A year ago, the bank had cut Jamie Dimon’s compensation in half.
A year after an embarrassing trading blowup led to millions of dollars being docked from Jamie Dimon’s paycheck, the chairman and chief executive of JPMorgan Chase & Co. 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 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 — gathered in a conference room at the bank’s New York headquarters — 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. During the meetings some board members left the conference room to pace up and down the 50th-floor corridor.
Details on the chief executive’s compensation will be disclosed in the coming days, possibly as soon as Friday.
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 also has solidified his support among board members, according to the people briefed on the matter, for 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 21 percent 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 penalized 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 blowup. Leaving his compensation unchanged, or reducing it, could have sent a symbolic message of contrition to authorities.
Instead, the board’s decision to raise his pay may energize critics who have questioned whether the bank’s directors can provide an effective check on the charismatic Dimon, who is both board chairman and chief executive. Some shareholders have argued for those jobs to be split to limit his power, but a proposal for such a division was handily defeated at the bank’s annual meeting last spring.
It is unlikely that Dimon will receive anything near the $23.1 million he got for 2011, when he was the highest paid chief executive at a large bank. So far, none of the biggest Wall Street firms have released the 2013 compensation for their senior executives. Last year, Lloyd Blankfein, the chairman and chief executive of Goldman Sachs, took home $21 million.