JP Morgan boss has pay halved
The company said Mr Dimon received $US1.5 million in salary and $US10 million in shares for 2012, half the $US23 million he secured in 2011.
Mr Dimon stunned Wall Street last May when disclosing that the bank's chief investment office (CIO), a division responsible for investing surplus deposits, had lost more than $US6 billion in botched trades in the derivatives market.
Mr Dimon, the highest-profile banker on Wall Street, bore "ultimate responsibility for the failures that led to the losses in the CIO and has accepted responsibility for such failures", the bank said.
An internal report into the loss by JP Morgan found fault with other executives, including the former chief financial officer Doug Braunstein, Barry Zubrow, who was head of risk management at the bank, and Ina Drew, who led the CIO.
Mr Dimon "could have better tested his reliance on what he was told" by senior managers about trading in the CIO, the report found.
The reduction in Mr Dimon's pay came as JP Morgan reported a 53 per cent jump in fourth-quarter profits to $US5.69 billion, as it made more money from its mortgage business.
Mr Dimon, who initially dismissed the trading losses as a "tempest in a teapot", defended his handling of them once their scale emerged. "You have mistakes that you acknowledge and you fix," he said. "Those mistakes scared us."
Frequently Asked Questions about this Article…
Jamie Dimon's 2012 pay package was halved to US$11.5 million (US$10.9 million) after JP Morgan disclosed a multi‑billion dollar trading loss in its London office. The bank said Dimon bore "ultimate responsibility" for the failures that led to the loss and he accepted responsibility, prompting the reduction in his pay.
For 2012 Jamie Dimon received US$1.5 million in salary and US$10 million in shares, totalling US$11.5 million. That was about half of the roughly US$23 million he secured in 2011.
JP Morgan reported that its chief investment office (CIO) lost more than US$6 billion in botched derivatives trades. The CIO, based in the bank's London office, was responsible for the trades that produced the multi‑billion dollar loss.
According to the article, the CIO (chief investment office) is a division responsible for investing surplus deposits. In this case the CIO engaged in derivatives trading that resulted in the reported losses.
The internal report found fault with several senior executives, including former chief financial officer Doug Braunstein, Barry Zubrow (head of risk management), and Ina Drew (who led the CIO). The report also said Dimon "could have better tested his reliance" on what he was told by senior managers.
Despite the trading losses, JP Morgan reported a 53% jump in fourth‑quarter profits to US$5.69 billion, driven in part by stronger results in its mortgage business, according to the article.
Jamie Dimon initially described the losses as a "tempest in a teapot" but later defended his handling, acknowledging mistakes. He said, "You have mistakes that you acknowledge and you fix," and added, "Those mistakes scared us."
The article suggests investors may want to follow JP Morgan's leadership accountability, any changes stemming from the internal report, and subsequent financial reports. The piece notes the bank reduced Dimon's pay, named executives found at fault, and still reported a strong fourth‑quarter profit, so tracking further disclosures and risk‑management actions would be relevant for investors.
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