Diamond Jim: Even tarnishing JPMorgan pays big rewards
January 28, 2014 12:00 AM
The Pittsburgh Post-Gazette
JPMorgan Chase has paid its board chairman and CEO, Jamie Dimon, $20 million in compensation for 2013, a raise of 74 percent over the previous year. The handsome increase came in the same year that the bank had to pay record penalties — $20 billion — for various misdeeds.
These included $920 million in penalties for the $6 billion “London Whale” trading disaster, $13 billion in a settlement to the Justice Department for short-term mortgage tricks, $1.7 billion in fines for JPMorgan’s failure to report its suspicions of the Bernie Madoff fraud and $410 million in penalties for its traders’ manipulation of energy prices.
At the same time, JPMorgan’s stock price rose in 2013 by 21 percent and its profits reached $17.9 billion. Whatever punishment JPMorgan might have given Mr. Dimon for the bank’s costly wrongs was spared by its board for his having guided the ship to another year of financial success. It is clear that Mr. Dimon’s influence with government officials helped JPMorgan lower its penalties and served partly as a basis for his booming compensation.
Not that Mr. Dimon or anyone at JPMorgan cares, but many Americans are bound to be offended by the example of an executive at one of the nation’s wealthiest banks being richly rewarded for operating a company that repeatedly violated the law.
While this is happening, the nation’s poor, one of every six Americans, live on less than $23,000 a year. Meanwhile, Congress has not passed a food stamp bill, nor has it extended emergency jobless benefits that expired last month.
By showering more riches on a CEO who probably should have been fired by his board, JPMorgan shows behavior that is more evidence of the income inequality crisis. Some reports say Congress is secretly working on tax reform. That might help, if it could be achieved in today’s Washington, but it could be the problem is much bigger than that.
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