2013 was not a very good year for JPMorgan Chase CEO Jamie Dimon. Billions of dollars were paid out in fines and penalties. Marginally effective bribery was alleged. Living rooms were destroyed with tennis balls.
And yet, despite the very public blunders of his firm, Dimon is about to get a big bonus. Bigger than last year's, even.
DealBook reports on Dimon's raise:
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 Mr. 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.
Pacing is universal code for "rich people in a state of extreme disturbance," so it sounds like the board meeting where Dimon's pay was discussed was fairly stressful. I can see why: Pay Dimon too little, and he might huff off and decide to retire early. (Or so board members claim.) Pay Dimon too much, and you get angry senators and regulators, and people wondering why you're rewarding a CEO for presiding over a record-setting legal mess.
What's incredible about the JPMorgan Chase bonus discussions is that Dimon seems to have effectively loss-proofed himself. In a good year for the bank, board members can point to the stock price and demand a huge bonus for Dimon. In a bad year, they can point to his "stewardship of the bank" under duress. No matter what happens in a given year, JPMorgan Chase's board seems to think it would be better off with Dimon getting paid more rather than less. And in this context, last year's pay cut seems like the notable event. Barring an even bigger disaster, Dimon's bonuses are only going to get bigger from here.