Capital Ideas Blog


By Chelsea Vail

From: Blog

The latest results from the Financial Trust Index survey are in, and they aren’t kind to top corporate managers. Looking back to last fall, when JP Morgan reached a watershed $13 billion agreement with the Justice Department, and a separate $4.5 billion settlement with institutional investors, it seems Americans think the bank’s top managers did not pay dearly enough to end the several investigations and lawsuits brought against it in the wake of the financial crisis.

A full 70 percent of respondents said they thought it was unfair that JP Morgan managers would not have to give back any compensation for their mistakes, and 48 percent said the largest US bank should have paid more in penalties and settlements.

Figure 2: Management Compensation
Do you feel it is fair that managers will not have to give back any compensation for their mistakes?

Management compensation

The report, coauthored jointly by Chicago Booth’s Luigi Zingales and Northwestern Kellogg’s Paola Sapienza, has tracked trust across key financial institutions for the last five years. Around the same time as JP Morgan reached those settlements, Hal Weitzman sat down with Zingales and Chicago Booth’s Steven Neil Kaplan on an episode of our Big Question video series to discuss executive pay and income inequality. You can watch that here and join the conversation on Twitter using #BoothBigQ.


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