To Challenge Executive Compensation, Shareholders Must Prove Waste

The total CEO compensation of the five largest banks in 1990–Citibank, Bank of America, Chase Manhattan, Morgan Guaranty Trust Company of New York, and Wells Fargo–was 98x the salary of the median bank employee at those firms. By 2015, the total CEO compensation of the five largest American banks–Wells Fargo, JP Morgan, Bank of America, Citigroup, and Goldman Sachs–was almost 500x the salary of the median bank employee.

This is an individualized snapshot of a trend that is well known among the general public: The compensation of America’s top executives has increased at a much quicker rate than that of a rank-and-file employee. There have been some short hurdles that have been put in place to slow this trend down–the New York Stock Exchange and Nasdaq have independence requirements for a publicly held corporation’s compensation committee that must be met in order for the company to be listed on the … Read the rest of this article!