Banking

CEO pay went down at most banks last year. These five were outliers.

While chief executives at most large and midsize banks took a pay cut in 2023, a few companies bucked the trend, rewarding their top leaders for strong performance.

As last spring’s bank failures and high interest rates put pressure on financial results, the median annual bonuses for CEOs, which are typically benchmarked to performance, took about a 30% hit, according to a recent study from Compensation Advisory Partners. On the flip side, companies that showed strong earnings growth in 2023 increased their top leaders’ total compensation.

“We tell our clients pay and performance must be aligned,” said Shaun Bisman, a partner at Compensation Advisory Partners. “The companies that had the double-digit increases had strong profitability.”

Compensation Advisory Partners reviewed salaries, bonuses and other compensation data from 53 regional and national banks based on 2023 performance. Of those institutions, only about a dozen paid their CEOs more year over year.

Bisman said that CEO pay could have been even lower at many companies, but boards used qualitative factors or discretion to exclude events outside of management’s control, like the negative impacts from the collapses of Silicon Valley Bank, Signature Bank and First Republic Bank. 

Kelly Malafis, a founding partner of Compensation Advisory Partners, said there’s been a lot of “noise” in the system the past few years — not only last year’s turbulence, but also the upheaval at the start of the pandemic, the industry’s strong financial performance in 2021 and challenges in attracting and retaining talent.

Wells Fargo, which increased CEO Charlie Scharf’s pay by a relatively dramatic 18% last year, saw the benefits of diversified businesses, Malafis said. Major banks like Wells were also a landing spot for many consumers after last spring’s musical chairs for deposits, she noted.

Wells’ board approved Scharf’s $29 million total 2023 compensation, outlining the benefits of his leadership, including pushing the bank to be “a source of strength” amid last year’s crisis. The bank’s stock price rose 18.2% last year, parallel to the pay increase for its CEO.

What follows is a look at some other banks that departed from the industry trend last year by increasing their chief executives’ total compensation.

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