What Happened to the Democratization of Wall Street?

The New York Times this morning reports on announcements from financial institutions following the latest round of "stress tests" by the Federal Reserve:

 JPMorgan Chase announced Tuesday that it would...  increase its quarterly dividend payment by a nickel, to 30 cents... Wells Fargo increased its dividend by 10 cents, to 22 cents. John Stumpf, the bank’s chairman and chief executive said, “We are extremely pleased to reward our shareholders.” American Express, the credit card issuer, also announced it would increase its quarterly dividend by 2 cents, to 20 cents a share. Meanwhile, U.S. Bancorp raised its quarterly dividend, too, by 7 cents, to 19.5 cents.

But they note the appall some take from these actions:

“It’s frankly irresponsible to allow banks to quickly empty their coffers,” said Neil Barofsky, the former inspector general for the Troubled Asset Relief Program. “They should be holding onto this money.”

What an odd sign of the times! Now, I'm certainly not the first person in line to defend the likes of JP Morgan Chase, but if I get this right, there's outrage by some government officials that banks would dare to share their profits with their SHAREHOLDERS, as if sharing the profits of a company with its owners is somehow irresponsible. I wonder what their take is on the obscene salaries and bonuses at times paid out to employees, without regard to profits?

Let's put this in perspective: we're not talking about these banks stripping assets to pay off investors and top executives. JP Morgan Chase's (JPM) increased $0.30/share brings their dividend yield to 2.68% at today's prices; and Wells Fargo's (WFC) increase to $0.22/share brings their dividend yield to 2.59%; American Express' yield grows to 1.4%; and US Bank's (USB) hits the lofty heights of 2.47%. Hardly the profligate, irresponsible embarrassment of riches Barofsky's statement implies.

And who are those shareholders? My guess is a good percentage of them are everyday investors with vacation savings and retirement accounts, who frankly deserve a bit of the share in profits from the companies they invest in.

I guess that's why it was called the Troubled Assets Relief Program, not the Distressed Shareholders Relief Fund.