Bank CEOs' rising compensation, and could someone please pay me $22.9M per year?
In my strolls through finance news this past week, I came across a fascinating article about how much bank CEOs' compensation rose in 2012.
According to SNL Financial, the median bank CEO compensation package jumped 22.2 percent in 2012. In 2011, the increase was less than half that rate, at 9.8 percent.
What led to the significant jump? One likely factor was that the number of small institutions surveyed dropped by about 100, because dozens of institutions — most with less than $1 billion in assets — deregistered their stocks and no longer file public proxy statements.
The article points out that external influences, such as investors and regulators weighing in on the fairness of such packages, are clearly affecting compensation. For example, boards are offering fewer options and more long-term performance shares, and though discretionary pay continues to exist, it includes elements that reward long-term decision-making success, says Todd Sirras, managing director at executive compensation consulting firm Semler Brossy.
After the public outcries of previous years over executive bonuses at foundering companies and the prevalence of so-called golden parachutes, the SNL survey seems to indicate a move in the right direction for these banking boards. And even though the median pay technically slipped for CEOs of the largest banks, several of the executives at some of the largest banking institutions remain on the list of the highest-paid CEOs in all industries for 2012, SNL reports.
There's a lot more interesting information to be drawn out of the report and its accompanying charts, which you're welcome to do.
What I'm thinking about most, however, is this: How exactly does one become worth $22.9 million per year? That's a compensation stratosphere few people ever attain, of course, though it's one probably none of us would turn down. But if you asked me what skill set a person would need to have to be worth such a sum, I'd be hard-pressed to make a comprehensive list of viable qualities.
What do you think? Which skills, characteristics or abilities would you consider vital?