In 2013 the top 27 executives at Bank of America, Wells Fargo, JPMorgan Chase, Citibank, and Ally —the five big financial institutions most responsible for the foreclosure crisis, and subject to the National Mortgage Settlement— paid themselves $296 million in cash and stock. Under the National Mortgage Settlement these banks were forced to write down principal debt on home loans in California. The average principal reduction they granted on 1st lien loans was about $137,000. 33,000 California borrowers benefited from this.
Had the banks applied the $296 million to further principal reduction, instead of using it to pay their top 27 executives, they could have wiped out debt on another 2,164 home loans, effectively saving about that many homes from foreclosure.
And if the banks applied the same sum they paid to their top 27 executives over the past 3 years (2011-2013), a total of $735 million, the could have reduced the 1st lien principal debt on 5,367 homes in California.
To put that in perspective, there were about 31,400 foreclosures in California in 2013, and 283,000 foreclosures between 2011 and 2013. It would have made a small, but significant, contribution to reducing the number of foreclosures and freeing up the finances of thousands of struggling households.
But instead the banks paid their CEOs, CFOs, COOs, VPs and Presidents millions. Average pay in 2011 for these bankers was $11 million each. Wells Fargo’s CEO John Stumpf led the list with over $19 million in compensation in 2013, followed Citibank executives Michael Corbat and James Forese. Three of JPMorgan Chase’s bankers (none of them the infamous Jamie Dimon) followed in the 4th, 5th, and 6th position pulling $16 and $17 million salaries and stock grants.
In 2014 the pay for these 27 executives, whose compensation is public record, will most likely be up yet again, easily topping $300,000,000.