addition, she attends Advisory Council of the Ministry of Economy of the United States, the Council on Foreign Relations and the Bretton Woods Committee.

Porat goes to work in Google on 26 May.