Goldman Trumped JPMorgan Last Year, So Why's Dimon's Pay Higher Than Blankfein's?

Apr 4 2014, 8:49pm CDT | by

Goldman Trumped JPMorgan Last Year, So Why's Dimon's Pay Higher Than Blankfein's?
Photo Credit: Forbes Business

Wall Street compensation packages are always going to baffle the general public, but JPMorgan Chase's pay package for its CEO is particularly notable this year.

Jamie Dimon is expected to get one of the biggest compensation packages among the big banks with $20 million for 2013. That’s more than any other big bank CEO including Bank of America Brian Moynihan ($14m), Wells Fargo's John Stumpf ($19.3m) and Citigroup’s Michael Corbat ($14.1m).

But consider this: Dimon’s pay even edges out Wall Street’s money-making king, Lloyd Blankfein, CEO of Goldman Sachs. Blankfein received a 50% pay increase which gets him $19.9 million.

Goldman Sachs saw its stock rise 35% compared to JPM’s 31%. Plus, JPM’s net income dropped 16% in 2013 compared to Goldman’s jumped 7.6%.

Dimon’s $20 million comes as he has one of his worst years as CEO. The bank reported its first ever quarterly loss under Dimon’s lead last year. It was also at the center of several high profile investigations, and ended up shelling out some $20 billion to settle legal claims.

JPM entered a $13 billion settlement with the Department of Justice in which JPM went as far to say that it made serious misrepresentations about its mortgage-backed securities. In other words, in an industry where admitting wrong-doing is as rare as a female banking CEO, JPM actually acknowledged it messed up pretty badly. Yet, Dimon is the highest paid big bank CEO.

It makes you wonder about all the doom and gloom warnings banks and their supporters wield when they become potential targets of prosecutor investigations. Executives and senior management often argue that criminal prosecution would wreck havoc on not only their company but the wider financial world; their stock would plummet and their counterparties become unstable.

Manhattan U.S. Attorney Preet Bharara recently called bull on many of those “chicken little routines” saying in a speech earlier this week he said:

When these arguments are made to me and my staff, we take them seriously—like we take all arguments and submissions. But we also take them, increasingly, with grains of salt, and make our own independent judgment about what actually is likely to happen. What I have found typically is that, in reality, as we had suspected, the sky does not fall.

The sky actually brightens for some, Bharara notes with a not-so-hidden jab at Jamie Dimon. “Stock prices remain steady, or go up, as the company is viewed as putting problems “behind it;” clients and customers and key employees don’t even bat an eye; and sometimes, the CEO even gets a raise,” Bharara said.

Looks like it pays to be good or bad on Wall Street.


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