Top Financial CEO Salaries

The financial industry represents one of the most beneficial in financial terms of all industries. This is due to the fact that the salary and bonuses that the five CEOs that receive the highest remunerations amount to more than nine million dollars every year. The amount is significantly increased when the value of such investments as stock option and grants, and other long-term motivations are added.

We are all well familiar with the many actors, athletes and initiators of high-tech companies, who make their millions, but most of you haven't even heard of many Wall Street millionaires. Some of them possess more money than even the accumulated sums of several superstars. But they are not public celebrities that can be recognized while walking on the street.

A study on the salaries, bonuses, stock option gains and grants, long-term incentive payouts and grants of several financial CEOs have been made by the Wall Street Journal in alliance with the Mercer Human Resource Consulting. It was conducted on the basis of data obtained for the year 2005 from proxy statements from 350 major US corporations.

Here is a chart of the five richest financial advisors for 2005.

Charles Schwab (Schwab)

Charles Schwab possesses:

• Salary and bonuses - more than $4.8 million
• Stock option gains - $17 million
• Realized direct compensation - $21.8 million

It is surprising to know that Schwab had to terminate his retirement in order to come to the rescue of his company.

Marion and Herbert Sandler (Golden West)

They both share the fifth position with Mr. Schwab. They possess

• Salary and bonuses - $1.5 million each
• Stock option gains - $20 million
• Realized total compensation - between $21.7 and $21.8 million

John Mack (Morgan Stanley)

Mr. Mack has re-joined Morgan Stanley in the middle of the year, which explains his salary of $337,500. It represents only half a percent of the total compensation he has received. So:

• Salary - $337,500
• Bonus - $11.5 million
• Stock option gains - $30 million
• Restricted options for joining the company - $26 million
• Realized direct compensation - $68 million

E. Stanley O'Neil (Merril Lynch)

The case of Mr. O'Neil is the same as that of Mr. Paulson with regards the lower salary, which is being compensated by the higher amount of bonus.

• Salary - $700,000
• Bonus - $34.3 million
• Stock option gains - $3 million
• Total realized compensation - $38 million

Henry Paulson Jr. (Goldman Sachs)

He made:

• Salary - $600,000
• Bonus - $29.5 million (Henry Paulson compensated the low salary by this large sum of bonus.)
• Realized total compensation - over $30 million (Note: This sum doesn't include distributions form a private investment fund in which he participated, which amounted to $12.7 million. If this money has been included, he would have been in a higher position in the chart.)

And the winner is ...

Richard Fuld Jr. (Lehman Brothers)

The winner in the competition "Who is the richest CEO?" made:

• Salary - $750,000
• Bonus - $28.7 million
• Stock option gains - $75 million (thanks to the 51% shareholder return)
• Stock options - $10 million
• Total realized compensation - $104.4 million

Footnote: Richard Fairbank (Capital One) should be the real winner in this race, but his payment structure is quite different from the others'. This is so since he hasn't received any salary, bonus or incentive. His wealth of $249 million comes from the realized stock option gains.

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