JP Morgan Chase & Co. today announced that it will be cutting CEO Jamie Dimon's pay by more than half in the wake of an internal report that put the blame on his shoulders for a trading fiasco last year that cost the bank at least $6 billion.
Dimon had initially dismissed the loss by a trader known as the London Whale as a "tempest in a teapot." He later said he was "dead wrong" about that statement.
Dimon's compensation was cut to $11.5 million from $23 million. He gets $1.5 million salary, and $10 million in restricted stock.
JP Morgan today released an internal review of the bank's London Whale loss. The report faults senior management, some who have left the bank or have been moved from their jobs.
"Mr. Dimon bears ultimate responsibility for the failures that led to the losses in CIO and has accepted responsibility," the company said. Dimon has said "egregious mistakes" in the chief investment office led to the losses.
The report is more than a 100 pages long, but does not name the London trader involved in the bad bets.
The company also announced better-than-expected earnings today.
Earlier this week regulators put out directives that critics called vague and benign on what JP Morgan should do to avoid massive unexpected trading losses in the future. Some say that Congress, regulators and the bank have done little to prevent such billion-dollar mistakes.
But many analysts and observers of JP Morgan's loss are of the opinion that our system is fine and worked well. A bank as big as JP Morgan should be allowed to make such mistakes since it can absorb the loss, they contend.
JP Morgan received a $25 billion bailout from US taxpayers in 2008 when bad bets on mortgages and related securities by it and other large banks threatened a collapse of the US financial system.