- In today’s CEO Daily: CEOs are confronting the fact that many Americans are losing out on the boom.
- The big leadership story: The factors behind IBM’s stock nosedive.
- The markets: Mostly down amid a chipmaker selloff.
- Plus: All the news and watercooler chat from Fortune.
Good morning. Bankers understand money and the consequences for those who don’t have enough of it. The top 0.1% of U.S. households now account for almost six times as much of the country’s wealth as the bottom half, according to Federal Reserve data. Jamie Dimon of JPMorgan Chase sees it, telling a reporter that anti-rich sentiment is surging because “we have, in fact, left the lower-income folks behind.” (JPMorgan just reported its best-ever quarter, as did Goldman Sachs and many others.)
While resilience was the catch phrase of the first quarter among bank CEOs, the latest blowout quarter may be prompting a bit of soul-searching. Wells Fargo CEO Charlie Scharf shared concerns about affordability while reporting a 17% profit jump. At a gathering about a month ago, one C-suite leader in financial services declared that “what we need is a nationwide campaign that celebrates paying taxes as a civic duty, something that shows how taxpayers have built this country.” When I followed up, they declined to put that comment on the record, saying they’re not sure taxpayer money is currently being well spent.
I spoke with BNY CEO Robin Vince earlier this week about why the nation’s oldest bank has enthusiastically embraced serving as the designated financial agent and custodian for the U.S. Treasury’s tax-advantaged Trump Accounts. Vince pointed out that “40% of people in America don’t have direct exposure to the stock market and that’s a problem because they’ve missed out on some of the success of the nation.”
Despite the name, Vince believes the initiative “transcends politics and is a good piece of public policy,” adding “I hope this can be something that can endure in increasing participation and growing wealth for more people in the country.” (BNY also reported record earnings yesterday, with a 27% increase in earnings per share to $2.45 on $5.7 billion in revenue, up 13% from a year earlier.)
Some CEOs take a more noblesse-oblige approach to empowering the masses. At a recent media dinner with a tech founder-CEO, I asked about the morality of founders competing to be trillionaires amid a growing income gap. Having so much of the gains in this economy go to so few doesn’t matter, this person argued, because all that money will “eventually” go back to the masses through charity. I looked at my peers around the table to see if anyone else was struck by the inanity of this argument. If they were, they didn’t show it. We cut into our steaks and went back to talking about AI. Contact CEO Daily via Diane Brady at [email protected]
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