JPMorgan Chase and Goldman Sachs boosted the cash portion of their leaders’ bonuses for the first time since 2010, as a surge in U.S. bank stocks slows, Bloomberg said.
JPMorgan’s board gave Chairman and Chief Executive Officer Jamie Dimon a $7.4 million cash reward, his first since 2011, while keeping his total pay for 2014 unchanged at $20 million. Goldman Sachs’s board deviated from a four-year practice of paying 30 percent of Chairman and CEO Lloyd C. Blankfein’s bonus in cash. His cash component this time, $7.33 million, accounted for a third of the bonus in his $24 million package, the report said.
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Wall Street banks retooled compensation in the wake of the financial crisis to emphasize stock that vested over years, ensuring executives had a stake in the health of their firms. That was a boon to employees as U.S. financial shares almost doubled over the past three years, a run that slowed in 2014. This year the stocks are off to their worst start since 2009, Bloomberg said.
Spokesmen for both New York-based firms declined to comment on bonus decisions. The other largest U.S. banks have yet to disclose 2014 pay for their CEOs, according to the report.
Morgan Stanley, led by James Gorman, 56, said last month it will let employees take home a greater share of their rewards immediately. It’s cutting the portion of bonus pools that it defers to an average of 50 percent, down from almost 80 percent in 2013, Bloomberg said.
JPMorgan board members left Dimon’s total pay unchanged as the 58-year-old weathered a tumultuous year. In 2014, hackers breached JPMorgan’s computers, and the bank settled claims that traders sought to rig foreign-exchange benchmarks. While declining legal costs helped boost profit 21 percent in to a record, revenue slipped, the report said.
While giving Blankfein more cash, Goldman Sachs’s board imposed a new requirement on his $14.7 million restricted-stock award, making half subject to “performance conditions.” Last year the 60-year-old CEO also got a $6 million long-term incentive tied to certain targets, bringing his total package to $29 million. Any such award this year would be disclosed in the months ahead, Bloomberg said.
Even with the added cash payouts, much of Dimon’s and Blankfein’s pay hinges on helping shareholders, said Mark Borges, principal at San Francisco-based compensation consulting firm Compensia Inc., according to the report.
“They still get the majority of their pay in stock, which still provides some alignment, ” he said.
