In this Monday, Dec. 3, 2012, photo, John Stumpf, Chairman, President and CEO of Wells Fargo, talks during an interview, in New York.
Mark Lennihan, Associated Press - Ap
Wells Fargo CEO is highest-paid banker at $22.87 million
- Article by: E. Scott Reckard
- Los Angeles Times
- March 14, 2013 - 9:28 PM
John Stumpf, chief executive of Wells Fargo & Co., made more than any banker in America last year — $22.87 million.
Stumpf’s pay package, disclosed Thursday, was up 15 percent from 2011, an increase Wells Fargo said reflected the San Francisco-based bank’s strong performance. Wells Fargo earned $18.9 billion, up 19 percent from 2011, during a year in which big banks turned in near-record profits.
The runner-up at $21 million — a 75 percent increase — was Lloyd Blankfein, CEO of New York’s Goldman Sachs Group, whose pay has been notably lofty over the years. In 2007, Blankfein’s bonus alone was $67.9 million, an example of what critics called extravagant rewards for shortsighted risk-taking, a practice that helped cause the financial crisis.
“If you get it all at once, you don’t really care what happens down the line,” said Paul Hodgson, an independent governance analyst. He said U.S. bank pay practices have improved since the crisis, but only slightly.
European banks such as UBS, HSBC and Barclays have begun pegging most of their CEO compensation to the banks’ performance five years into the future. “And if anything untoward happens during those years, it disappears,” Hodgson said.
U.S. banks have also begun awarding more compensation that depends on future performance, Hodgson said, but it’s a smaller percentage of total compensation than in Europe and is dependent on what happens only three years out.
At Wells Fargo, Stumpf has been less vulnerable to criticism because Wells Fargo is the only giant bank without major Wall Street operations.
Wells Fargo instead has built a reputation as an enormous community bank, taking deposits and making loans on Main Streets coast to coast. And it took fewer risks making home loans during the housing boom, enabling it to emerge as by far the biggest mortgage lender of the post-crisis era, despite sustaining substantial losses.
© 2013 Star Tribune