JP Morgan paid its board chairman and chief executive, Jamie Dimon, $20 million for 2013 — a raise of 74 percent over the previous year. The handsome increase in compensation came in the same year that his bank had to pay record penalties of about $20 billion for various misdeeds.
These included $920 million in penalties for the $6 billion “London Whale” trading disaster, $13 billion in a settlement with the Justice Department for short-term mortgage tricks, $1.7 billion in fines for JPMorgan’s failure to report its suspicions of the Bernard Madoff fraud, and $410 million in penalties for its traders’ manipulation of energy prices.
At the same time, JPMorgan’s stock price rose by 21 percent last year, and its profits reached $17.9 billion. Whatever punishment JPMorgan might have given Mr. Dimon for the bank’s costly wrongs was mitigated by its board for his guiding the ship to another year of financial success.
Mr. Dimon’s influence with government officials helped JPMorgan lower its penalties, and served partly as a basis for his booming compensation. Not that Mr. Dimon or anyone else at JPMorgan cares, but many Americans are bound to be offended by the example of an executive of one of the nation’s wealthiest banks getting richly rewarded for running a company that repeatedly violated the law.
By showering more riches on a CEO who arguably should have been fired by his board, JPMorgan shows behavior that provides more evidence of the income-inequality crisis. Some reports say Congress is secretly working on tax reform. That might help, if it could be achieved in today’s Washington, but the problem is much bigger than that.