All NewsFebruary 19, 2026

Wall Street just revealed a $258 million pay secret

The bonus culture on Wall Street never really went away. After years of keeping a lower profile under regulatory pressure, bank chiefs are back to collecting massive paychecks, and the numbers revealed in early 2026 are hard to ignore.

Proxy filings published in January and February 2026 show the CEOs of the six biggest U.S. banks collectively pulled in $258 million in total compensation for the 2025 fiscal year, a jump of more than 21% from the prior year. That is the second-highest combined increase on record, trailing only 2021.

The disclosures have reignited a familiar debate: what exactly are banks rewarding, and what risks come with paying this much at the top?

Strong results give boards the cover they need

The pay surge does not come out of thin air. The six largest U.S. banks brought in nearly $600 billion in revenue last year, more than any year on record, with profits rising 8% from the year before.

The earnings boom was driven by several forces at once:

  • A surge in dealmaking, with 2025 recording the second-highest merger volume on record
  • Record trading revenues at Goldman Sachs (GS) and Morgan Stanley (MS), fueled by rate and currency volatility
  • Higher net interest income as loan spreads widened

When profits move higher on multiple fronts, compensation formulas tied to return on equity, earnings per share and total shareholder return almost automatically light up.

Most bank CEOs earn only a modest base salary. The real money comes through cash bonuses and equity awards that are tied, at least on paper, to performance targets.

In a strong year, those incentive plans can produce enormous payouts without any board explicitly deciding to raise pay. That is precisely what happened heading into 2026.

Top bank CEOs pay for fiscal year 2025, per SEC filings:

Photo by FABRICE COFFRINI on Getty Images

“$40 million appears to be the new benchmark for big-bank CEOs,” Shaun Bisman, a partner at Compensation Advisory Partners, told American Banker in January 2026.

Boards argue pay is about competition

It is not just about profits. Boards argue their CEOs compete against hedge funds, private equity and Big Tech for the same talent pool, and that gap has never been wider.

Senior banking executives who understand risk, regulation and global markets are in short supply. No board wants to be the one that loses a high-profile leader over compensation, especially heading into what could be another strong year for capital markets.

Related: Bank of America CEO drops surprising view on the economy

Supporters also point out that today’s bank chiefs run far more complex, more regulated institutions than their pre-2008 predecessors.

Capital requirements are higher, scrutiny is sharper, and the margin for error is smaller. If the job is harder and the talent pool is thinner, the market price should reflect that.

So is this 2007 all over again?

The echoes are hard to dismiss. Before the financial crisis, bank CEOs were richly rewarded for returns on equity that turned out to be built on thin capital and heavy risk-taking. When the cycle turned, shareholders and taxpayers absorbed the losses, while much of the pay stayed in executives’ pockets.

Banks insist the structure is fundamentally different now:

  • A larger share of pay comes in equity awards that vest over multiple years
  • Clawback provisions allow boards to recoup compensation in cases of misconduct or major losses
  • Some bonus components are now tied to risk metrics and regulatory feedback, not just headline profit

Skeptics are not fully convinced. If performance shares are pegged mainly to earnings and stock price over a three-year window, executives still have a strong incentive to favor actions that flatter near-term results. Cost cuts, buybacks and aggressive lending can all boost returns before their consequences become visible.

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True long-term alignment, critics say, demands more emphasis on risk-adjusted returns and credit quality across a full cycle, not just a bull market run.

What investors and workers should watch

For ordinary bank employees and customers, the optics are painful. Branch closures, back-office job cuts and persistent fees contrast sharply with the eight-figure pay packages being disclosed this February, and the gap between CEO pay and median worker pay has continued to widen.

For investors, the calculation is more nuanced. Well-structured incentive plans can encourage management to invest in technology and build durable franchises. But overly generous or loosely designed packages can signal a board that is too close to management or too focused on keeping pace with peers rather than protecting long-term value.

Shareholders have a direct voice through advisory “say on pay” votes being cast at annual meetings this spring. Those rarely reject plans outright, but meaningful opposition pushes boards toward greater discipline.

Regulators will be watching too. If credit losses climb this year, particularly in commercial real estate or leveraged lending, today’s generous disclosures could intensify scrutiny of risk oversight and board judgment.

For now, Wall Street’s message is simple: strong results justify strong rewards. Whether that verdict holds up will depend on what 2026 brings.

Related: Walmart CEO pay gap widens with workers