Interactive graphic: Bank CEO pay 2009

When the Financial Times decided in late 2009 to conduct its inaugural survey of bank chief executive pay, the industry had already become a political punching bag for making big profits barely a year on from the worst financial crisis in generations.

At the time, it was difficult to predict how industry figures such as Lloyd Blankfein, CEO of Goldman Sachs, or HSBC head Michael Geoghegan would respond to unprecedented levels of criticism over pay as the City of London’s and Wall Street’s recoveries surged ahead of Main Street’s.

The FT survey reveals that, while many bank chief executives accepted vastly reduced payouts in an effort to defuse mounting public and political anger, those cuts were far from universal. According to data compiled for the FT by Equilar, the executive compensation research firm, CEO pay at 17 leading US and European banks dropped 57 per cent, from an average of $14m in 2008 to just over $6m in 2009.

But in spite of the febrile climate, the CEOs of five of the 17 banks surveyed received significant pay increases in 2009, with two – Deutsche Bank’s Josef Ackermann and Credit Suisse’s Brady Dougan – each notching up gains of more than 500 per cent.

The results are likely to make for confusing reading for b*mintoank shareholders attempting to link pay with performance.

Explore the bank CEOs and their pay in our interactive graphic.

Methodology

To examine chief executives’ pay in the US and European banking sector, The Financial Times asked Equilar, an executive compensation research firm, to compile and analyse pay data from corporate filings with US regulators.

For each CEO studied, total annual pay includes base salary, cash bonus payouts, the grant-date value of stock and option awards, and other compensation. Other compensation typically includes benefits and perquisites.

For companies based in the United States, base salary, cash bonus, and other compensation values are collected from the Summary Compensation Table of each firm’s annual proxy statement.

For companies based outside the U.S., which include firms located in France, Germany, Italy, Spain, Switzerland, and the United Kingdom, Equilar collected pay data from the director and management remuneration section of each company’s annual report. The structure of these documents varies from country to country, which has been noted where applicable.

All values disclosed in currencies other than US dollars are converted into US dollars using the average daily exchange rate for the fiscal year in which compensation was paid. Data disclosed in US dollars were not adjusted by Equilar, regardless of a company’s location.

Grant-date values for equity awards represent the estimated value of new service-based and performance-based stock and option awards. Although companies disclose these values, there is no guarantee that an executive will actually realise the amounts shown. An executive may earn more or less depending on stock price movements and the achievement of vesting requirements or performance goals.

Furthermore, Equilar’s analysis reports equity awards in the fiscal year they were granted. In some cases, companies grant equity awards at the beginning of each fiscal year based on perform-ance in the prior fiscal year. As a result, equity awards granted in a fiscal year should not necessar-ily be viewed as indicative of corporate performance in the same year.

Whenever grant-date values are not provided for option awards, Equilar values awards using the Black-Scholes methodology, inputting the company’s own option valuation assumptions.

The change in pay percentage for each ceo represents the percentage increase or decrease in total pay from fiscal year 2008 to fiscal year 2009. Total compensation data for fiscal year 2008 were collected in the same manner described above. For recent hires or newly promoted chief executives, change in pay is listed as ‘n/a’.