NEW YORK (Reuters Breakingviews) - Wall Street bosses love to talk about their work on diversity. They’re not so keen when others do. On Thursday, Goldman Sachs shareholders narrowly rejected a proposal challenging the firm’s policy of discouraging staff from taking discrimination or harassment disputes to court. When publicly confronted on such issues, Goldman and other big banks tend to argue they’re already doing enough. Opposing investor proposals sends a different message.
NEW YORK (Reuters Breakingviews) - Joe Biden’s $4 trillion plan to boost the American economy is an experiment in taxing the rich. The two spending programs the U.S. president has announced this year – one focused on infrastructure, and the other on education and childcare – will, he says, be paid for by the wealthy and companies. Whether he’s right depends on how plutocrats behave.
NEW YORK (Reuters Breakingviews) - The banking world’s most thankless job just got more so. Wells Fargo’s executive pay plan won approval on Tuesday from a scant 57% of shareholders, based on a preliminary count at the lender’s annual meeting – a level so low that it’s tantamount to failure. Chief Executive Charlie Scharf is at the sharp end of a system that tends to reward success more than risk.
NEW YORK (Reuters Breakingviews) - Jane Fraser, the new boss of Citigroup, says she wants her bank to be excellent. Much of what the $150 billion U.S. lender does at the moment is middling. If Fraser can clean up Citi’s tattered image, brilliance could come from bulking up. Otherwise, a breakup could shine more brightly. Both routes come with challenges.
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Corrects to change “year” to “quarter” in fourth paragraph.)
NEW YORK (Reuters Breakingviews) - America’s two biggest banks started 2021 with the same book value, the first time that had happened since the financial crisis. There the similarity ends. Bank of America Chief Executive Brian Moynihan on Thursday reported his best return on equity to date, at 12%, aided by an improving credit outlook and surging markets. JPMorgan’s Jamie Dimon, though, managed almost twice that. The reason is swagger, something investors prize.
NEW YORK (Reuters Breakingviews) - The last time Goldman Sachs reported a return on equity of more than 30%, in the final quarter of 2009, the world looked very different. These days banks are safer, and the United States is on the cusp of a post-pandemic recovery rather than a post-crisis slump. What remains the same is that such windfalls tend to be fleeting.
NEW YORK (Reuters Breakingviews) - Wall Street’s biggest firms made out like bandits last year. But when it came to pay, they weren't especially generous. Now, as banks prepare to report a roaring start to 2021 in first-quarter earnings, there are signs that motivating staff is becoming a more expensive business. In terms of getting a lot out of relatively few employees, this might be as good as it gets.
NEW YORK (Reuters Breakingviews) - Tech mogul Peter Thiel suggested this week that China might use bitcoin as a “financial weapon” to unseat government-backed currencies in general and the U.S. dollar in particular. The People's Republic is indeed keen on digital currencies. But bitcoin isn't its best way to challenge the greenback.
NEW YORK (Reuters Breakingviews) - Jamie Dimon has a lot to say that shareholders in JPMorgan want to hear. The chief executive’s annual open letter, published on Wednesday, covers some of it. Then there’s the other two-thirds of his 66-page opus, in which he muses on politics, leadership, racial justice, Covid-19 and America’s role in the world. The result is a document that says more about the cult of the CEO than it does about the case for investing in JPMorgan.