A few years ago we asked why anyone would exclude litigation charges from bank EPS. While we are still waiting for someone to explain that to us, we'd like to show an update on just how dilutive to shareholder value these "one-time, non-recurring" litigation charges have been over the past six years.
The top three banks alone have taken $107.7 billion in litigation charges from 2010-2015, with Bank of America head and shoulders above its competition in the race to see just how much legal expense can be incurred before anyone other than Zero Hedge cares.
Chart: Goldman Sachs
Unsurprisingly, Citigroup, JP Morgan, and Bank of America all decided to reward their CEOs for the uncanny ability to erode shareholder value, by giving significant raises in 2015.
Citigroup's Michael Corbat received a 27% raise in 2015, bringing his total compensation to $16.5 million.
JP Morgan gave Jamie Dimon a 35% raise, bringing his total comp to $27 million in 2015.
And for his efforts in helping Bank of America to a stunning $51.6 billion in litigation charges over six years, BAC rewarded Brian Moynihan with a 23% raise in 2015, bringing his total compensation to $16 million.
And so there we have it.
It appears that in order to receive a raise on Wall Street, one of the SMART goals that CEOs receive at the beginning of each year is making sure to add billions in litigation expense and lay off as many lower level employees to offset the charges as possible.
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