American Banker’s Allissa Kline speaks with Principal Shaun Bisman and Partner Kelly Malafis of Compensation Advisory Partners about the latest trends in bank executive compensation, including the future of retention awards and what to expect for the rest of the year.
Partner Kelly Malafis and Principal Shaun Bisman’s exclusive research on retention-based pay was recently published by American Banker. The research revealed that, this year, only a handful of large and midsize banks have reported granting any kind of special awards compared to more than a dozen doing so during the 2022 proxy season. Bisman shares that the decline in these types of rewards reflects growing unease about a potential recession and the uncertainty about banks’ financial performance. Malafis shares that the number of banks granting retention awards to top-ranking executives will probably remain low this upcoming year due to the economic outlook.
Partner Kelly Malafis and Principal Shaun Bisman’s exclusive research on executive pay at large and midsize banks was recently published in an article by American Banker. The article reveals that median total compensation for chief executives at 59 large and midsize banks rose 7%. The median bonus for the CEOs was $1.7 million, a 6.1% increase from the previous year. Their long-term incentives had a median of $3 million, also a 6.1% increase from 2021. Median salary was just over $1 million which represents a 2.7% increase.
CAP data was recently referenced to by American Banker in their recent article discussing some CEO pay cuts at some of the biggest banks in the U.S. in 2022. CAP provided data analysis based on the banks’ most recent proxy statements about 2022 CEO pay packages for seven of the largest nation’s largest banks. Some notable pay cuts include PNC Financial Services Group CEO William Demchak with a 15% decrease and Bank of America CEO Brian Moynihan with a 6% decrease in total compensation compared to 2021.
Partner Kelly Malafis and Principal Shaun Bisman were featured in a webcast with American Banker discussing current key trends in executive compensation. Click the link above to watch!
American Banker mentioned CAP’s research again in their article regarding worker wages and how they compare to CEO pay. CAP’s research involved analyzing a total of 59 banks ranging in asset size from 12 billion to 3.95 trillion. CAP extracted from 2022 Proxies a variety of different data points including: CEO Pay data, Retention Awards, and Diversity & Inclusion Metrics/ Discretionary Adjustments. The Pay Data revealed that Total Direct Compensation for CEOs had risen 5% in 2020, and 21.5% in 2021.
Partner Kelly Malafis and Principal Shaun Bisman were quoted in the recently published American Banker article discussing pay awards within the banking industry. Bisman explained how retention awards were a fairly balanced mix of smaller time-based awards and larger performance-based awards. A CAP analysis on the subject was also referenced and showed how nearly one quarter of 59 large and midsize banks reported such awards in their latest filings with values ranging from $100,000 to $52.6M. Malafis explains how the doling out of these prizes delivers a strong message to chief executives and other corporate leaders who may or may not be currently engaged in employment discussions elsewhere.