Bank executives witnessed an increase in their compensation in 2023, while ordinary employees faced yet another year of modest bonuses.
This disparity was notably conspicuous at London-based lender Standard Chartered, where CEO Bill Winters experienced a 22 per cent increase in his pay package, as reported by Bloomberg.
The bank's 2023 earnings report disclosed that Winter's total compensation soared to approximately $9.9 million, marking a significant rise from $8.1 million in 2022.
This increment occurred despite a 1 per cent decrease in Standard Chartered's overall bonus pool, which amounted to £ 1.24 ($1.57) billion in 2023.
This news comes at a time when, in various parts of America, communities are witnessing the shutdown of bank branches, exacerbating concerns about financial inclusion and accessibility.
The top executives of major banks, including JPMorgan Chase, Bank of America and Wells Fargo, have reportedly enjoyed pay hikes ranging from 6 per cent to a staggering 22 per cent over the past fiscal year.
Critics argue that such increases, particularly in double digits, are out of touch with the economic realities faced by ordinary citizens, especially as many continue to grapple with the fallout from the pandemic.
This news comes alongside reports of the Bank of America, Wells Fargo and Citibank persisting in the closure of branches across the United States.
As indicated in the most recent weekly report detailing planned closures, the regulatory body overseeing them announced that the three institutions, in addition to the First National Bank of River Falls in Wisconsin, will collectively close a total of eight branches.
This has prompted calls for a reassessment of corporate priorities and a reevaluation of executive compensation structures.
The branch closures are not confined to any specific region but are dispersed across America, affecting both urban and rural communities.
This has prompted calls for a reassessment of corporate priorities and a reevaluation of executive compensation structures.
Data from the Office of the Comptroller of the Currency (OCC) reveals that dozens of banks submitted notices to close a total of 1,566 branches last year.
In stark contrast, they only reported plans to open 472 branches.
The last recorded increase in the number of commercial bank branches in the United States was in 2011, with the figure surpassing 85,000, according to FDIC data.
However, since then, the count of physical branches has experienced a consistent decline, settling at approximately 70,000.
A significant factor contributing to the reduction in physical branches is the banking industry's growing investment in apps and software, enabling the provision of remote banking services without the need for expensive brick-and-mortar locations.
The accelerated adoption of online banking was propelled by the COVID-19 pandemic, coinciding with an uptick in branch closures.
The impact is not just economic but extends to the fabric of communities, where bank branches often serve as more than just financial institutions, doubling as community hubs and sources of stability.
Critics argue that the closures disproportionately impact vulnerable populations, such as the elderly and those with limited access to technology.
"PNC closed our local branch, just three miles away, and now I have to travel to an adjacent city or across the river to Ohio for banking needs. It's inconvenient and, as a senior citizen, the extra mileage is wasting gas," expressed one individual.
Another reader in their early 80s highlighted the difficulty of driving long distances, stating, "This is distressing for both my husband and me. We've experienced several bank closures, forcing us to drive further and further to access our banks. What will happen when we are no longer able to drive?"
The move towards digital banking, while convenient for some, raises concerns about leaving certain demographics behind in a rapidly evolving financial landscape.
As the debate over executive pay and branch closures continues, the banking sector finds itself at a crossroads, facing growing scrutiny from both the public and policymakers.
