We've been discussing compensation ratios quite a bit as of late. Goldman Sachs (GS) certainly made headlines by cutting its compensation-to-revenue ratio to 45 percent for the fourth quarter from around 50 percent in the first quarter--which may have been tough news for employees but good for shareholders, as earnings soared.

But as a whole, big banks have been less kind to shareholders on this issue. The New York Times notes that big banks paid out 90 percent of revenue in compensation. At Citigroup (C), the bank paid so much, it wiped out all its profits. Bank of America (BAC) paid out 88 cents of every dollar in revenue in compensation. At Morgan Stanley (MS), the figure was 94 cents. At the other end of the spectrum, Goldman Sachs paid out 45 cents, while JPMorgan Chase (JPM) paid out 63 cents.

Shareholders may raise a stink about this later, but I doubt it will amount to much. Shareholders are used to their spot in the pecking order. The other issue is whether this will really help the likes of Citigroup and Bank of America compete against Goldman Sachs and JPMorgan.

For more:
- here's the article

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