Whoever said crime doesn’t pay looks pretty stupid right about now. After closing out a year where the company was forced to put aside $20 billion for criminal fines, one of JPMorgan’s first acts in the new year is to give the chairman and CEO who presided over the criminality, Jamie Dimon, a 74% raise. That’s right, a 74% raise for running an epically criminal enterprise.
After the London Whale fiasco Dimon took a pay cut and was only compensated a mere $11.5 million in 2012. But now the good times are back as Dimon will now make $20 million a year.
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 halved Mr. Dimon’s pay due to a trading fiasco that cost the bank billions, saying that he had “ultimate responsibility for the failures that led to the losses.”
In approving the 2013 package, which included $18.5 million in stock, the board cited the company’s long-term performance, gains in market share and “the regulatory issues the company has faced and the steps the company has taken to resolve those issues.”
That’s why Jamie is Too Big For Scale. He was able to break the law continually and exceptionally and face no serious consequences. That is an achievement of sorts isn’t it? If you were the head of a company and were able to break the law continually and never had to seriously pay for it – why not keep you on?
Dimon has been able to run circles around prosecutors and regulators, though that might be easier to do when they are taking a cut of your loot, or hope to in the future.
Mr. Dimon’s pay raise caps a tumultuous year for the nation’s largest bank by assets, where several settlements with numerous government agencies included a record $13 billion pact with the Justice Department in November.
The legal problems also acted as a drag on earnings for J.P. Morgan, which posted the first-ever quarterly loss under Mr. Dimon and slipped behind Wells Fargo & Co. as the bank with most annual profits. Net income dropped 16% during 2013 to $17.9 billion. Revenue was down 2%.
What’s a little short term pin prick when you have escaped jail time and even greater fines? Clearly this is a time to bring Dimon in from the cold with his oh-so-pitiful $11.5 million. He deserves more.
Dimon was able to buy off the cops and at rather affordable prices. JPMorgan even escaped the Bernie Madoff affair with a deferred prosecution agreement – the kind of agreement reserved for firms that show signs they can be redeemed and therefore shouldn’t risk being destroyed with a prosecution. Surely a firm that has set aside $20 billion to pay fines for breaking the law fits the bill.
Dimon proved the rule of law is a joke for the rich, and for that he will be handsomely rewarded.