Bankers defend lavish pay packages

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Top Wall Street executives today acknowledged that Main Street was unhappy with them and their handling of the economy, but they defended how they award bonuses and other compensation.

Polls have shown that Americans are especially galled by the lavish compensation packages being considered barely a year after the financial credit system ground to a halt. Seizing on that unhappiness, the Obama administration is eyeing a bank fee to recover taxpayer funds used in funding the institutions.

“We understand the anger felt by many citizens,” said Brian Moynihan, chief executive and president of Bank of America. “We are grateful for the taxpayer assistance we have received.”

But Moynihan defended the compensation levels, saying that “the vast majority of our employees played no role in the economic crisis” and do not deserve to be penalized.

Moynihan and others spoke during a televised hearing before the Financial Crisis Inquiry Commission. Phil Angelides, former California treasurer, pledged “a full and fair inquiry into what brought our financial system to its knees.”

Jamie Dimon, chief executive of JPMorgan Chase & Co., said most of his employees took “significant cuts in compensation” in 2008. He said his company would continue to pay people in a “responsible and disciplined manner” to attract and retain top talent.

John Mack, chairman of Morgan Stanley, said the crisis was “a powerful wake-up call for this firm.” He said that he didn’t take a bonus in 2009 and that his bank has overhauled its compensation practices to discourage “excessive risk-taking.”

Also appearing was Goldman Sachs chief Lloyd Blankfein.

-- Michael Muskal
twitter.com/LATimesmuskal