Inside the New Era of Mega Pay for U.S. Bank CEOs
•February 17, 2026
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Why It Matters
The heightened pay underscores how banks reward leadership during profit peaks, shaping investor sentiment, regulatory scrutiny and future compensation governance.
Key Takeaways
- •CEO pay now exceeds $40 million baseline
- •Compensation heavily weighted toward equity incentives
- •Shareholder votes continue to approve large packages
- •Pay rises align with record earnings and deal flow
- •Political scrutiny may intensify over Wall Street excess
Pulse Analysis
The latest compensation cycle for U.S. bank CEOs signals a structural shift rather than a one‑off spike. By anchoring salaries around a $40 million floor and loading the majority of payouts with stock‑based awards, boards are crafting a narrative that aligns executive wealth with shareholder returns. This design mirrors the post‑2008 era’s pay‑for‑performance ethos, yet the scale of today’s packages—exceeding $45 million for top leaders—marks a new high watermark that investors and regulators are watching closely.
Strong earnings underpin the pay surge. Bank of America’s 13% net‑income growth, Citi’s record‑setting revenues and Goldman Sachs’ investment‑banking rebound have generated the cash flow needed to justify hefty equity grants. Simultaneously, banks are touting AI‑driven cost discipline and strategic pivots, positioning executive compensation as a lever for long‑term transformation rather than short‑term windfalls. This dual focus on performance and technology investment creates a tension: while boards claim fiscal prudence, the optics of multi‑million raises amid workforce restructuring can fuel internal morale challenges.
For capital allocators, the implications are two‑fold. First, the willingness of shareholders to endorse these packages suggests confidence in current profit trajectories, but any downturn could quickly turn compensation into a governance flashpoint. Second, heightened political attention to “Wall Street excess” may prompt tighter regulatory scrutiny, potentially influencing future compensation caps or disclosure requirements. Investors therefore need to monitor not just earnings trends but also the evolving risk landscape surrounding executive pay as a proxy for broader sector stability.
Inside the New Era of Mega Pay for U.S. Bank CEOs
A pay cycle that feels eerily familiar
Strip away the glossy language from proxy statements and you’re left with something brutally simple: the top tier of U.S. bank CEOs is once again a $40 million‑plus club.
Bank of America’s Brian Moynihan now sits on a $41 million compensation package for 2025, a 17% jump, driven largely by equity awards rather than cash. Citi’s Jane Fraser has been moved up to $42 million, a 22% boost as the board effectively bets that her sweeping restructuring will finally close the gap with peers. And Goldman Sachs chief David Solomon now leads the pack at $47 million for 2025, up 21% year over year, thanks to a rebound in investment banking revenues and a resurgent share price.
In other words, the numbers no longer whisper. They shout.
The $40 million baseline: how we got here
Nobody in the C‑suite wakes up one morning and “discovers” that CEO pay has crossed a psychological threshold; compensation curves creep upward over several cycles, and then, suddenly, there’s a new floor. For big banks, that floor now appears to be roughly $40 million.
Moynihan’s package is telling. His base salary remains a comparatively modest $1.5 million, with the remaining $39.5 million delivered through equity incentives — a design choice that gives the board a clean narrative about pay‑for‑performance while still delivering headline‑grabbing totals. Fraser’s structure is similar: $1.5 million base, roughly $6.1 million in cash incentives, and the majority of the rest in deferred equity and performance share units that stretch several years into the future.
Solomon’s 2025 package, at $47 million, includes a flat $2 million base salary and $45 million in variable compensation, mostly in stock and performance‑linked units. Boards clearly want optics that say: you’re only rich if shareholders are richer. Whether that feels true to the average investor watching short‑term volatility is another conversation entirely.
Performance tailwinds: profits, trading, and deal flow
If you look purely at the scoreboard, the pay surge isn’t occurring in a vacuum. The top U.S. banks have posted their strongest collective earnings since 2021, powered by a mix of higher net interest income, resilient trading, and the return of large‑scale dealmaking.
Bank of America reported net income of about $30.5 billion, up more than 13% year over year, as rate dynamics and disciplined cost management padded the bottom line. Citigroup’s board, in justifying Fraser’s raise, pointed to record revenues across its five primary sectors, improved returns, and a 2025 share price performance that outpaced every other major Wall Street bank, with Citi stock rallying roughly 66%.
Goldman’s case is more old‑school Wall Street: a powerful recovery in investment banking, better trading conditions, and a reset of the firm’s consumer‑banking misadventures. Its board explicitly linked Solomon’s higher pay to a year in which the shares “soared” and his grip on the top job was reasserted after a period of internal friction.
For investors, the implicit trade‑off is straightforward: tolerate eye‑popping individual pay while the aggregate numbers work. That bargain tends to hold — until it suddenly doesn’t.
Echoes of 2006–2007: lessons remembered, or just archived?
Anyone who lived through the 2007–2008 arc will feel a disturbing resonance in these numbers. Back then, Goldman Sachs paid Lloyd Blankfein roughly $68.5 million for 2007, a record paycheck for a Wall Street chief at the time — just as the credit system was quietly cracking.
Lehman Brothers’ Richard Fuld pulled in about $40 million in 2007, the product of record profits and “limited” subprime losses, only to see the firm spiral into bankruptcy the following year; he exited with no severance or bonus, but the optics of his prior paychecks became a political lightning rod. Morgan Stanley and Bear Stearns leaders, facing mounting mortgage losses in late 2007, famously chose to forgo their year‑end payouts, a symbolic nod to the gathering storm that, of course, didn’t stop the storm.
The parallels aren’t perfect — capital ratios today are stronger, liquidity rules tougher, and risk governance far more institutionalized — but the pattern of rewarding peak‑cycle earnings with peak‑cycle pay is strikingly familiar. Cycles don’t repeat, as the saying goes. They rhyme.
Shareholders: grumbling at the margins, approving in the aggregate
It’s fashionable to talk about “investor pushback” on compensation, but when the votes are counted at most of these banks, pay packages pass with comfortable majorities.
Goldman is a case in point. Despite serious criticism of retention bonuses of roughly $80 million each for Solomon and President John Waldron — stock‑based awards designed to keep both men in place through at least the end of the decade — shareholders still backed the firm’s pay proposal last year. Proxy advisers raised eyebrows; investors largely shrugged and moved on.
Citi and Bank of America have also seen their executive compensation plans clear shareholder votes without existential drama, aided by the fact that much of the pay is deferred and linked to explicit performance hurdles. The governance conversation is happening, but it’s more low murmur than angry roar.
The AI and cost paradox: spend to save, pay to pivot
Here’s the twist: this compensation boom is happening while banks talk incessantly about cost discipline and technology‑driven efficiency. That’s not a contradiction so much as a tension boards are trying to manage in real time.
Bank of America has been explicit about using technologies, including artificial intelligence, to restrain expense growth even as it invests to expand the business. Citigroup pitches its transformation under Fraser as a multi‑year effort to streamline businesses, exit non‑core geographies, and modernize risk and control frameworks — work that isn’t cheap, but is supposed to make the organization leaner and more scalable.
Goldman, for its part, is tying a portion of Solomon’s compensation to long‑term performance areas like its carried interest program and growth initiatives, implicitly linking CEO pay to the success of strategic pivots rather than just one‑year trading windfalls. Still, for employees sitting under layers of restructuring and automation, hearing that the boss just got a 20%+ raise lands… awkwardly.
Risk, optics, and the political lens
Do these mega packages inherently increase systemic risk? Not directly. But they do shape behavior at the margin, especially when a sizable chunk of executive wealth is linked to share price and return metrics over relatively short windows.
Politically, the risk is clearer. Massive payouts, especially in an environment where consumers still feel bruised by inflation and higher borrowing costs, tend to draw scrutiny from lawmakers and regulators who haven’t forgotten the post‑2008 backlash. High‑profile CEO compensation — $47 million here, $42 million there — can become a shortcut symbol for “Wall Street excess,” fair or not.
And once that narrative hardens, it often becomes the backdrop for policy discussions on everything from capital rules to bank consolidation. Boards may tell themselves that “market” packages are simply the cost of doing business. Washington often hears something else.
What this means for investors and boards
For institutional investors, family offices, and wealth managers allocating capital across the big‑bank complex, the message embedded in the current pay cycle looks something like this:
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Boards remain comfortable granting large, performance‑weighted pay packages when earnings are strong and share prices cooperate.
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CEO compensation has effectively reset higher, with $40 million as a common reference point and upside toward $50 million when performance overdelivers.
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Shareholder votes continue to support these structures, but any sharp reversal in profitability, credit quality, or market conditions could rapidly turn pay into a governance flashpoint.
For bank boards, there’s a narrow path: reward and retain the leadership teams steering complex transformations — from AI adoption to business‑model overhauls — without losing sight of the reputational and political sensitivities that come with 2006‑era numbers. Getting that balance wrong doesn’t just show up in the headlines; over time, it can influence regulation, valuations, and even who’s allowed to do which businesses.
For senior executives, board members, and capital allocators, the message behind the numbers is stark: Wall Street has reopened the high‑pay era — and this time, the test won’t be whether compensation can climb during the good years, but whether discipline holds when the cycle turns.
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