Study shows U.S. bank CEO pay dwarfs rest of world

By Steve Eder

NEW YORK (Reuters) - You wouldn't know it by his pay stubs, but Jiang Jianqing heads the world's largest bank.

Jiang, chairman of Industrial and Commercial Bank of China, made just $234,700 in 2008. That's less than 2 percent of the $19.6 million awarded to Jamie Dimon, chief executive of the world's fourth-largest bank, JPMorgan Chase & Co.

The contrast illustrates the massive differences in pay among the CEOs of the world's top banks. The compensation of the CEOs of the largest U.S. banks towers above what's paid to banking chiefs in other parts of the world, according to a Reuters analysis of pay at the 18 biggest banks by market value.

Excessive compensation at banks is expected to be discussed this week when the Group of 20 nations meets in Pittsburgh. But consensus on the issue remains a distant hope as there continue to be vast differences in how bankers are paid, from the CEO on down.

The United States is home to four of the nine largest banks in the world -- JPMorgan, Bank of America Corp, Wells Fargo & Co and Citigroup Inc. It is also home to four of the six most handsomely rewarded bank CEOs.

"The U.S. executive pay levels have always dwarfed pay for companies elsewhere in the world," said Sarah Anderson, a fellow with the Institute for Policy Studies, which is critical of Wall Street, and co-author of the recent study "America's Bailout Barons."

"They have claimed it is impossible to recruit people without paying such compensation. Yet, if you look at the pay levels in Europe and in a lot of Asian countries, somehow they manage to find people who can run major global firms while making a fraction of what they make in the U.S.," she said.

For a graphic comparing bank chiefs' pay around the world, click here

"BASICALLY NOTHING"

China, for example, boasts three of the world's four biggest banks, yet the leaders of those banks -- Industrial and Commercial Bank of China, China Construction Bank Corp and Bank of China -- are among the lowest paid of those surveyed by Reuters. The chairman and the president of each of the banks are paid roughly $230,000 per year.

"That's basically nothing for the leaders of these huge Chinese financial institutions," said Laura Thatcher, who leads law firm Alston & Bird's executive compensation practice in Atlanta. "I can't imagine why they would work for nothing."

So how, exactly, do the Chinese do it?

The Chinese banks, which are state-controlled, are typically led by bureaucrats appointed by the central government, and executive pay is capped.

Being the head of a Chinese bank does come with perks, just like running a U.S. bank. The top Chinese bank executive gets such non-cash benefits as a car, driver, medical insurance, food and housing. Experts note that many American and European executives receive similar benefits.

Some of the Chinese bank executives may be willing to accept the pay level of a top government official in the hope of moving into a powerful political position in the future.