As a chief executive, responding to questions about the growing pay gap between C-suite executives and rank-and-file employees is no easy task – particularly when testifying in front of a congressional committee, as several bank CEOs did last month. Unsurprisingly, most sidestepped the questions to one degree or another. That changed on Thursday when Citigroup CEO Michael Corbat provided a blunter response to CNBC, pointing to himself as an example of how to bridge the gap.
“My answer is I am that person,” he said. “I started in 1983 at $17k a year. And I through the grace of god, through hard work got to where I am. So, I am that person who said, ‘Maybe if I work hard enough I can get there.’”
The pay gap between the CEO and the median employee is worse at Citi than at any other large U.S. bank. Corbat made $24.2 million last year, 486 times Citi's median employee pay of less than $50k. He pointed to the company’s international footprint as the reason for the inequity. “We have got 200,000 people, many of them outside the United States…so to compare Citi against a U.S. company, our average employee in the United States makes right at about $100,000 a year,” he said.
While the general public is unlikely to laud Harvard-educated Corbat’s story as a sterling example of the American dream – lawmakers focused more of their ire on capped-out low-paid retail positions, not entry-level corporate and investment banking gigs – junior bankers at the firm may want to hold on to their complaints over hours and pay considering where their boss started. Adjusted for inflation, Corbat’s $17k salary in 1983 equates to less than $44k in 2019 – or around half of what newly-minted junior analysts currently take home. So get back to work.
Elsewhere, the activist investor who has been creating waves at Barclays over the past few months didn't make much of an impression during the bank’s annual meeting after losing out on a coveted board seat by winning less than 4% of other investor's votes. Edward Bramson, who owns a 5.5% stake in Barclays, has been pushing the firm to rein in costs and cut more fat from its struggling investment bank. While telling the press that his public pressure had already created change within Barclays (despite not coming close to earning a board seat), New York-based Bramson was quick to move on with his Thursday after reading the tealeaves in London. The Telegraph said he spent only a few minutes at the meeting following his cross-Atlantic trip. Hopefully he was using miles…
Morgan Stanley financial adviser Michael Wu was fired by the bank for “not co-operating with an internal investigation” into his involvement in the U.S. college admissions scandal. Wu’s family was reported to have paid an admissions consultant $6.5m in 2017 to purchase a spot for their daughter at Stanford University – by far the biggest payment made among other parents who were charged. (FT)
Boutique investment bank PJT Partners saw a 4% year-on-year decline in revenue during the first quarter yet its chief advisory business saw a small uptick in profit during a stretch when many M&A teams struggled. (Financial News)
RBC Capital Markets has hired a former director of credit sales from Citi. Dan Spitzberg is joining RBC as its head of U.S. investment-grade credit sales in New York. (Financial News)
Goldman Sachs shareholders have elected all the company’s directors with more than 90% of votes greenlighting executive compensation packages. (Reuters)
If it’s up to Warren Buffett’s Berkshire Hathaway, former Wells Fargo Timothy Sloan would still be running the show. But now that he’s been pushed aside, Wells Fargo’s biggest shareholder believes Sloan’s replacement should be a main street banker, not an investment banker. “Not from Wall Street. We don’t like the Wall Street crowd that is making the damn decisions,” said Berkshire vice chairman Charlie Munger. Wells Fargo’s board is said to be ideally targeting a female CEO. (WSJ)
J.P. Morgan is partnering with Microsoft to power its blockchain platform as it seeks to build out next-gen applications. (WSJ)
A former Morgan Stanley trading associate in New York who is looking to file suit against the firm for alleged harassment over his sexual orientation and religion cannot sue the company anonymously, a federal judge has ruled. (Bloomberg Law)
Conspiracy theorists are out for UBS CEO Sergio Ermotti, who some believe took a subtle dig at fellow Swiss bank Credit Suisse during his annual remarks on Thursday. Ermotti noted that UBS booked $19 billion in profits and bolstered its capital by $9 billion over the last five years. “And bear in mind: this has all been done without raising additional capital…and without diluting shareholders when paying dividends, for example,” he said in prepared remarks. Rival Credit Suisse, meanwhile, has tapped shareholders twice in the last three years, for example. (FiNews)
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