American banks’ bosses took all five of the top slots in this year’s bank CEO pay rankings, as the pay gap widened between the giants of Wall Street and their peers across the rest of the world. JPMorgan’s Jamie Dimon was out in front for the second year in a row, with a total package of $28.2m. Wells Fargo fell well down the rankings, as new chief executive Tim Sloan received a much smaller package than predecessor John Stumpf, who was forced out after a fake accounts scandal.
Click on the table rows to read individual CEOs’ profiles.
For the men running JPMorgan and Goldman Sachs, the increase in the value of their bank shares was a far more significant contributor to their overall wealth than the $20m-plus they were each paid. European bank CEOs did not do as well, partly because their shares did not enjoy the same ‘Trump rally’ that lifted US bank stocks in the aftermath of the 2016 presidential election.
The chart below shows the total financial benefit bank CEOs received from their institutions in 2016. Americans once again lead the way, with Jamie Dimon closing in on the $200m mark for his year’s work at JPMorgan. Since all the figures are expressed in US dollars, the amounts non-US executives made look smaller than they would have under historic exchange rates.
José Antonio AlvarezBanco Santander
Banco Santander shares have risen about 60 per cent in the past year, although they are still a fifth below their price when José Antonio Alvarez was promoted from chief financial officer to chief executive in November 2014.
Mr Alvarez is respected by investors, even though he operates in the shadow of Ana Botín, who became executive chairman of the eurozone’s biggest bank by market capitalisation almost three years ago.
As the bank reported higher net profits in nine of its 10 core markets earlier this year, Mr Alvarez pointed to the end of a record low interest rate cycle as reason for continued optimism that the bank will enjoy even higher profits once rates start to rise. But he faces challenges after Santander’s June buyout of Spain’s failing Banco Popular. Santander raised €7.1bn in capital in July to rebuild Popular’s balance sheet, which was saddled with €37bn in toxic real estate and loans. Ian Mount in Madrid
Lloyd BlankfeinGoldman Sachs
The first corporate news from Goldman Sachs in 2016 was a 56 per cent fall in first-quarter earnings, a result that analysts had been prepared for, but which still took some of the shine off the bank’s reputation as a money printing machine.
The Wall Street stalwart rallied quickly, with second-quarter profits up 43 per cent year on year, as investment banks rode high on volatility caused by the UK’s Brexit vote and the US presidential elections. The outcome of the US election was to claim some of Mr Blankfein’s most valued colleagues, including chief operating officer Gary Cohn, who became chief economic adviser to new president Donald Trump. The presence of so many Goldmanites in Mr Trump’s administration spawned early hopes that the president would create a more banker-friendly regulatory regime by paring back things such as a ban on proprietary trading.
Hopes for reforms of that magnitude are fading but things are getting easier for banks at the margins. In the meantime, Goldman is hedging its bets away from its traditional heartland of investment banking and markets; in October 2016 it launched an online lending platform, Marcus, which had loaned more than $1bn by the end of June. Laura Noonan in New York
Jean-Laurent BonnaféBNP Paribas
Jean-Laurent Bonnafé takes pride that he has kept BNP Paribas on an even keel since taking over in 2011. Last year profits and revenues at the bank grew, despite a backdrop of crushingly low interest rates. Results in the first quarter blew past analysts’ expectations thanks to a 33 per cent jump in revenues in the global markets division.
Mr Bonnafé told shareholders in May he wants BNP to become one of the top three investment banks in Europe. Mr Bonnafé is trying to cut costs in the group’s lacklustre French and Italian retail banking units, while investing in the digital transformation of the entire group. But the bank missed one of its six key 2016 targets: to cut its operating costs to below two-thirds of revenue. Michael Stothard in Paris
Michael Corbat has been trying to move Citigroup beyond a protracted period of restructuring that saw it deal with a raft of legacy problems including past misdeeds in mortgages and a sprawling corporate structure. Mr Corbat says it is now a “simpler, smaller, safer and stronger” institution.
This summer, the US Federal Reserve appeared to agree when it gave Citi a clean bill of health in its stress tests and the green light to return $18.9bn to shareholders — 82 per cent more than the year before. But if all the upheaval really is in the past, the bank needs to show better returns. Return on equity came to 6.6 per cent in the second quarter, according to Bloomberg. The bank has hit 8 per cent just once since the crisis. Alistair Gray in New York
John CryanDeutsche Bank
Veterans at Deutsche Bank describe 2016 as horrendous, the worst year they have ever known. When the bank was not battling to convince investors it could honour bond payments, it was fending off constant speculation about its future strategy and capital adequacy. And all the while, the US Department of Justice loomed large as it considered a fine for the mis-selling of mortgage-backed securities that could have crippled the bank.
Mr Cryan took the challenges in his stride, acknowledging in grave public statements and internal memos the mountains the lender had to climb. In the final days of the year, Deutsche agreed a $7.2bn settlement with the DoJ, well short of the $14bn figure that had appeared in the press in September 2016.
Resolving the DoJ issue cleared the way for Deutsche to launch an $8.5bn capital raising in early 2017. The lender also fine-tuned its strategy in March 2017 and announced it would no longer sell its German retail bank Postbank. Staff are not celebrating just yet — Deutsche cancelled individual bonuses for everyone above vice-president level in 2016 — but by most measures, the German bank has a brighter future ahead of it. Laura Noonan in New York
Jamie DimonJPMorgan Chase
Last winter JPMorgan chief executive Jamie Dimon was approached about one of only a handful of jobs that would make him even more prominent: US Treasury secretary. Colleagues say Mr Dimon, who has headed the bank for 11 years, did not even seriously consider the role, such was his love of life at JPMorgan and his fear that he and President Donald Trump would prove a combustible combination.
By then, JPMorgan was already riding the trading boom inspired by Mr Trump’s election that would help it almost double investment bank profits in the fourth quarter. The bank’s annual return on tangible equity came in at 13 per cent for the third year in a row.
In his annual letter to shareholders, Mr Dimon promised that there were better times to come, citing the “anticipated reversal of many negatives and the expectation of a more business-friendly environment, coupled with our sustained, strong business results.” Shares in the bank, which rose almost 13 per cent in 2016, were up another 5 per cent in the first half of 2017. Laura Noonan in New York
William A. DowneBank of Montreal
Canadian banks came through the financial crisis in relatively good shape. But William Downe still had his work cut out when he took charge on the eve of the crisis in March 2007. Mr Downe made international expansion an important plank of the bank’s strategy, acquiring UK fund manager F&C and US lender Marshall and Ilsley.
The 65-year-old, who has worked at Bank of Montreal since joining as a credit analyst in 1983, plans to retire after presenting his final annual results in October. He will hand over to his chief financial officer Darryl White as the bank celebrates its 200th anniversary.
Net income has risen for seven consecutive years and the share price is 40 per cent higher than when Mr Downe took over. But the horizon is clouded by worries about Canada’s soaring house prices and record levels of consumer debt. Martin Arnold in London
Shayne Elliott has only been at the helm of ANZ since the turn of 2016, but the New Zealander has already made a big mark on Australia’s fourth biggest bank by assets, most notably by ordering the sale of a string of businesses across Asia and reversing a decade of international expansion in the process.
The bank’s cash profits jumped 23 per cent in the six months to March 2017, but still undershot analysts’ expectations as it continued to suffer from a struggling wealth management division, losses in Asia Pacific retail and muted loan demand. Mr Elliott’s solution is to tear down the bank’s hierarchies and create “agile” teams, like those at Spotify, Facebook and Google, so that ANZ can launch new products faster and respond better to changing market dynamics.
“Instead of having departments that are heavily specialised and functions and heads of those things, you organise yourself around customer outcomes,” Mr Elliot explained to the Australian Financial Review. “The hierarchy disappears very quickly. That has big implications for how we pay people, how we reward them.” Implementation starts in 2018. Laura Noonan in New York
UBS took the restructuring plunge in 2012, much earlier than other European banks, so the Swiss bank and its chief executive Sergio Ermotti have been spared some of the turmoil that subsequently hit rivals. But the bank’s focus on wealth management meant it benefited less from the lucrative trading boom that this year boosted the pay packages of rival executives.
Mr Ermotti believes UBS’s strategy will allow it to keep outperforming over the long term. He still faces hurdles: competition is intensifying to manage money for the richest people in fast growing Asian economies. Mr Ermotti must also decide whether to follow the example set by Barclays and refuse a possible US settlement offer over mortgage bond mis-selling.
Although he has held the top management job at UBS since 2011, Mr Ermotti has given few indications he plans to step down anytime soon. Ralph Atkins in Zurich
James GormanMorgan Stanley
“It’s fair to say the year ended a lot better than it began,” was James Gorman’s summation of 2016. He was not joking. Morgan Stanley was hit disproportionately hard by a slump in fixed income, currencies and commodities (FICC) trading in the early months of the year, leading to a 55 per cent fall in those revenues for the first quarter.
The US bank went on to close the year with its strongest fourth quarter since the financial crisis, after Donald Trump’s election inspired a boom in trading and investment banking. Morgan Stanley’s fourth-quarter profits were also boosted by tough measures on expenses. It announced 1,200 FICC job cuts in late 2015, and a $1bn cost-cutting programme in January 2016. However, Mr Gorman remains characteristically cautious, saying the bank would be “extremely disciplined…There’s no point getting ahead of ourselves.” Laura Noonan in New York
Having worked at HSBC for 37 years and been its chief executive since the start of 2011, Stuart Gulliver is nearing the end of his career at Europe’s biggest bank by market capitalisation. After the board chose to appoint Mark Tucker from Asian insurer AIA to replace Douglas Flint as chairman earlier this year, Mr Gulliver told his fellow directors that he planned to step down in 2018. The search for his successor is already under way.
Buoyed by a multibillion-dollar share buy-back programme, its share price has gained more than 50 per cent in the past year, rising back above where it was when Mr Gulliver took charge. But the bank has missed a string of financial targets and its return on equity fell to less than 1 per cent last year, weighed down by the cost of regulation and a restructuring to refocus on promising markets in Asia. Martin Arnold in London
António Horta-OsórioLloyds Banking Group
2016 proved a tough year for António Horta-Osório, the Portuguese boss of Lloyds Banking Group, after the UK voted for Brexit in June. The vote result sent shares in British domestically focused lenders tumbling amid concerns of a potential slowdown in the UK economy. As the biggest lender in Britain, Lloyds was among the hardest hit, with shares down by about a fifth on the day after the vote.
The fall also pushed back government plans to sell off the remainder of its stake in Lloyds. Former chancellor George Osborne had aimed to offer the final £2bn of shares to retail investors. However, he subsequently dropped plans for the retail share offering, blaming market volatility following the Brexit vote.
Mr Horta-Osório’s personal life also came into the spotlight in August over allegations of an extra-marital affair, which sparked questions over the bank’s succession planning. Emma Dunkley in London
The New Zealand-born chief executive Ross McEwan oversaw state-backed Royal Bank of Scotland’s ninth successive net annual loss in 2016, with losses swelling to £7bn.
The worse than expected results followed a year in which the bank continued to work through a series of legacy issues from the financial crisis, which hit the bottom line. This included a £1.2bn payment to the Treasury to settle a condition of its £45.5bn state bailout in 2008, clearing the path for restarting dividend repayments in the future.
2016 also saw about £825m of costs incurred as part of RBS’s ongoing rundown of its “bad bank”, the unit created after the financial crisis to house toxic assets and unwanted businesses. The huge loss saw RBS’s bonus pool shrink by £30m to £343m for last year, falling below Lloyds Banking Group’s payout for the first time in more than a decade, reflecting the diverging fortunes of the two banks. Emma Dunkley in London
David McKayRoyal Bank of Canada
Two years into the job of running Canada’s biggest bank by market value, David McKay is riding high. RBC’s share price has added almost 20 per cent since he took charge in August 2014, outperforming the rest of Canada’s “big five” banks. Rising profits have allowed him to bump up the lender’s dividend several times.
Having bought “Hollywood’s Banker” City National in Los Angeles two years ago, Mr McKay, who joined RBC 29 years ago, made expansion in the US a key part of his strategy. Yet he is frustrated by the uncertain political climate under President Donald Trump, telling the FT recently that he “struggled” to get comfortable with US bank valuations and had paused further acquisitions south of the border until there was more clarity.
He also has concerns north of the border, saying this year that he was “increasingly concerned” about soaring house prices in Toronto and Vancouver, which he blamed on an “unhealthy combination of factors”. Martin Arnold in London
Brian MoynihanBank of America
Along with rival Citigroup, Bank of America was long seen as epitomising the post-crisis collapse in the fortunes of big US banks. Profits were persistently underwhelming as it grappled with a series of regulatory and legal difficulties. Since the US election last November, however, things have been looking up for the bank and its chairman and chief executive.
Soon after Donald Trump’s victory, Brian Moynihan said optimism among US consumers was “palpable”. Since the election, shares have leapt 46 per cent, more than any other big six US bank, as investors reckon BofA will be a prime beneficiary of higher interest rates given the scale of its domestic lending business. So far results remain mixed, though. In the first quarter, the bank generated a return on equity of little more than 7 per cent.Alistair Gray in New York
Tim SloanWells Fargo
Tim Sloan had long been lined up to succeed John Stumpf at the top of Wells Fargo, but his promotion came sooner than anyone expected. He was elevated to CEO last October after a fake accounts scandal cost Mr Stumpf his job.
Wells was plunged into crisis after it admitted that as far back as 2002, thousands of employees were under so much pressure to hit sales targets that they signed up customers for accounts they knew nothing about. Since then, the 57-year-old has had one task: restore confidence in the retail-focused US bank.
Wells veteran Mr Sloan has sought to revamp the lender’s culture to prioritise relationships with customers. He is also accelerating cost-cutting to safeguard profits. The scandal is far from over for Mr Sloan, however, not least because of a series of lawsuits filed against the bank. Alistair Gray in New York
At the start of this year, Jes Staley looked like he was beginning to get comfortable with the job of running Barclays, which he was hired to turn round in December 2015. Buoyed by a return to profit last year and with his strategy taking shape of exiting operations across Europe and Africa to focus on its core US and UK markets, he was enjoying a rebound in the British lender’s share price.
However, since then it has become clear that the Massachusetts-born former JPMorgan Chase banker is facing a serious struggle just to keep his job. He is being investigated by the UK’s two main financial regulators for trying to uncover the identity of a whistleblower despite being told not to do so by his security team. The Barclays board has reprimanded Mr Staley and promised to cut his bonus while expressing its “unanimous confidence” in him. Martin Arnold in London
Tidjane ThiamCredit Suisse
If Tidjane Thiam had hoped for a calmer 2017 after a turbulent start to his time at the helm of Credit Suisse, he was disappointed. Last year, a sharp downturn in global financial markets created perilous conditions for his sweeping restructuring plans.
So far this year, Mr Thiam has managed to more or less hold the course — but not without tactical changes. In February, he backtracked on plans to raise capital by listing a minority stake in Credit Suisse’s domestic Swiss universal bank. The following month, Credit Suisse offices were targeted in sweeping tax investigations launched in the UK, France and the Netherlands.
But Mr Thiam also found difficulties closer to home. Credit Suisse faced a backlash from shareholders and politicians for not taking into account a $5.3bn settlement in the US over the past sale of toxic mortgage securities when deciding on bumper pay awards for current managers. Mr Thiam and his top managers hurriedly agreed a 40 per cent bonus cut. Even so, investors only narrowly approved the bank’s compensation report. Ralph Atkins in Zurich
Carlos Torres VilaBBVA
Carlos Torres’s first year at the helm of BBVA was a good one financially. During 2016, Spain’s second-largest lender by assets beat analysts’ expectations with a 32 per cent jump in full year net profits, to €3.48bn.
The results were all the more impressive since they came against a backdrop of the political and currency turmoil in Mexico, the bank’s most important market, and despite a one-time €404m charge linked to illegal mortgage contracts in Spain. BBVA faces more risks Mexico, where the currency and economy remain sensitive to American talk of building a border wall and renegotiating the Nafta trade deal.
An engineering and management graduate of the Massachusetts Institute of Technology, Mr Torres has worked with executive chairman Francisco González to modernise BBVA in 2017, acquiring the Mexican online payment start-up Openpay and signing a deal to offer the online payment service Alipay from China’s Ant Financial Services Group. Ian Mount in Madrid
Bill WintersStandard Chartered
When spiralling losses from a risky lending spree after the financial crisis caught up with Standard Chartered two years ago, the emerging markets bank turned to Bill Winters to handle the clean-up job. The former JPMorgan Chase executive had spent the past few years running his own debt fund and helping to shape UK banking regulation.
Since taking over at StanChart, Mr Winters has replaced many top managers, launched a restructuring and repaired the balance sheet by scrapping the dividend and setting up a rights issue. The bank made its second annual loss last year, albeit a narrower one, and despite its share price gaining a third in the past year it is still down 10 per cent since Mr Winters took over. His biggest challenge, having slammed on the brakes by tightening risk controls, is to return the bank to growth. Martin Arnold in London
Parts of this page were derived from previous versions of this annual feature by Steve Bernard, Ben McLannahan, Martin Arnold, James Shotter, Jamie Smyth, Emma Dunkley, Alistair Gray, Megan Murphy, Daniel Schäfer and Patrick Mathurin: 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009