JPMorgan Chase slashes pay of CEO, cites 2012 trading loss
BY Staff and Wire Reports
Thursday, January 17, 2013
1/17/13 at 2:24 AM
JPMorgan Chase CEO Jamie Dimon will get his pay cut in half because of a trading loss that cost the bank more than $6 billion last year.
The New York-based bank said Wednesday it will cut Dimon's pay to $11.5 million for 2012, consisting of $1.5 million in salary and $10 million in restricted stock awards. That's less than half last year's pay of $23 million, which made him the highest-paid CEO of any U.S. megabank.
The loss, which was related to complex investments known as credit derivatives, tarnished JPMorgan Chase's reputation as a scrupulous manager of risk. Dimon appeared twice before Congress to apologize and explain how it came about.
Also Wednesday, the bank reported a 55 percent jump in fourth-quarter earnings. Its board of directors acknowledged the loss was "a serious mistake" but praised Dimon for his response, which included shutting down the division that was responsible and getting rid of top managers.
"Companies have problems," Dimon told reporters. "The problem embarrassed us. We're fixing it."
On Monday, federal regulators slapped sanctions on JPMorgan and ordered it to tighten up its risk management procedures.
JPMorgan Chase CEO Jamie Dimon: "Companies have problems," he said. "The problem embarrassed us. We're fixing it."