Yes, the downside of making loads of money is the headache that comes with managing it.
Luckily for some bank execs, their expense accounts allow for hiring someone else to do their personal financial planning and tax services. The perk often costs the banks a pretty penny, according to the annual proxy reports filed so far this year.
While Ken Lewis's last year as chief executive at Bank of America was beset with problems, at least he was the spared the trouble of preparing his own taxes. Lewis may have received zero dollars for his 2009 services, but BofA was kind enough to pick up the $23,998 tab for his "tax preparation and financial planning" matters, according to the firm's proxy filing with the SEC.
The North Carolina-based bank also paid out the same amount for CFO Joe Price and Brian Moynihan, who was president of the consumer and small banking division before taking over Lewis's job.
In accordance with the Temporary Asset Relief Program's remuneration requirements set by pay master Ken Feinberg, each of the five highest-paid executive's fringe benes was limited to $25,000 for 2009.
That's a far cry from past years. In 2008, Lewis spent $18,401 on tax prep (his total perks tab ran to $275,125). This year, he passed on the car service and corporate jet, choosing to spend the bulk of his allowance on financial planning and the rest on home security and parking.
Goldman Sachs paid Ayco, a company-owned financial counseling for corporate executives, $57,230 to help CEO Lloyd Blankfein manage his financial affairs, according to firm's preliminary proxy filing. "Financial and benefits counseling services" were also provided to the other four executives listed in the filing. David Cohn, the firm's president and operating officer, submitted the most expensive expense report at $62,723.
San Francisco-based Wells Fargo set aside up to $20,000 for each of its five top executives to spend as they wish on perks like financial planning, car service, club dues and home security in 2009. The bank doesn't break down how much each banker chose to spend on what service, but four, including CEO John Stumpf, directed a portion toward financial planning expenses.
Meanwhile, Vikram Pandit, Citigroup's chief executive since December 2007, hasn't had the luxury of having the giant bank pay for much of anything outside his base salary (which was reduced to $1 this year). Let alone pay for his personal financial matters.
Citi hasn't foot the bill for any of its five senior execs' financial and tax planning since 2005, according to a review of the bank's proxy filings of the past four years. That year, the bank shelled out $85,714 for then chairman Sandy Weill and $8,800 each for three other executives.