US President Barack Obama imposed tough new executive compensation rules on Wednesday for companies receiving taxpayer funds, capping pay at $500,000 per year. Under Obama's compensation rules, companies could, in addition to the $500,000, award restricted stock options that would vest after the government was repaid.
That pay cap would represent a larger drop for Wall Street chief executives than it would for many other CEOs. On Wall Street, base salaries typically represent a small fraction of overall compensation and have stayed steady. The real payday comes from bonuses. For example, in 2007, according to a regulatory filing, Goldman Sachs Chief Executive Lloyd Blankfein's cash bonus was 45 times bigger than his base salary.
John Thain got a signing bonus of $15 million when he became Merrill Lynch's CEO in 2007. In the last decade, Wall Street CEO salaries tended to rise more quickly than those of other Fortune 500 companies such as computer maker International Business Machines and consumer goods company Procter & Gamble. Blankfein's total compensation was about three times higher than what his predecessor and former U.S. Treasury Secretary Henry Paulson made in 1999.
IBM's CEO Samuel Palmisano, made only twice as much as his predecessor made a decade earlier. Below is a table showing how CEO pay at a sample of four companies, Goldman Sachs; Merrill Lynch, now part of Bank of America; IBM; and Procter & Gamble, has evolved in the past decade.
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