In a blog entitled, "Clearing Up the Bonuses Issue," posted on the White House website, the Administration shares President Obama's latest comments on banker bonuses, which are anything but clear. In a recent Bloomberg interview due to air Friday, the President straddled a line between outrage at how much large bank CEOs such as Jamie Dimon and Lloyd Blankfein make and support for free markets and capitalism. This is consistent with speeches he has made over the past year (at least, according to excerpts from earlier speeches provided by the White House).The White House quotes the President as saying, "I, like most of the American people, don't begrudge people success or wealth. That's part of the free market system. I do think that the compensation packages that we've seen over the last decade at least have not matched up always to performance. I think that shareholders oftentimes have not had any significant say in the pay structures for CEOs."
Asked about the $17 million that Jamie Dimon, CEO of JPMorgan Chase, received for 2009, the President is said to have replied, "Listen, $17 million is an extraordinary amount of money. Of course, there are some baseball players who are making more than that who don't get to the World Series either. So I'm shocked by that as well. I guess the main principle we want to promote is a simple principle of 'say on pay,' that shareholders have a chance to actually scrutinize what CEOs are getting paid. And I think that serves as a restraint and helps align performance with pay. The other thing we do think is the more that pay comes in the form of stock that requires proven performance over a certain period of time as opposed to quarterly earnings is a fairer way of measuring CEOs' success and ultimately will make the performance of American businesses better."
Dimon's $17 million includes no cash, it's all in restricted stock units and options. The bank has also said that shareholders will vote on his and other JPMorgan executives' compensation at the next annual meeting. So precisely what the President is "shocked" about is not readily apparent. Perhaps when the entire interview comes out, a clearer answer will emerge.