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CEO pay: Tim Cook vs Jamie Dimon

Joe Belfiglio

Big bank bonuses are back. JPMorgan Chase (JPM), CEO Jamie Dimon took home a hefty $20 million salary in 2014. Not to be outdone, Goldman Sachs (GS) CEO Lloyd C. Blankfein pocketed $24 million.

Yahoo Finance senior columnist Mike Santoli thinks the big paydays, especially the cash portions, are a flashback to the pre-financial crisis era.“$20M sounds like a lot especially when you consider bank profits are not spectacular. Everyone hates banks. You would have thought compensation would come down for bank CEOs.” Instead, Dimon received his first cash reward since 2011. Blankfein’s cash percentage was also more than what he received the previous four years.

The big cash payments come after Wall Street banks changed the way they award executive compensation after the financial crisis. To safeguard against risky executives looking to profit short-term, banks reduced cash awards and began compensating more with stocks that were vested over years.

Also reported this week, Apple (AAPL) CEO Tim Cook earned $9.2 million last year. At first glance, his salary doesn’t stack up against Dimon or Blankfein’s. Yahoo Finance contributor, Aron Pinson dug deeper and crunched the real numbers. He found that Tim Cook actually made over $100 million in 2014. More than $90 million of which came from his vested stock. A large portion of Cook’s earnings are from the nearly $400 million in stock awards he received when Apple hired him as CEO in 2011.

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Santoli says, Cook’s earnings are a prime example of the cultural difference between Silicon Valley and the Financial World. “In Silicon Valley what you do is load up your people with stock and hopefully over the long term you ride the value of that stock to tremendous riches. Basically it’s a cosmetic thing.” Silicon Valley uses the “equity culture” as a recruiting tool to land potential employees. “You have to gross them up tremendously with stock as soon as they walk in the door. The younger tech companies are in that mode of essentially getting a ton of equity up front and looking to turn a massive overnight revaluation into a higher IPO,” says Santoli.

When it comes time to determine how much executives should earn Santoli says board members think: “It doesn’t look good if we’re not paying the CEO we say is the right person for the job as much as the other CEOs are getting paid. Nobody, no board sits there and says 'we have a below average CEO so we’re going to pay him less than the average.' That’s why everybody ends up getting paid more. The numbers get dragged higher.”

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