JPMorgan Goes Soft On Jamie Dimon Over Whale

Agenda-Setting Financial Insight.
Jan. 17 2013 12:25 PM

JPMorgan Goes Soft On Jamie Dimon Over Whale

JPMorgan has gone soft on Jamie Dimon over the so-called whale trade.

Photo by Scott Olson/Getty Images

JPMorgan has gone soft on Jamie Dimon over the so-called whale trade. The bank’s 132-page report into $6.2 billion-worth of losses dishes out blame to several now departed managers. But it just echoes the chairman and chief executive’s own mea culpa. The more than $10 million docked from Dimon’s pay will sting, but the board could do more – like removing one of his hats.

To be fair, Dimon didn’t shy away from his and the bank’s failings. After initially calling news of the money-losing trades in JPMorgan’s chief investment office last year “a tempest in a teapot,” he faced up to them, defending the bank in front of the media, lawmakers and shareholders and accepting he had not paid enough attention. The lapse was a particular blow because JPMorgan had been considered the best managed bank on Wall Street through the financial crisis.


The bank’s task force report heaps a good portion of the blame on people who reported directly to Dimon, including former CIO head Ina Drew, ex-finance chief Douglas Braunstein and former Chief Risk Officer Barry Zubrow. Drew was bundled out, Zubrow is retiring, and Braunstein was replaced as finance chief. Yet when it came to Dimon, the task force said its views were “consistent with the conclusions (Dimon) himself has reached” about the firm’s and his own shortcomings.

The board has made a statement by paying Dimon only half what he pocketed for 2011 – though $11.5 million is still a pretty good living, and reflects the bank’s record profit in 2012. Yet when a big risk management failure occurs, directors need to consider options more radical than the mostly procedural and reporting changes that have already been made.

One could be to split the roles of chairman and CEO. A well-chosen chairman provides a check on a CEO’s powers. In one indication that this can work, GMI Ratings last year concluded that an executive pulling double duty can earn 50 percent more than the total pay of two people performing the top jobs separately. An independent chairman could galvanize and maybe refresh JPMorgan’s board. Perhaps most importantly at a complex bank, a chairman could also share the load as the bank’s figurehead, allowing Dimon to spend more time making sure the next whale trade doesn’t fall through the cracks. 

Read more at Reuters Breakingviews.

Agnes T. Crane is a Reuters Breakingviews columnist, based in New York, where she covers capital markets and Latin America. She joined from Dow Jones Newswires, where she was an award-winning journalist who led a team of reporters covering the credit crisis.


Frame Game

Hard Knocks

I was hit by a teacher in an East Texas public school. It taught me nothing.

Republicans Like Scott Walker Are Building Campaigns Around Problems That Don’t Exist

Why Greenland’s “Dark Snow” Should Worry You

If You’re Outraged by the NFL, Follow This Satirical Blowhard on Twitter

The Best Way to Organize Your Fridge

The World

Iran and the U.S. Are Allies

They’re just not ready to admit it yet.

Sports Nut

Giving Up on Goodell

How the NFL lost the trust of its most loyal reporters.

Chief Justice John Roberts Says $1,000 Can’t Buy Influence in Congress. Looks Like He’s Wrong.

Farewell! Emily Bazelon on What She Will Miss About Slate.

  News & Politics
Sept. 16 2014 4:08 PM More Than Scottish Pride Scotland’s referendum isn’t about nationalism. It’s about a system that failed, and a new generation looking to take a chance on itself. 
Sept. 16 2014 2:35 PM Germany’s Nationwide Ban on Uber Lasted All of Two Weeks
The Eye
Sept. 16 2014 12:20 PM These Outdoor Cat Shelters Have More Style Than the Average Home
  Double X
The XX Factor
Sept. 15 2014 3:31 PM My Year As an Abortion Doula
  Slate Plus
Slate Plus Video
Sept. 16 2014 2:06 PM A Farewell From Emily Bazelon The former senior editor talks about her very first Slate pitch and says goodbye to the magazine.
Brow Beat
Sept. 16 2014 1:27 PM The Veronica Mars Spinoff Is Just Amusing Enough to Keep Me Watching
Future Tense
Sept. 16 2014 1:48 PM Why We Need a Federal Robotics Commission
  Health & Science
Sept. 16 2014 4:09 PM It’s All Connected What links creativity, conspiracy theories, and delusions? A phenomenon called apophenia.
Sports Nut
Sept. 15 2014 9:05 PM Giving Up on Goodell How the NFL lost the trust of its most loyal reporters.