By Liz O’Donnell (Boston)

The recent announcement that pay czar Kenneth Feinberg would cut executive compensation for the 25 most highly paid employees at seven Troubled Asset Relief Program (TARP) recipients (AIG, Bank of America, Citigroup, General Motors Co., GMAC Inc., Chrysler Group LLC and Chrysler Financial) drew strong opinions from Wall Street observers. Most industry insiders feel strongly in favor or against the move. Many believe it demonstrates an over confidence in government. This from a recent op-ed in The New York Times by David Brooks:

“Examples of this overconfidence abound. But let us pick just one: the effort to cap financial compensation…the Obama administration has decided it should take control of compensation reform. Nobody seriously believes high pay caused the financial meltdown; it was bubblicious groupthink. But cutting executive pay just polls so well.”

Read more

Contributed by Martin Mitchell of the Corporate Training Group.

The European Commission raised its forecast for European economic growth for 2010, while U.S. unemployment rose to 10.2% in October. These are but a few highlights of important market events that we’ve gathered to help you start the week well informed.

Economic Backdrop

• The European Commission raised its forecast for European economic growth for 2010, but said the recovery from recession would come at the price of record budget deficits and public debt levels. After a slump of 4.1% in GDP this year, the 27-nation European Union is expected to grow by 0.7% next year and 1.6% in 2011.
• Manufacturers reported that output around the world was rising at the fastest rate in five years in October. The JPMorgan global composite purchasing managers’ index rose to 54.4, up from 53 in September, the highest value since July 2004. In the U.S., the Institute for Supply Management’s factory index rose to 55.7 from 52.6 in September.
• U.S. unemployment rose to 10.2% in October, its highest rate since 1983. President Obama called it a ‘sobering number that underscores the economic challenge ahead’.

Read more

By Elizabeth Harrin (London)

Ever wondered why we still have the gender pay gap? Well, women receive around 80 per cent less in performance related pay than their male colleagues in some of the UK’s top finance companies – and that is a large chunk of why women’s salaries differ from their male counterparts.

An inquiry into the finance sector by the U.K.’s Equality and Human Rights Commission has found that women are much worse off when it comes to receiving bonuses. The average performance related payout for female employees was just £2,875 compared to an average of £14,554 for men. It’s not simply a few highly paid men, or a skew toward women in administrative roles on low salaries, either. There was a gender pay gap for men and women in the same grade or job category – where both sexes are assumed to be doing the same actual job – in 63 per cent of cases.

Read more

by Liz O’Donnell (Boston)

U.S. Banker magazine recently released its annual 25 most powerful women in banking edition. The list is actually several lists: The 25 Most Powerful Women in Banking; The 25 Women to Watch; the Top 25 Nonbank Women in Finance and the Top 3 Banking Teams. This year the magazine aptly titled its accompanying story “Taking Charge in Turbulent Times.” Amid the stress and turmoil of the industry overall, women both triumphed and tripped.

Bank of America hired former Citgroup exec Sallie Krawcheck to head the Global Wealth and Investment Management unit and promoted Cathy Bessant to head of Global Corporate Banking. Because Krawacheck was not in her current job for more than one year, she was not eligible for the list of most powerful women. Instead, she tops the list of women to watch. Also the year, the California Public Employees Retirement System appointed its first ever woman CEO, Anne Stausboll. And Heidi Miller, CEO of JPMorgan Treasury and Securities Services, was in the number one spot for the third year in a row.

Read more

By Elizabeth Harrin (London)

You would have thought that with all the belt tightening going on in this economy, people would be cutting back on their charitable endeavours. Not so. In fact, philanthropists are still turning to fund managers for advice and money management – and in increasing numbers. They might not have so much to give away, but they are certainly keen to work with fund managers specialising in philanthropy to make sure their money goes to the right places.

“We are on the cusp of change with philanthropic habits evolving against the backdrop of the significant global downturn,” says Gina Miller, founder and chair of SCM Philanthropy. SCM Philanthropy is a division of Spencer-Churchill Miller Private, a new boutique wealth management practice based in the UK.

Read more