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A year after an embarrassing trading blow-up led to millions of dollars being docked from Jamie Dimon’s pay cheque, the chairman and chief executive of JPMorgan Chase is getting a raise.
JPMorgan’s board voted this week to increase Dimon’s annual compensation for 2013, hashing out the pay package after a series of meetings that turned heated at times, according to several executives briefed on the matter. The raise — the details were not made public on Thursday — follows a move by the board last year to slash Dimon’s compensation by half, to $11.5 million.
When it made that deep pay cut, the board was giving a stern rebuke over the fallout from the “London Whale” multibillion-dollar trading blunder. This week, directors discussed what message their next decision on the bank chieftain’s compensation would send.
The debate pitted a vocal minority of directors who wanted to keep his compensation largely flat, citing the approximately $20 billion in penalties JPMorgan has paid in the last year to federal authorities, against directors who argued that Dimon should be rewarded for his stewardship of the bank during such a difficult period.
A spokesman for the bank declined to comment.
Dimon’s defenders point to his active role in negotiating a string of government settlements that helped JPMorgan move beyond some of its biggest legal problems. He has also solidified his support among board members, according to the people briefed on the matter, by acting as a chief negotiator as JPMorgan worked out a string of banner government settlements this year.
Also under his leadership, the bank has generated strong profits and its stock price is up more than 22% over the last 12 months. Some board members fault what they consider to be overzealous federal prosecutors for the hefty fines, rather than Dimon or the bank, arguing that JPMorgan is being penalised for the sins of firms like Bear Stearns that it scooped up during the financial crisis.
But many of those very problems arose under Dimon’s watch, including $1 billion in fines from regulators over the trading blow-up. Leaving his compensation unchanged could have sent a symbolic message of contrition to authorities.
JPMorgan’s directors may have decided that Dimon, as his peers may, should get a raise, but to ordinary Americans — and possibly to regulators — the decision to increase his compensation may seem curious given the banner penalties that federal authorities have extracted from the bank. It is