Sun, Jan 26, 2014 - Page 13 News List

JPMorgan boss saw 74% pay raise

Bloomberg

JPMorgan Chase & Co gave chief executive officer Jamie Dimon a 74 percent raise to US$20 million last year, bringing his pay closer to where it stood before he was penalized for faulty oversight of botched derivatives bets.

The board’s compensation package for Dimon, 57, who also serves as chairman, included US$18.5 million in restricted stock, the New York-based lender said on Friday in a regulatory filing. Dimon’s salary was unchanged at US$1.5 million and he got no cash bonus, according to the filing.

Board members decided to keep Dimon’s pay below previous peak levels after criminal and regulatory probes cost JPMorgan more than US$23 billion in settlements last year. The directors cut his 2012 package in half in January last year to US$11.5 million, saying he bore “ultimate responsibility” for failures that led to derivatives trading losses in the so-called “London Whale” episode.

In raising Dimon’s pay, the board of directors cited “sustained long-term performance; gains in market share and customer satisfaction; and the regulatory issues the company has faced and the steps the company has taken to resolve those issues,” according to the filing.

The restricted stock vests 50 percent after two years and 50 percent after three years, the bank said. Awarding Dimon’s total bonus in shares ties his pay “to the company’s future performance, including continued progress on the company’s regulatory agenda,” the firm said.

Dimon became CEO at the end of 2005 and added the title of chairman a year later. His reputation as a top manager, along with his pay, has fluctuated since then. While JPMorgan emerged from the financial crisis as the only large US bank to avoid quarterly losses, the trading debacle in 2012 prompted some investors to call for the splitting of his dual roles. Shareholders rejected that proposal at a meeting in May last year.

Dimon was paid US$49.9 million for 2007, including special stock awards. During the financial crisis a year later, he took just a US$1 million salary. He received US$15.2 million for 2009, and US$23 million for each of the two years that followed.

In last year’s third quarter, the bank posted its first loss on Dimon’s watch after taking a US$7.2 billion charge to cover the cost of mounting litigation and regulatory probes. The deficit ended the firm’s streak of three record annual profits. Full-year net income fell 16 percent to US$17.9 billion.

Dimon pushed last year to resolve government investigations, including at least eight US Justice of Department probes listed in the firm’s quarterly report in October last year.

Settlements since then have included a record US$13 billion deal to resolve inquiries into mortgage-bond sales. The firm paid US$2.6 billion and avoided criminal prosecution while settling claims it failed to stop Bernard Madoff’s Ponzi scheme.

The firm also paid more than US$1 billion last year tied to the botched derivatives bets, which lost more than US$6.2 billion in 2012. In that case, US and UK regulators faulted its oversight of a trader known as the “London Whale” because his positions were so large.

Dimon told journalists earlier this month that he could not predict whether he might be able to put the legal disputes behind the bank this year.

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