NEW YORK – America’s best-known banker is getting a big pay cut.
JPMorgan Chase said Wednesday that it will dock the pay of CEO Jamie Dimon by half, to $11.5 million from $23 million.
It’s the latest fallout from an embarrassing trading loss at the bank last year, one that eventually ballooned to $6 billion. Its ripple effects have already been numerous, forcing Dimon to appear contritely before Congress and putting the bank squarely in the cross hairs of regulators and lawmakers.
The pay cut didn’t surprise Wall Street. What set it apart was that it amounted to a reprimand from the bank against a CEO who remains popular and well-regarded, despite the stain of a trading loss that Dimon once dismissed as a “tempest in a teapot.”
Dimon’s job was never seriously in danger, even with the trading loss, and the pay cut hasn’t changed that perception. Wall Street saw it less as an indictment of Dimon and more as a sign of the board’s commitment to taking the trading loss seriously.
“It’s bitter medicine, but he swallowed it and is moving on,” said James Post, an expert on corporate governance who teaches at Boston University. “I think that still leaves him in a very strong leadership position in both the bank and the industry.”
Despite the fallout from the trading loss, JPMorgan turned in a strong fourth quarter. Earnings shot up 55 percent over the same period a year ago, to $5.3 billion after paying preferred dividends, up from $3.4 billion.