There’s at least one big bank CEO admitting, again and again, that Wall Street has a pay problem.
In an interview with Bloomberg TV from the Swiss Alps retreat for the global elite -- also known as the World Economic Forum in Davos -- Morgan Stanley CEO James Gorman noted that Wall Street employees may have been pulling in more money than they’re worth.
“The problem with our industry, and with others in the past, has been getting well-rewarded for not doing a good job,” Gorman said.
Excessive Wall Street pay has been a bugaboo of Gorman’s for a while. Last year at Davos he sent the following message to Morgan Stanley employees disgruntled about the prospect of a smaller paycheck: “If you're really unhappy, just leave,” Gorman said on Bloomberg TV. Gorman also told the Financial Times late last year that pay on Wall Street is “way too high.”
Gorman has slightly more credibility on this issue than some of his bank CEO counterparts. After all, he only took home $10.5 million in compensation in 2011, compared to JPMorgan CEO Jamie Dimon’s $23 million and then-Citigroup CEO Vikram Pandit’s $15 million.
His bank also employed a variety of cost-cutting measures including deferring bonuses for top earners and cutting investment bank pay by 7.6 percent this year. Morgan Stanley also laid off about 6,000 people who will now no longer be taking home that too-high paycheck.
But it looks like Gorman may be a long way from achieving his goal. Wall Street pay for 2012 is likely to rise, according to a November survey cited by the Wall Street Journal. Still, bonuses are expected to be the lowest in years.