Wells Fargo, Bank of America, Citigroup get $3 billion bonuses
Wells Fargo and Citigroup each got a record $3.5 billion in bonuses on Thursday, including $1.2 billion each from Wells Fargo.
Wells Fargo will get $2.5 million in cash bonuses from its existing contract with the government.
The bank’s CEO, John Stumpf, received a $2 million bonus for his work leading the company through the Great Recession.
Citigroup will receive $2 billion from its current contract with federal regulators.
The banking giant said it will also increase its compensation by an average of $600,000 for each of its chief executives.
In the last five years, Wells Fargo has earned $8.9 billion in profits.
The stock gained $3, or 5%, to $25.06 after the announcement.
Bank of the West said it expects to receive $1 billion in bonus cash from its new contract.
Bankrate.com reported that Citigroup CEO Vikram Pandit will receive an additional $1 million bonus in March.
Wells’ bonus is the largest of its kind to date for a CEO.
The bonus was announced Thursday in a conference call with analysts.
Wells and Citibank have been under pressure in recent weeks as regulators and regulators from both sides of the aisle have begun scrutinizing their performance during the Great Depression.
The banks have been criticized for taking money from customers during the recession.
In March, the Securities and Exchange Commission said Wells Fargo may have violated federal laws by paying billions of dollars in bonuses to employees during the downturn.
In April, Wells announced it would pay a $1,000 bonus to its CEO to mark the 30th anniversary of the 2008 financial crisis.
The agency’s move comes just days after Wells Fargo announced it was cutting more than 200 jobs in the U.S. and Canada.
Wells said the cuts will affect approximately 2,000 employees.
Wells was not immediately available for comment.
Bankers and analysts have criticized the banks for not doing more to rein in their bonuses.
They said Wells has been unable to stem the flow of cash from customers to the bank and is still trying to recover from the recession, which ended in September 2008.
Wells CEO Vikrant Pandit was criticized for paying more than $4 billion in cash to his executives while the Great Betrayal began in 2009.
In his letter to shareholders, Pandit said the bank had taken a “strategic decision” to reinstate cash bonuses for top executives in 2010.
Wells announced a similar $2,000 cash bonus to CEO Vikash Khosla in 2014, but it was cut to $1 a share in 2015.
Wells also cut a $400 million bonus to top executive David Mireles in 2015 and a $300 million bonus, for his first five years of tenure, to CEO John Stuckenbach in 2015, after a public backlash over bonuses.
Bankrates.com said the decision to cut the bonus was “a significant blow to Wells Fargo’s long-term ability to make strategic investments and remain competitive,” but said that it was also “a step in the right direction” to address the bank’s long term challenges.
Wells had not disclosed how it will pay the cash bonuses to its executives.
The company said that the company would provide a breakdown of how it would be paid in the next few months.
Wells is the fourth bank to be hit by a government investigation for its bonuses, which is the result of a federal judge’s ruling in November that regulators had wrongly awarded bonuses to a large number of executives.