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Strategies & Market Trends : Booms, Busts, and Recoveries
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From: Haim R. Branisteanu2/1/2010 1:24:37 PM
   of 74559
 
Bank pay gets boost on the sly
By Aaron Elstein

Published: January 31, 2010 - 5:59 am

Hoping to mute public outrage over huge Wall Street bonuses, the big banks are making a show of paying employees with more restricted stock, which can't be touched for years, and less cash.

Much less well-known is this: Many of the banks are paying dividends on those shares—even though the employees don't actually own them yet.

While the perk angers some shareholders, the reality is that executives at banks and other large companies routinely collect dividends on shares they don't own. Most companies reveal only scant information about the practice, but a review by Crain's shows that 13 of the 15 best-paid CEOs in New York received them in 2008, the most recent year for which data are available.

The sums can really add up. AllianceBernstein Chief Executive Peter Kraus, for example, pocketed $3.9 million in dividends for 2009—14 times his base salary—on a restricted share grant that doesn't become entirely his until it fully vests at the end of 2013. Goldman Sachs CEO Lloyd Blankfein was eligible to receive around $190,000 in dividends last year on his restricted shares. J.P. Morgan Chase CEO Jamie Dimon stood to collect as much as $159,000.

AllianceBernstein, Goldman and J.P. Morgan declined to comment on last year's pay.

crainsnewyork.com
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