French Investment Bank CEO Nails How Wall Street Should Think About Getting Paid

In an interview with CNBC's Squawk Box, Societe Generale CEO Frederic Oudea nailed how Wall Street should be thinking of compensation.

Regulators have been saying this for a while, but it's nice to hear it from one of the guys at the top.

Here's how it went down: Squawk Box host Joe Kernen asked Oudea if he is afraid that he's going to lose top bankers because he's not compensating them enough.

"Do you think the best banker in the world is only worth $1 million," asked Kernen.

Oudea smiles and says:

"Perhaps in Europe we have a slightly different way of looking at things. I think it's fine to reward effectively talents, and if they are really genius to bring added value to the clients, why not? What happened in the financial crisis showed sometimes short on profit can create disaster. Not always, though. It's not always that you're risking the bank's money to make your own. I agree. As a CEO and Chairman, I want to also have a culture of people with motivation regarding their compensation but beyond that, who have an interest in their job, who are keen to help their clients. To have something which is acceptable to society which can mean still good packages. We deferred payments to ensure the risk that is taken today, I think it makes sense.

Oudea's point is clear. On Wall Street, compensation is culture. Period. You make short term gain and risk rewardable, and that's how bankers will conduct their business.

He also points out that if people believe that banking is just the best profession for making money, it will naturally attract the greediest people in society. That, then, skews the industry as a whole and hurts society at large.

Reforming compensation on Wall Street isn't necessarily about capping salaries, it's about changing incentives.

Watch the video below: