Target: Securities & Exchange Commission Chair, Mary Schapiro
Goal: Stop excessive bonus and compensation payouts for Wall Street executives
Vikram Pandit resigned as CEO of Citigroup in early October 2012 after an almost five year tenure that saw a precipitous decline in the bank’s value. Citigroup lost almost 90 percent of its stock price during the time Pandit was CEO. Despite this, he will walk away having made around $6.7 million this year. Vikram Pandit’s compensation for a disastrous five years running Citigroup will be in the neighborhood of $260 million.
This is most certainly not an isolated incident. Wall Street executives are generally paid exorbitant amounts of money regardless of their management performance. These same executives will also take home seven-figure bonuses even after their companies were bailed out by the Federal Government.
In the last four quarters, the six largest Wall Street banks have made over $63 billion. In a time when so many Americans are struggling to keep their homes from being foreclosed upon and when income inequality is at a record high, this is simply unacceptable.
What’s more, interviews with executives from these six banks suggest that the $63 billion in profits is not enough. The executives cite higher capital requirements, job cuts, and a general backlash against banking culture in American popular opinion as “unfair.” They also believe these factors have led to an insufficient return on their capital.
This is absurd given the outrageous profits these firms are making (the last four quarters have seen the highest record profits for these firms since 2006). It is this miserly attitude on the part of these banks that has largely resulted in the cultural backlash against them and they are doing nothing at present to help vindicate their reputation.
CEOs like Vikram Pandit should not be allowed to run their companies, and the American economy, into the ground and get rewarded for it. The era of uncapped CEO compensation and bonus pay must end now. Tell the Securities and Exchange Commission to do something about the massive payouts to reckless Wall Street executives.
Dear Mary Schapiro,
I am writing this letter to ask that, as Chair of the Securities & Exchange Commission, you take immediate action to ensure the compensation and bonus payout for bank executives is reduced to sensible levels.
The six largest banks on Wall Street made $63 billion in the last four quarters, the highest since 2006. This is in spite of the fact that these banks required the Federal Government to bail them out. Some of these companies have seen precipitous shareholder value decline while their executives receive compensation in the hundred million dollar range.
These same executives are having arguments over whether their yearly bonuses should be seven or eight figures. And while these individuals complain that recent regulations cut into their returns, the rest of the country struggles with foreclosure, unemployment, and wage stagnation.
This should not be the case. The recently passed Dodd-Frank Bill contains provisions that would crack down on these executives’ pay and make it somewhat more difficult to walk away with massive profits based on poor managerial performance. While this does not address the whole problem, it is a start. I ask that you make this a national priority. Please use your power to curb the excessive payouts that profligate Wall Street executives receive.
[Your Name Here]
Photo Credit: gawker.com