Top managers at Citigroup and Bank of America paid an average $18 million last year
Bankers have become more and more adroit at shooting themselves in the foot this year. Congress, the Administration and the public are already upset by actions that they believe caused the credit crisis, forcing the government to pump hundreds of billions of dollars into the financial system. Goldman Sachs (GS) has drawn tremendous criticism because it will probably pay out record bonuses this year.
Now, it turns out that the the managements of flailing firms Bank of America (BAC) and Citigroup (C) paid themselves extravagant sums in 2008. According to documents obtained by Bloomberg from reports by pay czar Kenneth Feinberg, Citi paid 21 of its managers a total of $390 million and B of A shelled out $227 billion to 17 executives. The average of all that compensation is about $18 million per person.
The data is likely to enrage some Congressional leaders who are already pressing for pay caps at all large financial institutions, a program which would be even more aggressive than the pay czar's restrictions on compensation and guidelines for pay that would be administered by the Fed.
B of A and Citi will probably argue that the large packages were necessary to retain key talent or reward managers whose divisions did extremely well. It does not matter; the huge compensation deals will only increase the near-riot about financial industry pay.
Douglas A. McIntyre is an editor at 24/7 Wall St.