JPMorgan CEO James Dimon, July 12, 2013 (The Associated Press)
by Gary Strauss and Tim Mullaney
Financial services giant JPMorgan, hit with $20 billion in legal fines, settlements and related costs in 2013, provided CEO Jamie Dimon $20 million in compensation last year, a 74% jump from 2012.
Dimon, who earned $11.5 million in 2012, received $18.5 million in restricted shares and $1.5 million in salary last year, according to a Securities & Exchange Commission filing Friday. It was Dimon's highest compensation package since 2011, when he received $23 million from the nation's largest bank.
Dimon's compensation package came under immediate fire from critics of the bank's missteps in mortgage lending, credit card sales and even overseeing the bank accounts of Bernard Madoff's $17 billion Ponzi scheme.
"The usual metrics for pay should be ignored for the CEO of a company that has settled multiple, egregious, firm wide illegal activities,'' said Dennis Kelleher, president of Better Markets, a shareholder advocacy group. "But no one should be surprised that a board handpicked by Jamie Dimon is giving Jamie Dimon a big raise.''
JPMorgan's board of directors said in determining Dimon's compensation that it looked at the company's long-term performance, market share gains and customer satisfaction, as well as the steps management has taken to resolve regulatory issues.
"Under Mr. Dimon's stewardship, the company has fortified its control infrastructure and processes and strengthened each of its key businesses while continuing to focus on strengthening the company's leadership capabilities,'' the board said in its filing. Directors had slashed Dimon's 2012 pay after a rogue trader caused an estimated $6 billion in trading losses.
The bulk of Dimon's compensation is in restricted shares that vest over three years.
The filing did not list other compensation, such as perks. Last year, Dimon's personal use of corporate aircraft, cars and home security was valued at $170,000. The company also didn't disclosed possible gains from vested shares or stock options. In 2012, Dimon gained $4.3 million exercising previously awarded stock options and another $3.5 million from vested shares.
Dimon, 58, has been CEO since 2005 and chairman of the board since 2006. Despite shareholder calls for the board to split the positions, directors have resisted such a move. The board's decision on Dimon's compensation package is expected to renew calls to separate the jobs.
JPMorgan reported net income of nearly $18 billion in 2013, down 16% from 2012. The company agreed to pay a record $13 billion under a Justice Department agreement over the sale of troubled mortgage securities before the 2008 financial crisis and almost $2 billion for failing to report suspicious activity by Madoff. JPMorgan has also come under scrutiny on reports that it hired children of Chinese officials to win business in China.
The bonus payout also follows a year in which JPMorgan shares trailed other major banks' share price gains.
JPMorgan shares gained 28.4% in 2013, trailing top banking rivals and the Standard & Poor's 500 Index, which climbed 29.6%.
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