On Wall Street, It’s Good to Be a Director

BY WILLIAM ALDEN

There is one job on Wall Street for which pay has continued to rise since the financial crisis: board member. Compensation for directors at the nation’s biggest banks has ticked up even as the banks themselves have reined in salaries and bonuses, DealBook’s Susanne Craig reports.

The directors of Goldman Sachs, who are the best compensated of any big bank board members in the United States, made $488,709 on average in 2011, up more than 50 percent from 2008, according to the compensation data firm Equilar. Goldman defends the board’s pay by saying the bulk of compensation is in stock that directors cannot touch until they leave the board, aligning their interests with those of shareholders. “More broadly, banks and compensation experts say, financial firms must now pay a premium to entice and keep qualified directors,” Ms. Craig writes. But some on Wall Street argue that increased regulation has actually limited what a bank’s board can do. “About the only thing bank directors have more of these days is meetings,” joked one senior Wall Street executive who has frequent interaction with his board. “Regulators have all but stripped boards of the main powers they had before the crisis.”

At Goldman, which is expected to release fresh pay data in the coming weeks, the board’s compensation is likely to rise for 2012 because the firm’s shares rose more than 35 percent last year, Ms. Craig notes. “After Goldman, Morgan Stanley’s director pay is the second highest on Wall Street, with an average of $351,080, roughly the same as it was in 2008 but much higher than the pay at bigger and more complicated rivals like JPMorgan Chase and Citigroup.”

A TOP MANAGER AT SAC IS ARRESTED  |  Michael S. Steinberg was a trusted lieutenant of Steven A. Cohen, having joined Mr. Cohen’s hedge fund, SAC Capital Advisors, when it was still a rising star on Wall Street. He led a charmed life, earning tens of millions of dollars and taking part in philanthropy. But he was arrested on Friday, becoming the most senior SAC employee to be ensnared in the government’s insider trading investigation, DealBook’s Peter Lattman writes.

He is among nine current or former SAC employees to have been linked to insider trading while at SAC. But Mr. Steinberg stands out. In an unusual move, SAC issued a statement in support of the portfolio manager: “Mike has conducted himself professionally and ethically during his long tenure at the firm. We believe him to be a man of integrity.”

Mr. Steinberg, 40, pleaded not guilty on Friday and was freed on $3 million bail. “Michael Steinberg did absolutely nothing wrong,” his lawyer, Barry H. Berke, said in a statement. “Caught in the cross-fire of aggressive investigations of others, there is no basis for even the slightest blemish on his spotless reputation.”

WEIGHING ALTERNATIVES FOR DELL  |  A proxy statement filed by Dell on Friday sheds light on the process of fielding interest from a range of possible bidders for the company. “Buried in one of the filing’s exhibits is a presentation that JPMorgan Chase bankers delivered to a special committee of Dell’s board on Jan. 18,” DealBook’s Michael J. de la Merced writes. Bids from the Blackstone Group and Carl C. Icahn would involve leaving a portion of Dell publicly traded, in contrast to the $24.4 billion takeover bid by Michael S. Dell and Silver Lake. But in that presentation, JPMorgan Chase bankers said alternatives to a full take-private could limit the company’s financial flexibility.

Advisers to Dell directors spoke to 71 potential bidders during the company’s 45-day “go shop” period, the filing shows. Among the parties to have circled the computer maker were Kohlberg Kravis Roberts and TPG Capital, Mr. de la Merced reports.

ON THE AGENDA  |  In Britain, the Financial Services Authority is split into separate regulators. The ISM manufacturing index for March is out at 10 a.m. David Tisch, co-founder of TechStars NYC, is on Bloomberg TV at 2 p.m.

WHY BAD DIRECTORS STAY IN PLACE  |  “You really couldn’t have a stronger case for removing directors” than Hewlett-Packard, Michael Garland, executive director for corporate governance in the New York City comptroller’s office, told James B. Stewart, a columnist for The New York Times. And yet, all 11 of H.P.’s directors were re-elected on March 20. Mr. Stewart writes: “H.P. is hardly an isolated case. According to Patrick McGurn, special counsel for one of the major shareholder advisory services, Institutional Shareholder Services, shareholder efforts to remove directors in uncontested elections rarely succeed or come close, even in egregious circumstances.”

PARSONS ENVISIONS A JAZZ REVIVAL  |  Richard Parsons, a former chairman of Citigroup, who is working to reopen Minton’s Playhouse in Harlem, told The New York Times about his early memories of jazz. As a teenager growing up in Bedford-Stuyvesant, Brooklyn, he took his senior prom date to the Hickory House restaurant in Manhattan to hear the Billy Taylor Trio, an evening he remembers as his “first true adolescent experience.”

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