Just as the peak in oil prices and earnings drew politicians' attention in 2006, Wall Street pay packages appear to be doing the same in 2007. President George Bush toured Wall Street on January 31, saying: "Government should not decide the compensation for America's corporate executives. But the salaries and bonuses of CEOs should be based on their success at improving their companies and bringing value to their shareholders."
U.S. Rep. Barney Frank, who chairs the House Financial Services Committee, is pushing for legislation to require shareholder approval of executive compensation plans.
In terms of pay at the wirehouse broker-dealers, Merrill Lynch CEO Stan O'Neal came in on top with a reported $48 million in 2006. That is up 30 percent from 2005 and brought him in just below the head of Goldman Sachs, Lloyd Blankfein, with $54 million. Merrill's corporate earnings grew about 47 percent in '06 vs. '05.
Robert McCann, president of Merrill's global private client division with nearly 16,000 advisors worldwide, earned $23 million in 2006, a reported increase of 28 percent over 2005.
Global private client grew revenue 11 percent in 2006. And some credit, analysts say, can go to Merrill's Focus on Growth bonus plan. "The idea is to get the sales force to grow [results] faster than they would otherwise," explains Andy Tasnady, general manager of Tasnady Associates in Port Washington, N.Y. "It's in its third year [in 2007] and seems to be working reasonably well."
