CEO Pay Rankings: Jane Fraser of Citigroup Falls Behind in 2023 Compensation
In the ever-changing landscape of CEO pay, Jane Fraser of Citigroup has fallen behind her counterparts in the banking industry. While in 2022, Fraser was earning almost as much as David Solomon of Goldman Sachs, with both CEOs taking home around $24.5 million, the official numbers for CEO pay in 2023 tell a different story. Fraser’s compensation has only seen a modest 6% increase to $26 million, while Solomon’s total compensation has risen to $31 million. This significant gap in pay has put Fraser at the bottom of the list among the big US bank CEOs, which is particularly notable since she is the only woman among them.
However, it’s important to note that CEO compensation reported in published accounts may not accurately reflect the actual amount of money they receive. The reported figures often include stock-based and cash incentive awards that will vest in the future, as well as amounts related to past deferred compensation schemes. As a result, the true earnings of CEOs like Fraser and Solomon won’t be known until several years’ worth of performance and share price data are available.
While fairness in banker compensation is often a topic of debate, it’s crucial to understand that pay awards are not solely based on an individual’s intrinsic worth. They are influenced by market conditions and serve as a tool to align incentives. This principle applies to all levels of the banking industry, from entry-level analysts to top executives. In the case of Solomon, his increased pay may be a reflection of potential lucrative offers from other firms and the desire of Goldman Sachs’ board to retain him.
Similarly, Fraser’s pay rise comes despite a 40% decrease in Citi’s profits due to her restructuring program. This demonstrates that companies value CEOs who are willing to make short-term sacrifices for long-term gains. Ultimately, comparing CEO pay across different banks may not provide an accurate picture of their individual contributions and the unique circumstances surrounding their compensation.
In other news, Bill Ackman of Pershing Square Capital Management has climbed into the top ten best-paid hedge fund founders. What’s interesting is that Ackman achieved this feat without making any major changes to his investment portfolio, showcasing his ability to recognize the value of his existing holdings. This demonstrates a level of discipline and confidence that sets him apart in the industry.
Meanwhile, LSE Group has extended parental leave to 26 weeks, starting in July. This move reflects a growing trend towards providing more support for working parents. On the other hand, ExodusPoint has closed its Paris office after two years, primarily due to the lack of profitability in its statistical arbitrage strategy. This decision is not necessarily indicative of Paris as a financial center but rather specific to the firm’s investment approach.
Additionally, some tech firms and venture capitalists who relocated to Miami are now returning to San Francisco. This shift may prompt banks that made similar moves to reevaluate their decisions, considering the challenges of operating in a different climate throughout the year.
For those aspiring to become CEOs of family offices without the advantage of being born into extreme wealth, alternative routes such as obtaining an MBA or CFA, gaining extensive banking experience, and building a network of connections with other family offices are crucial.
Barclays aims to increase revenue while maintaining or reducing capital and extracting more fee income from its lending clients. While this strategy is not inherently flawed, it does raise questions about the bank’s ability to achieve these goals given past challenges.
Lastly, Karl Morris of Ord Minnett stands out as a CEO who maintains a personal connection with his clients despite his leadership position. His dedication to client relationships is commendable and showcases his commitment to providing personalized service.
In conclusion, CEO pay rankings can be misleading, as reported figures may not accurately reflect actual earnings. The banking industry’s compensation structure is complex, influenced by market conditions and designed to align incentives. It’s essential to consider the unique circumstances surrounding each CEO’s pay and the long-term goals of their respective organizations.
