Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Does America Hate Wall Street but Love Silicon Valley?

Wall Street executives are overpaid and ever-greedy, right? Bankers are just a bunch of fat cats, not worthy of their multi-million dollar compensation packages.

That seems to be a common narrative among most Americans. But the ugly picture being painted may be unfairly dishing the hate in the direction of Wall Street.

Fox News's Neil Cavuto recently did an interview with Patriot National Bank Chairman Michael Carrazza, and suggested that there's a double-standard in the pay of today's top executives.

Cavuto noted that public opinion would suggest tech CEOs like Mark Zuckerberg are daredevils well worth their billions, while bank executives are, "just devils not worth their millions."

Which executives are really cashing in?
Let's take a look at some of the top CEO compensation packages in 2013, and see if the discrepancy is as big as suggested.

Top Executive Compensation in 2013
Company CEO Total compensation-2013
Apple Tim Cook $4 million
Hewlett-Packard Meg Whitman $18 million
Oracle Larry Ellison $78 million
JPMorgan Chase (NYSE: JPM  ) Jamie Dimon $20 million
Citigroup (NYSE: C  ) Michael Corbat $14 million
Bank of America (NYSE: BAC  ) Brian Moynihan $14 million

Source: Company filing.

The pay to banking CEOs is certainly more consistent. Jamie Dimon has been CEO longer than Corbat or Moynihan, he manages the most assets, and therefore is paid the most. Corbat and Moynihan manage similar-sized banks and have similar compensation. 

The tech CEOs, on the other hand, are all over the place. This is because, in general, there's larger amounts of stock compensation in the tech sector than the financial sector.

Stock compensation
JPMorgan and Bank of America gave its CEOs approximately $10 million in stock options in 2012. While Citigroup compensated its CEO with approximately $6 million in stock awards. 

Zuckerberg and gang are laughing their way to the bank too. Photo: Brian Solis

These numbers are dwarfed by the stock compensation of tech executives.

Apple awarded Tim Cook with more than $350 million in stock in 2011. Google's Eric Schmidt received over $93 million in stock and option awards in 2011, and in 2012 Facebook awarded its COO and CFO a combined $42 million in stock awards. 

The tech sector's silver bullet
According to Cavuto, every time he asks about the discrepancy in pay he gets the same answer, "But we didn't embarrass the United States government and cost the taxpayers money." 

To which, Michael Carrazza responded, in so many words, maybe they shouldn't bite the hand that has fed them. In fact, it's Wall Street that helped supply the money tech companies needed to grow and prosper.

Carrazza went on to suggest the poor image of bankers is media-driven -- specifically, the liberal media. A point I was planning to ignore, until I discovered the political leanings of each industry.


The financial industry, unquestionably, is Republican-leaning. The tech industry, though it's not as obvious across the board, tends to lean Democrat with its donations. While I still don't believe the liberal media is solely responsible for the poor image of bankers, it's interesting nonetheless to see where allegiances lie. 

Is there really a double standard?
Yes, there is a double-standard. But it's the nature of the industries at hand. Apple makes the phone you love, and Citigroup owns your debt. It's easy to love one and hate the other.  

Executive performance goals are listed on each companies proxy statement under DEF 14A. JPMorgan, Citigroup, and Bank of America improved upon those standards from 2012 to 2013, and thus, the CEOs deserve to be rewarded for their efforts. 

For those that still have a problem with the compensation of banking executives, I'll reiterate what was said in Fox's interview, "If you going to hit one on outrageous pay, hit'em all."

The big banks biggest nightmare
Do you hate your bank? If you're like most Americans, chances are good that you answered yes to that question. While that's not great news for consumers, it certainly creates opportunity for savvy investors. That's because there's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banking model. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. For the name and details on this company, click here to access our new special free report.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2850442, ~/Articles/ArticleHandler.aspx, 9/2/2015 9:19:12 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dave Koppenheffer

Dave Koppenheffer, is a contributor for the Motley Fool's financial sector. And much like Dwayne "The Rock" Johnson, when he speaks, he speaks with an earnest vibe and an earnest energy.

Today's Market

updated 12 hours ago Sponsored by:
DOW 16,058.35 -469.68 0.00%
S&P 500 1,913.85 -58.33 0.00%
NASD 4,636.11 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 4:00 PM
BAC $15.58 Down -0.76 +0.00%
Bank of America CAPS Rating: ****
C $50.94 Down -2.54 +0.00%
Citigroup Inc CAPS Rating: ***
JPM $61.45 Down -2.65 +0.00%
JPMorgan Chase & C… CAPS Rating: ****