# Why people hate banks



## sags (May 15, 2010)

On the same day that BMO announce they are laying off 60 people, they released the compensation packages for their executives.

The CEO gets a 12% increase to over 7 million. That is a 51% increase in 2 years.

And lest the other banks be forgotten, they make about the same.

Shame on them for demanding the money........and shame on us for listening to them whine when higher taxes on the wealthy are the topic of discussion.

Oh yea I forgot.........they are "job creators" and they give a lot to the ballet.

http://www.theglobeandmail.com/glob...Business+(The+Globe+and+Mail+-+Business+News)


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## Jungle (Feb 17, 2010)

The last dividend increase was in 2007.. give some money back to the shareholders instead of the CEO.


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## Beaver101 (Nov 14, 2011)

Why should they and who is going to make them (CEOs) take a lesser compensation? FWIW, this is known as the age of "entitlement" for the elitists.


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## Sasquatch (Jan 28, 2012)

If you want qualified people, you have to pay the going rates 

What a crock of ****


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## sags (May 15, 2010)

TD Bank CEO gave an interview on CNN claiming Canadian banks don't need further regulation or oversight, as they are more prudent lenders because they keep mortgage loans on their own books, and that they have a friendly relationship with regulators.

He forgot to mention CMHC backing, and the fact that TD Bank insured most of their mortgage portfolio recently for insurance coverage.

These guys, Canadian or otherwise, live in their own insulated world, coddled by governments and with the unimpeded ability to take whatever they want from the share holders and customers.

Recent letters from the TD...........they are raising the cost of safety deposit boxes and introducing fees for written copies of statements.

Their greed knows no boundaries.........


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## KaeJS (Sep 28, 2010)

I don't understand what the big deal is.

What's the difference between a bank, oil company, big box store, or a merchandiser/retailer?

They are all making money off of people.

That is capitalism.

a $11.4M annual salary for the CEO of a company that brings in $4B a year is really a drop in the bucket. How is it affecting business or shareholders? What are shareholders gonna do with $11.4M?

It's 0.285% of the total profits..... big deal.


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## ramy98 (Sep 20, 2009)

Banks only care about themselves; they can have a new product that offers a better rate of return on deposits and they will not bother to let customers know of these products as they are in other products that pay less interest on deposits.... Thats the banks; lets not go into the mobile phone service providers....


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## KaeJS (Sep 28, 2010)

All businesses are the same.

The banks are public corporations. Everyone is entitled to own common stock if they wish. There is really no reason to hate the banks.

It's your responsibility to keep up with the new products, read the fine print before signing documents, and manage your finances well. If you are angry about how much profit they make - buy some common stock and own part of the bank yourself. (As I said above, the salaries in the range of $11M I'm sure only matter to a certain small amount of shareholders. $11M isn't going to make or break anything.)

The problem is that people don't know how to use banks to their advantage. They go out and buy a car on a loan, then get angry the bank makes profit.  Doesn't make any sense.

If you buy what you can afford on a credit card or with cash and pay off the credit card each month, what do you even need the bank for? Most banks have some type of a minimal plan where you can keep around $1k and you won't be charged any fees. For most people on this forum, $1k is a drop in the bucket.

The banks create and hold jobs while providing liquidity and services. The banks also donate a lot of money to charity, which a lot of people never stop to think about. Banks always give back to the community.



> *The 2011 BMO Employee Giving Campaign set new records for donations*, pledges and participation, with *BMO and its employees directing over $19.1 million to local United Ways* and other charities across North America with the participation of nearly 35,000 employees. Further, *BMO employees volunteered at hundreds of charities in communities across Canada and the U.S.*
> 
> *For more than 194 years,* BMO Financial Group has believed in community reinvestment and corporate and social responsibility in the communities it serves.* In 2011, BMO contributed more than $66.4 million* in donations, sponsorships and events in Canada and the United States to groups, organizations and programs that help build and sustain resilient, vital and healthy communities.


http://newsroom.bmo.com/press-releases/bmo-and-its-employees-set-records-in-2011-employee-tsx-bmo-201201260761397001

I'm more concerned about the loafters of society feeding off of my tax dollars while they sit at home all day in a wifebeater eating Doritos, watching TSN replays and taking hits from the bong.


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## Dmoney (Apr 28, 2011)

I second the point that this is no different than any other business exec's compensation. If you don't like it, go with a credit union, or other free alternative.

I bank with PC Financial and haven't paid a cent in banking fees. As soon as they start chargin, I walk. I don't care that bank CEOs are making more than me. Sure I'm a little jealous, but part of the reason that CEOs get paid so much is to give people something to shoot for.

Do you think KaeJS is going to work very hard at BMO if the highest paid position is making $150K/year? It's like a lottery. Everyone knows their chances of becoming CEO are very slim, but will take an incredible amount of work. So if the reward isn't enticing enough, the pyramid collapses, and no one will try as hard on the way up.


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## HaroldCrump (Jun 10, 2009)

Dmoney said:


> I second the point that this is no different than any other business exec's compensation.


^ Agreed.
The compensation of the top bank execs is no more (or less) outrageous than what we pay to our top civil servants, senators, and bureaucrats, relatively speaking.
If $11.4M is too much to pay for managing a mega billion dollar, globally diversified, complex organization in a tough market is too much, then so are the hundreds of thousands we pay to paper pushers in pay, benefits and pensions.


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## financialnoob (Feb 26, 2011)

I don't think anyone is denying that the CEO of BMO deserves a decent salary.

But surely we can all agree that it looks pretty terrible that the announcement of a double-digit raise on the same day 60 people are laid off looks pretty terrible. Surely there is someone making a huge salary somewhere on the payroll who should figure that out. If not, I'd be happy to apply to fill that position, perhaps VP of Common Sense. 

With regards to how it's no different than any other CEO compensation, that's part of the problem over the past few decades. The average CEO compensation in 1980 was 40 times more than the average worker. In 1989, it was 72 times. In 1999, it was 310 times.

The median pay for a CEO in America in 1989 was less than $2.5M. Within a decade, it rose to over $10.7M, more than quadrupling in a decade. 

Again, no one is saying a CEO doesn't deserve to be compensated for their hard work, but if there's nothing really specific to point to, no brilliant decisions made, and it's simply a matter of "all CEOs get paid a lot," then is it really worth it? If you could replace that person with someone else for half the price and get the same results, then is that person really deserving of that compensation?


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## LondonHomes (Dec 29, 2010)

On the other hand, a lot of professional sports players and other celebrities make far more than the CEO of BMO. 

Shouldn't we hate them too?


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## GreenAvenue (Dec 28, 2011)

I bought the car my neighbour always wanted to have. So I parked it in his drive way. Now he hates me.

[Where does all this hating end? It's amazing how much information we now receive through tons of media, things that were always there or always happening but weren't aware of, don't you think? Next time you vote think about this. Or talk to someone in power, like a MLA. I bet most people 'hate' what they are told to hate, i.e. media]

I hate banks because they make a ton of money and perform lousy, even when I complain about it.


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## Toronto.gal (Jan 8, 2010)

Hate is a wasted emotion; I own shares instead!


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## the-royal-mail (Dec 11, 2009)

Another way to deal with this is not to become obligated to them by way of debt. If you want something other than a house, save up the cash and then buy it!


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## Four Pillars (Apr 5, 2009)

Toronto.gal said:


> Hate is a wasted emotion; I own shares instead!


+1

Bitching about something is useless.


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## carverman (Nov 8, 2010)

the-royal-mail said:


> Another way to deal with this is not to become obligated to them by way of debt.* If you want something other than a house, save up the cash and then buy it*!


Isn't that a form of regression back to the 50s? How can a family of 2 to 4
save anything to buy it with their savings, unless they can live for free somewhere?

Ok, maybe you can do that with furniture or appliances..but a car these days takes a big investment
of 25K+ even for a little puddle jumper. What is the family going to do for transportation..unless
they continue to drive a clunker and pour a lot of money into repairs..which will undermine their
saving for a new car.


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## sags (May 15, 2010)

They were talking about bank CEO compensation on BNN today.

The stock charts showed no relationship to rising CEO compensation and dismal stock performance.

Finance Minister Jim Flaherty is responsible for a whole lot more than a bank CEO...........and he doesn't earn 11 million a year.


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## HaroldCrump (Jun 10, 2009)

sags said:


> Finance Minister Jim Flaherty is responsible for a whole lot more than a bank CEO...........and he doesn't earn 11 million a year.


I hear you, I understand what you are saying.

But to a large extent, executive compensation is based on industry practices and what the stakeholders (i.e. shareholders in this case) are willing to tolerate.
Executives will push it as far as they can.

It is the same in the case of public sector and government official compensation.
They will push it as far as they can.

Just as CEO compensation is based on the company's ability to pay, govt. official compensation is based on the stakeholders' (i.e. tax payer) ability to pay.
We can argue whether or not Minister Flaherty should make $11M or more or less, but as tax payers our ability to pay is rather limited these days.

But have no concerns for Minister Flaherty's retirement - I am sure it is well taken care of.


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## KaeJS (Sep 28, 2010)

GreenAvenue said:


> I bought the car my neighbour always wanted to have. So I parked it in his drive way. Now he hates me.


I wish somebody would videotape something like this.

It would be an instant hit.....

See you later CMF. KaeJS has left the forum to go make a viral video.


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## kcowan (Jul 1, 2010)

Four Pillars said:


> +1
> 
> Bitching about something is useless.


But it can also be cathartic!


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## Four Pillars (Apr 5, 2009)

kcowan said:


> But it can also be cathartic!


Good point. Maybe it's not completely useless.


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## Eclectic12 (Oct 20, 2010)

sags said:


> On the same day that BMO announce they are laying off 60 people, they released the compensation packages for their executives.
> 
> The CEO gets a 12% increase to over 7 million. That is a 51% increase in 2 years.
> 
> ...


As much as I don't like it, IMO there are bigger fish to fry. 

Four examples include:

a) While Nortel was tanking, former CEO Roth collected his $6 million / year salary as a "consultant" or similar vague title.

b) A merchant bank was profiled by the National Post, where managers and above could request a "special rate loan". If they later decided they "couldn't afford" to pay the loan back, the bank would write-off the loan *and* kick in the taxes due as the loan had become a "taxable employee benefit". 

c) A Canadian forms company was tanking and decided to specially recruit a CEO from the US, as the board thought an American would make the "hard decisions". The CEO lasted nine months, the company kept tank - probably in part due to the $20+ million dollar severance.

... last but not least ...

d) privatization of Hydro. The Ontario gov't felt the heat from the public, flip-flopped on the IPO then joined the media circus to tar and feather CEO, Eleanor Clitheroe. Since the compensation package and "perks" were all compensation board approved - I guess the gov't had no choice but to pass legislation preventing a lawsuit.

http://www.canadianbusiness.com/article/16618--an-apology-for-eleanor-clitheroe
http://www.thestar.com/news/gta/art...ead-fights-to-increase-25-000-monthly-pension



Cheers


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## JustAGuy (Feb 5, 2012)

closed my bank of montreal account today
switched to ing in the shortrun, but most likely will switch again to PC financial


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## Eclectic12 (Oct 20, 2010)

financialnoob said:


> I don't think anyone is denying that the CEO of BMO deserves a decent salary.
> 
> But surely we can all agree that it looks pretty terrible that the announcement of a double-digit raise on the same day 60 people are laid off looks pretty terrible.
> 
> ...


I disagree ... getting paid like Hurd $24.2 million while laying off 6,400 and then getting an estimated $40 million parachute after being investigated for sexual harassment seems worse.

Or maybe laying off 16,000 and having a $33 million parachute, with total compensation of almost $50 million.

http://www.msnbc.msn.com/id/3893505...eos-lay-thousands-rake-millions/#.T01sxIc7V5s
http://www.resumark.com/blog/sergey/the-10-highest-paid-ceos-who-laid-off-the-most-employees/


And what is also appalling is that at lower levels, some companies routinely apply one method to the workers and another to management.


Trivia: 

I liked the German company that closed the car hinge factory as "it was inefficient" and reneged on the severance. Apparently it's so inefficient that Ford and GM are paying the workers to keep producing hinges.


Cheers


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## Eclectic12 (Oct 20, 2010)

HaroldCrump said:


> [ ... ]
> 
> But to a large extent, executive compensation is based on industry practices and what the stakeholders (i.e. shareholders in this case) are willing to tolerate. Executives will push it as far as they can.
> 
> [ ... ]


IMO, it's based on a combination of what the particular company's compensation board thinks is "industry practice" and the executive's negotiating skills.

As small shareholder, the best I get is to read bits and pieces in the Annual report. And even if I disagree, there are far too many institutional investors controlling far more stock than I. The only place I've read of real action is if a deep pocketed activist shareholder buys into the company, big time.


Cheers


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## HaroldCrump (Jun 10, 2009)

Eclectic12 said:


> As small shareholder, the best I get is to read bits and pieces in the Annual report. And even if I disagree, there are far too many institutional investors controlling far more stock than I.


And that is no different than how much control you and I as tax payers can exercise over public sector compensation.
We are 1 vote each, just as in the case of corporation executive compensation.

My point is that private corporation executive compensation is no more, or less, outrageous than some of our public sector compensation plans (relatively speaking) and as individual shareholders and voters we have little control over this.


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## sags (May 15, 2010)

To debate public service compensation, I think there would need to be clarification on what the term means.

When I consider a hospital environment, I would agree that administrators often earn more than they probably should, but would not agree that nurses or ward clerks are overpaid.

When I consider the judicial system, I would agree that judges who do little more than remand court dates all day and earning 250,000 per year are probably overpaid, but would not agree that the court clerk earning 40,000 per year is overpaid.

I don't thnk paramedics are overpaid, but some doctors are.

I don't think teachers are overpaid, but the executive levels of the school boards are.

But when the cuts come...........invariably, it will be the lowly paid, front line worker who will be eliminated first, which will create the most disruption of service for the least amount of savings.


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## financialnoob (Feb 26, 2011)

LondonHomes: One could easily argue that pro athletes and celebrities do make a ridiculous amount of money, though that doesn't necessarily justify what some CEOs make. 

Harold: Executive compensation isn't just based on what stakeholders are willing to tolerate. Boards are often filled with former CEOs with a vested interest in seeing Executive compensation increase. 

And while I can understand a bit of the frustration with the public sector and government official compensation, I think some context is necessary here. In 2003, Canada's public service force employed around 235,000 people for a total of $12.5B, an average of around $53K. Comparing that to an individual CEO making over $7M a year doesn't quite seem like an equal frustration.


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## Dmoney (Apr 28, 2011)

The big difference between CEO compensation and public sector compensation is that *I'M* not paying CEOs. I don't care what BMO, Magna, or Roger's pay their CEOs, because I don't pay for any of their services, so not a single penny of mine goes into their pockets. I don't care that pro athletes make $20+ million each year, because I don't pay to watch them play.

I care that a teacher makes 95K because it's *MY* money that pays them. The more a healthcare worker makes correlates directly and inversely to the amount of money I take home at the end of the year. Same with MPs, firefighters, police officers and the list goes on.

We can vote with our wallets for any private sector entity we don't like. Nike uses sweatshops? Buy Adidas. L'Oreal tests on animals? Use Body Shop products. BMO overpays their CEO? Use a credit union. Air Canada treats you like crap? Fly Porter.

Postal workers make too much? With or without your business, they'll earn the same. Teachers can't teach for crap? Who cares, even if you go to private school, you're still paying their salary. Transit workers earn more than you for sitting down watching you put tokens in a slot? Tough luck.


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## Eclectic12 (Oct 20, 2010)

Dmoney said:


> The big difference between CEO compensation and public sector compensation is that *I'M* not paying CEOs. I don't care what BMO, Magna, or Roger's pay their CEOs, because I don't pay for any of their services, so not a single penny of mine goes into their pockets.
> 
> [ ... ]
> 
> ...


Not a single penny?

This would mean you have no business with CIBC and don't contribute to their profits. The first part is only true in a direct sense and the second part is false. I hate to be bearer of bad news but earlier you posted that:


> _I bank with PC Financial ..._


which Loblaws pays CIBC to run for them.



> The President's Choice Financial MasterCard is provided by President's Choice Bank, while *banking services are provided by the direct banking division of CIBC.*


You may paying no fees to Loblaws but they are making money off of your account and paying part of it to CIBC. 

BTW, the CIBC CEO collected total compensation of $9.34 million in 2010, according to the Mar 2010 annual report.


IMO, the voting with the wallet is a lot more difficult than one would think.


Cheers


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## Dmoney (Apr 28, 2011)

Eclectic12 said:


> Not a single penny?
> 
> This would mean you have no business with CIBC and don't contribute to their profits. The first part is only true in a direct sense and the second part is false.


That's why CIBC wasn't included in that list . 

I also have a CIBC chequing account (no fees) that you could argue generates a small amount of income for the bank. No mortgage, loans etc., so the revenue they earn off of me is minor.

That being said, if CEO compensation was a significant enough deterrant, I would find a way to do business elsewhere. As it is, I'm looking for the best deal for myself, not any sort of idealistic alternative. 

Are CEOs vastly overpayed? Often, yes. Do I have any control over it? No. Does it affect my life? I'd argue the impact is negligible.


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## RichmondMan (Jan 31, 2011)

Because banks hold their money and move with them without approvals of owners. My grandfather said who has a big pot of money, he starts to dictate the rules.


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## Eclectic12 (Oct 20, 2010)

Dmoney said:


> That's why CIBC wasn't included in that list .
> 
> I also have a CIBC chequing account (no fees) that you could argue generates a small amount of income for the bank. No mortgage, loans etc., so the revenue they earn off of me is minor.
> 
> ...


Fair enough that the revenue will be minor.

My point is that in a inter-connected world, it is more and more difficult to avoid completely a particular business.


Cheers


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## Square Root (Jan 30, 2010)

Stop bitching and buy the shares. I did and have made millions. News flash: Banks are businesses that try to make money. I feel the same way about telco's. They are often exasperating to deal with but are still good investments. I know many senior bank execs and they are invariably intelligent, hard working, community oriented people. Bank bashing seems to be a uniquely Canadian sport?


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## HaroldCrump (Jun 10, 2009)

financialnoob said:


> And while I can understand a bit of the frustration with the public sector and government official compensation, I think some context is necessary here. In 2003, Canada's public service force employed around 235,000 people for a total of $12.5B, an average of around $53K.


The public sector has grown by leaps and bounds since then, esp. in socialist provinces like Ontario.
Also, what levels of govt. are you including in "public service"?
What about provincial and municipal governments?
What about crown corps?

The rate of growth in overall public sector employment is probably a mirror image of the growing unemployment in the private sector.
The govt. is trying its best to keep pace with increasing unemployment by hiring more and more public sector workers, paid for by the remaining tax payers.
This is hidden unemployment.



> Comparing that to an individual CEO making over $7M a year doesn't quite seem like an equal frustration.


But you are comparing gross salaries.
Esp. of low to mid line public sector workers with a top line private sector CEO.
Public sector compensation takes many shapes and forms, including benefits, pensions, etc.
Adjusting for scale, I don't think it is reasonable to single out private sector over-compensation while ignoring similarly blatant public sector over-compensation.

In his post above Dmoney explained very clearly why public sector compensation matters.


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## Toronto.gal (Jan 8, 2010)

Square Root said:


> Stop bitching and buy the shares.


Ditto! 

Get shares & get paid.


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## financialnoob (Feb 26, 2011)

Those are all fair points Harold and Dmoney, I don't disagree. I just think the optics of a millionaire getting a significant raise on the same day people are being laid off goes beyond ridiculous.


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## Eclectic12 (Oct 20, 2010)

HaroldCrump said:


> [ ... ]
> 
> But you are comparing gross salaries.
> Esp. of low to mid line public sector workers with a top line private sector CEO.
> ...


And the compensation for the CEO also takes many shapes and form such as equity grants/options, supplemental pensions to make up for the "capped" pension that the regular workers have to live with, etc. etc. 

Then too, the CEO is the tip of the iceberg. There's lot of VPs and board members in the mix as well.


I am confused though, as to what your position is.


I find it odd that your first post seemed to agree with others whose posts implied the CEO was not over-compensated.

Yet in this post, you are unhappy that only one type of over-compensation is being highlighted.

I'm curious if you think the bank CEO is over-compensated. It seems clear you believe the public sector is.


Personally - I'd prefer if both types were addressed.


Cheers


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## Cal (Jun 17, 2009)

Square Root said:


> Stop bitching and buy the shares.


Best quote on here yet!

So true though isn't it.


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