JPMorgan Chase cuts CEO Dimon's pay in half
America's best-known banker is getting a big pay cut.
JPMorgan Chase said Wednesday that it will dock the pay of CEO Jamie Dimon by half, to $11.5 million from $23 million.
It's the latest fallout from a trading loss at the bank last year, one that eventually ballooned to $6 billion. Its ripple effects have already been numerous, forcing Dimon to appear contritely before Congress and putting the bank squarely in the cross hairs of regulators and lawmakers.
The pay cut amounted to a reprimand from the bank against a CEO who remains popular and well regarded, despite the stain of a trading loss that Dimon once dismissed as a "tempest in a teapot."
And even as it cut his pay, the board of directors praised Dimon for responding "forcefully" to the trading loss, presiding over an overhaul of the bank's risk management and booting out responsible executives. A report from a bank task force placed most of the blame on other executives and traders who have since left.
Despite the fallout from the trading loss, JPMorgan reported a strong fourth quarter Wednesday. Earnings shot up 55 percent over the same period a year ago to $5.3 billion after paying preferred dividends, up from $3.4 billion.
Per share, those earnings amounted to $1.40, blowing away the $1.16 expected by analysts polled by financial data provider FactSet. The bank's stock rose 47 cents to $46.82, up 1.01 percent.
Dimon's job was never seriously in danger, even with the trading loss, and the pay cut hasn't changed that perception. Wall Street saw it less as an indictment of Dimon and more as a sign of the board's commitment to taking the trading loss seriously.
"It's bitter medicine, but he swallowed it and is moving on," said James Post, an expert on corporate governance who teaches at Boston University.
JPMorgan, and Dimon, are essential players in U.S. banking.
The bank emerged from the financial crisis as one of the strongest banks in the country, a winner in a meltdown that forced other banks to their knees. Its blockbuster fourth-quarter earnings will almost certainly cement it as the most profitable U.S. bank of 2012.
Such accomplishments have made Dimon one of the best known, and most outspoken, bank leaders of his generation.
While some of his peers have tried to stay under the radar, he has spoken out against many new regulations -- including some, the bank's critics say, that could have prevented the trading loss.
Dimon has publicly chafed at criticism of banking's big pay packages, including President Barack Obama's famous "fat-cat bankers" comment. "Acting like everyone who's been successful is bad and because you are rich, you are bad -- I don't understand it, I don't get it," he once told an investment conference.