JPMorgan cuts Dimon pay 50%, says CEO responsible for lapses

‘Dead Wrong’

Dimon took responsibility for the bank’s blunders in June, when he told a U.S. Senate committee he was “dead wrong” in April when he dismissed media reports about trading losses as a “tempest in a teapot.”

The bank said its review of Dimon took into account his decisions to replace senior managers, efforts to claw back their pay and the formation of a team to examine what went wrong.

“Once Mr. Dimon became aware of the seriousness of the issues presented by CIO, he responded forcefully by directing a thorough review and an extensive program of remediation,” according to the report.

The bank said separately today that fourth-quarter profit rose 53% to $5.69 billion as mortgage revenue climbed. Dimon, who is also chairman, was not included in board deliberations on his pay, he told reporters on a conference call after earnings were announced.

“The board had to look at the positives, which I think are large, and the negatives,” Dimon said. “This is one huge embarrassing mistake and I respect their decision.”

Macris, Drew

Dimon ousted three London traders involved in the loss, shuffled senior managers and accepted resignations from executives including former Chief Investment Officer Ina Drew. Matt Zames, the former co-head of fixed-income trading, was promoted twice last year and, after helping overhaul the CIO, is now co-chief operating officer with Frank Bisignano.

Drew retired four days after the loss was disclosed on May 10. Iksil, his supervisor Javier Martin-Artajo and the former CIO head in Europe, Achilles Macris, also left.

Barry Zubrow, who had overseen JPMorgan’s risk-management function while Iksil expanded his book, retired at the end of last year. Former Chief Financial Officer Doug Braunstein, 52, stepped down to become a vice chairman in the investment bank.

Jes Staley, former CEO of the investment bank who was stripped of day-to-day management duties in July, announced his departure Jan. 8. Staley, 56 and a one-time contender for Dimon’s job, is joining BlueMountain Capital Management LLC, the $12 billion hedge fund that profited from the bank’s faulty derivatives bet.

The report named Drew, Zubrow and Braunstein as bearing responsibility for management breakdowns.

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