US banks setting sky-high ceilings for director pay

New York

OVER the past two years, a growing number of US banks have capped their directors' earnings, but the ceilings are so high that they primarily serve to fend off potential shareholder litigation rather than control the pace of pay increases.

Most of the caps are typically two to three times what directors now get paid, according to data and filings reviewed by Reuters.

For instance, Morgan Stanley's quarterly financial statement last month noted a new US$750,000 limit on annual compensation for independent directors. That is more than double the US$350,000 median the bank now pays its directors.

Morgan Stanley's board ha…