And that, kids, is because while we suffer their salaries rise. Weeee! (And, of course Bank of America is included.)
From our friends at ProPublica:
A number of reports on executive pay are out this week, including one on how bank pay seems to have been immune to the recession and unaffected by the bailouts.
According to report yesterday in American Banker, even while the economy took a beating and unemployment soared, average pay in the banking industry continued rising at the same rate as it had before the financial crisis:
The clear trend, in both nominal and absolute terms, is up: Over the last eight years, average compensation for a full-time bank employee has risen 35% to $83,050, twice the rate of inflation. In 2003, the banking industry's 1.3 million full-time employees took home $78.3 billion. In 2010, its 2.1 million employees took home $168.1 billion.
In the first half of that period, raises were to be expected given climbing industry profitability and bank equity's market gains. But the financial crisis appears to have had little impact on pay. Total compensation per full-time employee rose at the same pace from 2007 to 2010 as it did from 2004 to 2007. In the later time period, profitability plunged and the KBW bank index fell by more than 50%.
Keep in mind that the point here is the trend, not the actual average. The figure mixes the modest wages of bank tellers with the big bonuses for top execs and investment bankers. The New York Times noted last year that within investment banks, average pay was solidly in the six figures.
CEOs, of course, are still pulling in millions. Bank of America made headlines this week for what seemed to be a cut to CEO Brian Moynihans compensation. But the $1.94 million hes reported to have taken home in 2010 doesnt include the more than $9 million in deferred compensation that hes due to receive this year.
The high pay isnt limited to Wall Street bankers. A government watchdog report released yesterday [PDF] noted that the now government-controlled Fannie Mae and Freddie Mac paid their CEOs a total of $17 million in 2009 and 2010. The report faulted regulators for failing to scrutinize the mortgage giants lavish compensation.
The Wall Street Journal also reported this week that several Wall Street firms are backing a proposal to give shareholders an annual vote on compensation, though such votes are mostly symbolic. And then theres the matter of the corporate boards that actually set compensation: The SEC is working on finalizing rules that would require disclosure of conflicts of interest for board members and compensation consultants.
The Federal Reserve and other regulators have also proposed a rule that would require top execs at big Wall Street banks to have some compensation deferred. The idea is to rein in the incentive to take risks.