Jamie Dimon, CEO of JP Morgan Chase, received a 74 percent increase in salary, which totaled at $20 million raise for 2013. As many have asked, how could a CEO get such a raise after the worst year for the bank that has been straddled with lawsuits, bad press and legal battles over activities the bank engaged in related to toxic mortgage schemes and so forth.
The Wall Street Journals reported that the bank took many different factors into consideration in determining Dimon’s salary for 2013. Those reasons allegedly included performance, market share gains and handling of the aforementioned legal issues the bank has faced in recent years. The bank was challenged with $20 Billion in settlements that impacted the income of the bank and lender that was a major player in the housing bubble.
Dimon’s base is only $1.5 million, but he was given $18.5 million in stock options, the board decided. His 2012 salary was only half this amount, totaling around $11.5 million, but the couple of years prior to that his salary was around $23 million. During the tenure of Dimon, the bank lost major bets on the derivatives market. The amount totaled around $6.25 billion and it drew wide criticism from many consumer advocacy groups, politicians, investors and others.
JP Morgan was reported to be the first major financial institution to date to admit wrongdoing in events that led to major problems in the housing and securities industries. Among those magnified for their practices and roles in the financial meltdown include JP Morgan, CityBank, Chase, Wells Fargo, Countrywide, Bank of America and several others. With this information in mind, it seems hard to fathom how Jamie Dimon gets a $20 million raise after this has all been revealed.
Before Dimon, the bank had never posted a quarterly loss. 2013 was the first under his watch. The bank was also subject to several major investigations under Dimon. JP Morgan and Dimon surprised everyone when they admitted they did something wrong and they had to pay the justice department a hefty sum, to the tune of $13 billion, for their errors. Shareholders are not as content with Dimon as the board that geve him the raise apparently is. Many have expressed concern and think that he should step down, according to Forbes.
According to the Chicago Tribune, most other employees at the company did not receive raises because JP Morgan declined in profits after legal settlements with the government. JP Morgan suffered a 16 percent loss of income after all was said and done.
Investors aren’t the only ones who are going to be upset about this decision. It is likely there will be response by many politicians across the spectrum about the decision.
Dimon is not only the CEO of JP Morgan but he is also the chairman. Some argue this is the equivalent of a board dictator, but this is also speculative. One thing is very clear, however. Jamie Dimon gets a $20 million raise after JP Morgan had the worst reports in a year on its reputation.
By Rob Lawson
Wall Street Journal