Post: #1

So Jamie Dimon got a 74% raise despite having some huge losses over the past year.

I guess that expression, "don't blame the player blame the game" comes to mind.

Below is a partial on the fines and penalties over the last 12 months.
$13B Fraudulent Mortgage Backed Securities
$920M for the London Whale Scandal
$400M Manipulation of Energy
$2.6B For not reporting on Madoff

http://www.ft.com/intl/cms/s/0/6adfd77a-...z2sg7pe9ea

Quote:Jamie Dimon, chairman and chief executive of JPMorgan Chase, was paid $20m in 2013, a 74 per cent annual increase, despite high-profile legal woes that have plagued the biggest US bank by assets.
His base salary of $1.5m remained flat while Mr Dimon was awarded $18.5m in restricted stock options, according to a company filing on Friday. That compares to 2012 when Mr Dimon’s pay was cut in half to $11.5m after the “London Whale” trading scandal that cost the bank billions.

The 2013 package is still likely to be controversial given the bank’s earnings have been plagued by legal costs. It reported lower profits in the fourth quarter and a loss in the third quarter, its first since 2004, after a big litigation charge.

JPMorgan has amassed a $23bn war chest to tackle legal issues as it hammers out settlements stemming from the financial crisis. In November, it agreed to pay a record $13bn to the Department of Justice and state authorities for mis-selling mortgage-backed securities.

In justifying the pay increase, independent members of JPMorgan’s board remarked how legal problems at Washington Mutual and Bear Stearns, acquired during the financial crisis, had predated the company’s ownership. During Davos meetings this week Mr Dimon told CNBC that these penalties were “unfair”.

“Under Mr Dimon’s stewardship, the company has fortified its control infrastructure and processes and strengthened each of its key businesses,” independent members said in the filing.

Analysts said that despite the legal problems, his performance was linked to the share price, which rose 33 per cent last year. Some investors were not concerned about the pay rise, with one noting that baseball players earn more than Mr Dimon.

However, Dennis Kelleher, chief executive of Better Markets, a Washington DC-based group that promotes public interest in financial markets, said: “It’s as shocking as it is indefensible,” referring to Mr Dimon’s pay.

“It’s a real slap in the face to the DoJ and financial regulators who think that the actions that they’ve taken in the last year have been appropriate to punish and deter JPMorgan Chase.”

Mr Dimon’s role as both chairman and chief executive is likely to come under scrutiny again at the next annual general meeting in the spring, as investors consider whether the roles should be split.

Analysts have taken some comfort from the bank’s determination to put its legal issues behind it. Other US banks have yet to settle with the president’s task force on residential mortgage-backed securities or with the Federal Housing Finance Agency.

It’s a real slap in the face to the DoJ and financial regulators who think that the actions that they’ve taken in the last year have been appropriate to punish and deter JPMorgan Chase JPMorgan took another $1.1bn charge this month to top up its legal reserves to cover $2.6bn in settlements for its failure to alert US authorities to Bernard Madoff’s Ponzi scheme. In November, it agreed to a $4.5bn settlement with a group of institutional investors over mortgage repurchase and servicing claims.

Those settlements came after it reached a $920m agreement with US and UK regulators in September as a result of the London Whale trading scandal. Mr Dimon famously called the position a “tempest in a teapot” before acknowledging that the trade had gone badly wrong.
Asked whether he had thought about resigning in the wake of the settlements or faced calls to quit from shareholders, Mr Dimon said on the fourth-quarter earnings call: “No, no and it’s all up to the board.”

For the rank and file, bankers’ pay was reined in across the bank. Last week, JPMorgan said pay was down year on year, though flat at 27 per cent of revenues.

At Morgan Stanley, where a focus on equities and wealth management paid off in the fourth quarter, James Gorman, chief executive, received a $4.9m stock bonus for 2013, up 86 per cent from the year before, according to a regulatory filing.

“There were some people who thought that ‘say-on-pay’ was a neat way of finessing this,” said Jill Fisch, a professor of law at the University of Pennsylvania. “The shareholders aren’t going to come in and fix this issue when you think about who the shareholders are.”

Post: #2

I wish they would start outsourcing Fortune 500 CEO's. Think of all the money corporations would save.

Post: #3

enjoy decline

Post: #4

How big were those fines compared to JPM's profits?

Post: #5

JPMorgan fined $920 million in 'London Whale' trading loss

Quote:With the penalty, the bank is acknowledging that it violated banking rules by not properly overseeing its trading operations. In legal language, regulators said that the bank engaged in "unsafe and unsound practices."

As a result of those inadequate risk controls, a team of traders made a complex derivatives bet last year that ultimately generated about $6 billion in losses.
Former JPMorgan trader Bruno Iksil, whose team is thought to be responsible for the bet, was nicknamed the "London Whale" due to the massive trading position, and the fact that he was based in London. But while two of Iksil's collegues had criminal charges filed against them last month in Federal District Court in New York, Iksil, who is cooperating with authorities, has not been charged personally.
The fine money will be split among regulators, with $300 million going to the Office of the Comptroller of the Currency, $200 million going to the Securities and Exchange Commission, $200 million to the Federal Reserve and $220 million to the U.K. Financial Conduct Authority.

Quote:The fine is a small fraction of the bank's $2.4 trillion in assets. The nation's largest bank earned $13 billion in the first half of this year on revenue of $51.8 billion.

They lost a total of 6.2 billion dollars.




http://money.cnn.com/2013/09/19/investin...hale-fine/

Post: #6

(02-07-2014 05:43 PM)samsamsam Wrote:  So Jamie Dimon got a 74% raise despite having some huge losses over the past year.

Game recognised.

Post: #7

(02-07-2014 11:48 PM)Thomas the Rhymer Wrote:  

(02-07-2014 05:43 PM)samsamsam Wrote:  So Jamie Dimon got a 74% raise despite having some huge losses over the past year.

Game recognised.

Nothing to do with game. It is a rigged system.

I am as capitalistic as they come, but this is exactly the kind of stuff that makes people blame all their economic ills on capitalism and then enact foolish socialist programs as a way of overcompensating against what they perceive is capitalism, but which is not capitalism.

These too-big-to-fail behemoths need to go.

Post: #8

For what it's worth, Warren Buffett feels that Dimon was underpaid:

Quote:Warren Buffett, chief executive of Berkshire Hathaway Inc., said if he owned J.P. Morgan Chase & Co., he would keep Chief Executive James Dimon at the helm and would pay him even more than he’s making now.

Earlier on Friday, the bank disclosed in a filing that Mr. Dimon received a 74% jump in compensation in 2013, a year in which J.P. Morgan agreed to more than $20 billion in legal payouts and posted its first quarterly loss since the financial crisis.

The increase brought Mr. Dimon’s pay for 2013 to $20 million from the $11.5 million he pulled in for 2012. The board that year cut Mr. Dimon’s pay in half due to a trading fiasco that cost the bank billions, saying he had “ultimate responsibility for the failures that led to the losses.”

But in an interview Friday, Mr. Buffett called Mr. Dimon “a bargain.”

“If I owned J.P. Morgan Chase, he would be running it and he would be making more money than the directors are paying him,” said Mr. Buffett, who has publicly defended the bank executive before and owns J.P. Morgan shares.

He added J.P. Morgan was a “huge plus to the American financial system” during the financial crisis and did much better than other big banks through that period.

“If Jamie decides he wants to make more money, all he has to do is call me and I’d hire him at Berkshire,” the billionaire investor added.

Post: #9

I'm not sure if there is or should be a solution to this. JPM is a publicly-traded company, and compensation for executives was voted on by shareholders (see page 41 of their 2013 proxy statement). Shareholders also voted whether to keep the CEO and Chairman positions the same.

I think it's a slippery slope if the government gets involved in forcing the hand of publicly traded companies on their operational decisions, contravening shareholders' wishes.

Post: #10

(02-08-2014 12:29 AM)paninaro Wrote:  I'm not sure if there is or should be a solution to this. JPM is a publicly-traded company, and compensation for executives was voted on by shareholders (see page 41 of their 2013 proxy statement). Shareholders also voted whether to keep the CEO and Chairman positions the same.

I think it's a slippery slope if the government gets involved in forcing the hand of publicly traded companies on their operational decisions, contravening shareholders' wishes.

No it isn't. Government created JPMs (almost) monopoly in the first place. JPM never got to its market size from doing things kosher, Government aided it to monopolize it's industry.