President Obama told BusinessWeek yesterday that he doesn’t “begrudge” the CEOs of JPMorgan Chase and Goldman Sachs their multi-million-dollar bonuses.
“I know both those guys; they are very savvy businessmen,” Obama said. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free-market system.”
Jamie Dillon, the CEO of JPMorgan, received a $17 million bonus; Goldman CEO Lloyd Blankfein got $9 million. As BusinessWeek points out, both companies have repaid their government bailout money.
Obama did say he wanted to see more shareholder say over executive compensation.
“That serves as a restraint and helps align performance with pay,” he said. “Shareholders oftentimes have not had any significant say in the pay structures for CEOs.”
Late Update: Greg Sargent has a more complete White House transcript of the interview. Here it is:
QUESTION: Let’s talk bonuses for a minute: Lloyd Blankfein, $9 million; Jamie Dimon, $17 million. Now, granted, those were in stock and less than what some had expected. But are those numbers okay?
THE PRESIDENT: Well, look, first of all, I know both those guys. They’re very savvy businessmen. And I, like most of the American people, don’t begrudge people success or wealth. That’s part of the free market system. I do think that the compensation packages that we’ve seen over the last decade at least have not matched up always to performance. I think that shareholders oftentimes have not had any significant say in the pay structures for CEOs.
QUESTION: Seventeen million dollars is a lot for Main Street to stomach.
THE PRESIDENT: Listen, $17 million is an extraordinary amount of money. Of course, there are some baseball players who are making more than that who don’t get to the World Series either. So I’m shocked by that as well. I guess the main principle we want to promote is a simple principle of “say on pay,” that shareholders have a chance to actually scrutinize what CEOs are getting paid. And I think that serves as a restraint and helps align performance with pay.
The other thing we do think is the more that pay comes in the form of stock that requires proven performance over a certain period of time as opposed to quarterly earnings is a fairer way of measuring CEOs’ success and ultimately will make the performance of American businesses better.
