JPMorgan Chase Bank CEO Jamie Dimon got great news Friday, after a year filled with bad news for the bank he’s run since 2006.
The bank’s board of directors decided to give Dimon, a man with an estimated net worth of $400 million, a lavish $9.5 million raise, even though in 2013, JPMorgan Chase was hit with a staggering $20 billion in fines.
As a result of the crippling fines and legal expenses, JPMorgan froze salary for its rank-and-file employees — those who remained with the bank, that is, after Dimon ordered pink slips for 7,500 of his bank’s workers, putting them out on the street, jobless.
The fines stemmed largely from the bank’s sale of poorly-backed securities that led to the 2008 financial crisis, and from its failure to report signals that Bernie Madoff was running the Ponzi scheme for which he was later convicted.
The year before that, 2012, the bank lost $6.75 billion through botched trades involving credit default swaps, the same type of shaky financial instrument that played a major role in the 2008 banking debacle that set off a global economic crisis from which the United States and the world are still recovering.
After the “London Whale” scandal, the bank’s board of directors cut Dimon’s salary in half. But even though the bank was slammed with massive fines in 2013, on Friday the board restored that lost salary and then some, boosting Jamie Dimon’s paycheck by 74 percent, to $20 million.
While Jamie Dimon is often credited with guiding JPMorgan Chase through the 2008 crisis smoothly, he did it with help from the U.S. taxpayer. With Jamie Dimon at the helm, the bank was granted $25 billion out of the United States Treasury as part of the bailout known as TARP, the Troubled Asset Relief Program.
The latest boost to the Dimon salary — and to his ever-increasing personal net worth — courtesy of the bank’s board ignited immediate criticism. Even Forbes Magazine, the bible of American business, slammed the raise as “undeserved,” while one congressional Democrat, Peter Welch of Vermont, observed, “the board’s view seems to be, the bigger the fine, the bigger the bonus.”
“Welch no doubt speaks for a wide swath of the American public, which seems increasingly troubled by the huge disparity between those at the top and the bottom of the pay scales,” noted New York Times columnist James B. Stewart. “As well as the sense that Wall Street executives are still being lavishly rewarded despite behavior that plunged the country into a financial crisis and recession.”
On the other hand, Many of Jamie Dimon’s fellow multimillionaires applauded the raise. In fact, Warren Buffett — the man with the second-highest net worth in the United States — felt that the Dimon salary increase should have been even bigger.
“I think he’s worth more than that,” Buffett told The New York Times. “The shareholders of JPMorgan and the American people should be happy that Jamie Dimon has been running the bank over this period.”