Jamie Dimon faces compensation clawback at JP Morgan
In the immediate aftermath of the London Whale "hedging fiasco" at JPMorgan Chase, which has cost the bank $6.2 billion, I suggested that the board would be wise to exercise its right to clawback compensation from top executives.
To its credit, the board has moved to clawback bonuses paid to former CIO Ina Drew and others as punishment for the "hedging" losses. I went one step farther and suggested that clawbacks against CEO Jamie Dimon were also in order. At the very least, it was something that board ought to consider.
As it turns out, the JPMorgan board is letting it be known that it indeed intends to dock the pay of Dimon and others, notably ex-CFO Douglas Braunstein. The company will report 2012 earnings on Wednesday. The bank will also release a report on the London Whale episode, one that will likely be critical of various executives, including Drew and Braunstein, according to media reports.
I do not think this will tarnish the reputation of Dimon. In fact, it will likely enhance it. He will be able to tout that he takes clawbacks seriously, even if it extends to himself. Dimon will not suffer financially due to the reduced compensation. He made $23.1 million in 2012.
As for the bank, it has moved on from much of the mess.
- here's an item from New York