Executives Urged to Forego Bonuses and Solve the Mortgage Crisis
New York, New York—(ENEWSPF)—December 19, 2011. As American families struggle to buy holiday gifts for their children, bankers on Wall Street are poised to receive bonuses even larger than last year’s figures. Seven big banks are expected to pay out $156 billion in compensation (including salaries, benefits and bonuses) to executives in 2011, a 3.7 percent increase over 2010, according to a report released today by the Public Accountability Initiative and The New Bottom Line.
Read the report, “Big Bank Bonus Facts: 2011,” here.
“Three years ago, big banks like Bank of America, JPMorgan Chase, and Wells Fargo created a massive mortgage crisis and crashed the economy. Today, they could solve the crisis once and for all. Instead of taking bonuses this year, bank executives need to put aside that money for principal reduction for underwater homeowners and paying their fair share of taxes,” said Tracy Van Slyke, Co-Director of The New Bottom Line.
Although the banks (Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, US Bank, and Wells Fargo) do not release data on compensation until next year, it is possible to estimate the size of the compensation pool based on the first three quarters of 2011. Six of the seven large banks set aside more money for compensation in the first three quarters of 2011 than they did in 2010.
For example, the report notes that, despite a year of losses and a falling stock price, Bank of America set aside 7 percent more for compensation in the first three quarters of 2011 than it did during the first three quarters of 2010. JPMorgan Chase’s investment bankers are projected to make $386,148 in 2011, while employees in the bank’s retail financial services division, many of them tellers, are projected to make an average of $61,130. The projections are based on quarterly filings with the SEC.
“We found that the big banks are on track to pay out even more this year than they did last, despite a continuing mortgage mess, high rates of unemployment, and a financial meltdown in Europe,” said Kevin Connor, co-director of the Public Accountability Initiative. “The Too-Big-To-Fail compensation model continues to reward disastrous, irresponsible behavior by financial executives, to the detriment of the 99%.”
US Bank is projected to increase its compensation pool from 4.5 billion in 2010 to 4.8 billion in 2011, a 8.1 percent increase. Even employees at Goldman Sachs, which is projected to have a 13.2 percent decrease in its compensation pool since last year, are still projected to receive an average of $362,862 in compensation in 2011.
The New Bottom Line and National People’s Action called on the CEOs of Bank of America, Wells Fargo and JPMorgan Chase to forego holiday bonuses for their executives and use the money to write down mortgage principal for families facing foreclosure or who owe more than their homes are worth, make loans to small businesses, and pay their fair share of taxes.
In Chicago and Minneapolis last week, community leaders protested the banks’ outsized bonuses, avoidance of responsibility for the mortgage crisis and their fair share of taxes, and failure to help struggling homeowners. On Thursday, as part of NBL’s Move Our Money campaign, families in Chicago pledged to move $218,000 from Bank of America and JPMorgan Chase to community banks and credit unions that share their values. On Friday, in Minneapolis, about 50 people protested in front of Wells Fargo and urged the bank to create jobs and help people stay in their homes instead of dispersing huge bonuses. In January, when information about the banks’ compensation packages becomes more available, there will be protests across the country.
The New Bottom Line (NBL) is a new and growing movement fueled by a coalition of community organizations, congregations, and individuals working together to challenge established big bank interests on behalf of struggling and middle-class communities. Together, we are working to restructure Wall Street to help American families build wealth, close the country’s growing income gap, and advance a vision for how our economy can better serve the many rather than the few. Coalition members include PICO National Network, National People’s Action (NPA), Alliance for a Just Society, and dozens of state and local organizations from around the country.
The Public Accountability Initiative is a 501(c)3 nonprofit, non-partisan research and educational organization focused on corporate and government accountability. Our mission is to facilitate and produce investigative research that empowers citizens to hold their leaders accountable. Research and analysis by PAI has been cited in major media outlets.