Morgan Stanley chairman says bankers are overpaid

| February 25, 2010 | 0 Comments
Morgan Stanley chairman says bankers are overpaid

The controversial subject of bankers’ pay has reared its ugly head again today after the chairman of US banking giant, Morgan Stanley, John Mack, said investment bankers are overpaid.

Sixty-five-year-old Mack, who recently stepped down as chief executive but remained chairman, has not taken a bonus for the past three years but received a salary of $800,000 last year.

Mr Mack, speaking at Queens University in North Carolina yesterday, said: “I still don’t think the industry gets it.”

He added public anger at banks will linger until the world’s largest economy is on solid footing and said: “If you lost your job and lost your house, it’s pretty easy to be angry at bankers.”

Earlier this week, figures from the New York state Comptroller Thomas DiNapoli, revealed bonuses for Wall Street bankers grew by 17% to $20 billion (£13.2 billion) in 2009.

The figures come at a time when US taxpayers are bailing out banks and Mr DiNapoli said: “For most Americans, these huge bonuses are a bitter pill and hard to comprehend.”

Bonuses have become a huge issue on both sides of the Atlantic since many of the banks that are paying bonuses to its employees had to be bailed out by the taxpayer.

In the UK today, Royal Bank of Scotland (RBS), which is 84% state-owned, posted a full-year loss of £3.6 billion.

However, RBS will still pay £1.3 billion in bonuses to its investment bankers. However, the bank’s chief executive, Stephen Hester, has opted not to take his £1.6 million bonus.

The bank said he had agreed to waive his 2009 bonus amid public anger over the issue.

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