A Big Payday for JPMorgan CEO
The compensation is in addition to $10 million in stock Dimon recently received for exercising 10-year-old stock options. "The level of 2009 pay for Mr Dimon, whose bank has outperformed many rivals in the aftermath of the financial crisis, could set a benchmark for other Wall Street banks at a time of heightened public scrutiny of bankers' remuneration," the paper reported.Many analysts expected Dimon to make much more. JPMorgan is considered one of the most successful, if not the most successful, of the old money-center banks. Its earnings have surpassed peers Bank of America (BAC) and Citigroup (C). During the last year, JPMorgan shares are up about 200% while Citi's are essentially flat.
Washington has been waiting to see whether firms that received TARP funds will exercise restraint in the compensation of their senior executives. There have been rumors, started in The Times of London, that Goldman Sachs (GS) CEO Lloyd Blankfein would get a $100 million pay package for 2009. The investment bank denied the report. Goldman may decide that it needs to set Blankfein's package much closer to Dimon's to avoid a backlash from both Washington and the public.
"Modest" compensation packages for Wall Street CEOs, at levels of around $20 million, will almost certainly still stir trouble among many politicians who claim that banks bailed out with TARP money have no appreciation for taxpayer sacrifices. Large U.S. financial firms already face the prospects of taxes on their liabilities and limitations on proprietary trading.
Dimon and Blankfein might be better off to take $1 in compensation this year. It is likely that neither needs millions of dollars right now, and such an action would help calm the waters for banks desperately in need of some good PR.
UPDATE: Reports are indicating that Dimon will receive a $17 million pay package for 2009, including $8 million in restricted stock and 563,562 options.