A long time Wall St. criticism is that banks focus so much on quarterly results, they sacrifice good business practices for large year-end bonuses. A report just released by the Council of Institutional Investors has concluded that despite Congressional and investor clamoring for changes after the latest market crash, pay practices at six US banks may have indeed worsened.
The report concluded that compensation is still tied to the short-term results. Even worse, to get around regulatory curbs on pay, the banks simply gave absurdly large salaries ranging from $3.3 to $9.9 million. In fact, after the banking crisis of 2008-09, some banks immediately rewarded executives with massive salary increases.... at the same time accepting bailout money from taxpayers.
Conclusion: After causing a freeze of the financial system, crashing the stock market, disregarding foreclosure rules to throw people out of their homes all while grabbing millions of taxpayer dollars to stuff into their pockets, you'd think it would be easier to refinance your home wouldn't you? The large banks are still part of the problem, are not contributing to the recovery as anticipated and are anti-customer in every sense of the word.
The silver-lining may be their future diminished role in our economy. Pay for long-term performance and bonuses is more of a non-US bank standard. Perhaps this is an opportunity for foreign banks to make inroads in the US market.
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