Today's Outrage: Citi, Morgan Want to Pad Pay

Citigroup and Morgan Stanley are looking to bump up salaries to sidestep caps on bonuses, according to a report. What part of taxpayer outrage don't they get?
Author:
Publish date:

Faced with opposition to bonuses after receiving taxpayer bailout funds,

Citigroup

(C) - Get Report

and

Morgan Stanley

(MS) - Get Report

want to raise the base pay for executives

and top-producing staff instead, according to the

Wall Street Journal.

So let me get this straight. Since bonuses are taboo now that taxpayers are in a huff over lavish payouts despite horrible corporate performances, the banks want to change the system so they pay regardless of performance. How is that better?

The banks seem to be missing the entire point. If a company doesn't deliver for shareholders then it shouldn't deliver for executives and top employees either. The very definition of bonus implies a reward for outperformance. Yet our financial institutions seem to think of bonuses as entitlements.

That's what taxpayers are outraged about. Getting a bonus or higher salary despite the clear underperfomance of the company is a slap in the face to the hard-working Americans who are footing the bill.

So let's take a look at these wretched salaries.

Citi CEO Vikram Pandit is entitled to a base salary of $958,333, although he has nobly agreed to accept only $1and no bonus until the bank returns to profitability. Of course, he recently stated that the bank has been profitable in the first months of 2009, so let's not discount that pay too quickly.

Other top executives at Citi receive base pay of $500,000, including Vice Chairman Stephen Volk, CFO Gary Crittenden and the CEO for Asia Ajay Banga, according to

SEC

filings. And it's worth noting that those folks all got nice bumps from 2007, with Volk more than doubling his base pay and Crittenden getting about $100,000 more.

Company filings show a similarly glum scene over at Morgan Stanley, with CEO John Mack earning a paltry base salary of $800,000, CFO Thomas Kelleher getting about $340,000 in base pay and other officers earning about $300,000.

Granted, Citi and Morgan Stanley may be trying to look out for top traders and other folks who are key to growing their businesses. But in this environment even those who may deserve a little more will have a hard time making their case. And the Journal notes that a managing director typically pulls down a base salary of $200,000.

All in all, those sound like livable wages to me, especially compared with average household income of $50,233 for the rest of America.

So my advice to banking executives everywhere is to suck it up, focus on getting the financial system back in order and don't mention salaries or bonuses again until we've forgotten all about this nasty economic mess you helped get us in.

That goes for folks at

Goldman Sachs

(GS) - Get Report

,

Bank of America

(BAC) - Get Report

,

Wells Fargo

(WFC) - Get Report

and

AIG

(AIG) - Get Report

as well.

As long as taxpayers are bailing out this financial mess, you'll have to live with some consequences of your actions.

And don't tell us you had nothing to do with this mess.

Hall is the editor of

TheStreet.com

. Previously, he served as deputy editor and chief innovation officer at

The Orange County Register

and as a news manager at

Bloomberg News

in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at

The Journal-Gazette

in Fort Wayne, Ind. His work also has been published in a variety of newspapers including

The Wall Street Journal

,

The New York Times

and

International Herald Tribune

. Hall received a bachelor�s degree in journalism and political science from The Ohio State University and has taken graduate management science courses at Boston University.