Jpmorgan Directors Raise Dimon’s Pay After Prior Cut
Jamie Dimon, chairman and chief executive of JPMorgan Chase & Co (JPM.N), got a 74 percent pay increase for 2013, when $20 billion of legal settlements weighed on the bank’s income.
The CEO received $20 million, including $18.5 million of restricted stock recently awarded, the company said in a public filing on Friday. Dimon’s base salary is $1.5 million.
Dimon was paid $11.5 million for 2012, half the $23 million compensation in each of the prior two years, according to company filings, after the company lost $6.25 billion on bets known as the “London Whale” derivatives trades. When those trades first came to light in April 2012, Dimon dismissed them as a “tempest in a teapot”.
Most employees at JPMorgan did not get pay increases for 2013 because profits declined as a result of high legal bills to settle government and private claims against the bank.
JPMorgan, the biggest bank in the U.S. by assets, employed 251,196 people at year-end.
The bank suffered a number of black eyes in 2013. In January of last year, the U.S. Federal Reserve and the Office of the Comptroller of the Currency imposed sanctions on the bank for weak risk and financial controls, as well as deficient safeguards against money laundering and violations of the U.S. Bank Secrecy Act, over the 2012 derivatives loss.
LEGAL SETTLEMENTS
Over the course of the year, the bank agreed to a series of high-cost legal settlements, including $13 billion to resolve claims that it overstated the quality of the mortgages it was selling to investors before the financial crisis.
Those settlements cut into the bank’s earnings for the year — JPMorgan’s income fell 16 percent for 2013 to $17.92 billion.
In the new pay package, half of Dimon’s restricted stock units will vest after two years and half after three years, which JPMorgan’s statement said ties his compensation to the company’s future performance, including progress meeting requirements from regulators to improve its risk controls.
U.S. median household income was $51,017 in 2012, adjusted for inflation, according to the Census Bureau.
Directors cited the 2012 pay cut as evidence that the board is independent from Dimon, who is its chairman. The board’s independence became an issue at the company’s annual meeting when some shareholders tried, but failed, to pass a referendum to separate the roles of board chairman and CEO.
Shareholders voted against that proposal after board members said that Dimon might leave if he did not retain his chairman title.
The New York Times reported Friday that directors had decided to pay Dimon more for 2013 after a series of meetings that turned heated at times. JPMorgan spokesman Joseph Evangelisti said the Times’ characterization of the director meetings was wrong.
Source : Reuters
