Paycheck Halved Last Year, JPMorgan Chase CEO to Get Big Pay Raise This Year

Jamie Dimon is getting a raise despite billions in penalties.

ByABC News
January 25, 2014, 9:52 AM

Jan. 25, 2014— -- intro: After overseeing JPMorgan Chase while the bank paid about $20 billion in penalties last year to federal authorities, CEO Jamie Dimon is reportedly getting a 74 percent pay raise, according to a filing with the Securities and Exchange Commission.

JPMorgan's board voted this week to increase his 2013 compensation, after cutting his pay in half by $11.5 million last year in response to the "London Whale" rogue trading debacle that cost the bank billions. Much of the increase the CEO would receive comes in the form of performance-based restricted stock.

A spokeswoman for JPMorgan Chase declined to comment. In a regulatory filing, the company said it took these factors into account in setting Dimon's pay: "...the Company’s sustained long-term performance; gains in market share and customer satisfaction; and the regulatory issues the Company has faced and the steps the Company has taken to resolve those issues, including those arising from events at Washington Mutual and Bear Stearns that predated the Company’s ownership. 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 across all levels."

On Friday, the bank's filing with the SEC indicates he is receiving $20 million for 2013, including a base salary of $1.5 million that remained flat with the prior year.

Back in 2011, he received the highest pay, $23.1 million, for any chief at a large bank.

Here's a look at some of the things that have happened since then. You decide whether he deserves a raise.

quicklist:title: JPMorgan Chase Stock is Up category:media:text: While Dimon oversaw JPMorgan during a tumultuous last 12 months, shares of the company are up over 20 percent in that period.

"It's a tough decision for the board," said James Sinegal, banking analyst with Morningstar. "The company is making billions every quarter and its stock is at an all-time high."

For comparison, the S&P Financials Index, which includes all the major banks, rose 33 percent last year.

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quicklist: title:category: Still Profitable text:

"Despite the legal costs, they've still been able to be profitable," said Aaron Boyd, director of governance research at executive compensation research firm, Equilar.

Last week, JPMorgan reported that its fourth-quarter profit fell 7.3 percent to $5.28 billion.

In October, the bank reported its first quarterly earnings loss under Dimon.

Despite all the settlements, JPMorgan still made $17.9 billion in reported net income last year.

Brian T. Foley, managing director of consulting firm Brian Foley & Co., said Dimon's latest cash compensation amount – the same $1.5 million base salary as last year without a cash bonus -- was "clearly conservative."

Foley said the board likely believes some of the settlements "appear to be the result of very aggressive actions by regulators" and that they had already imposed a "very significant pay cut" in 2012.

"When all is said and done, Jamie continues to be a strong leader," Foley said.

quicklist:title: $13 Billion Settlement Over Troubled Mortgagescategory:media:text: In November, the Justice Department announced that JPMorgan Chase agreed to pay $13 billion to settle claims over the sale of troubled mortgages.

The bank said the deal resolved most of its mortgage issues with federal authorities, but it could still face criminal charges. Many of the problems were at Bear Stearns and Washington Mutual, both of which JPMorgan bought after the government asked the bank to step in when those companies were steeped in financial difficulties at the start of the 2007-08 financial crisis.

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"I also think Dimon can also be excused for failing to foresee some of the legal issues that came out of Bear Stearns and WaMu," Sinegal told "But you also have to wonder whether the number and variety of fines and settlements over the last couple of years are indicative of widespread cultural problems at the bank."

quicklist:title: Bernie Madoff Settlement category:media:text: Earlier this month, prosecutors said the bank would be able to avoid criminal charges despite having "turned a blind eye" to evidence of the Ponzi scheme of Bernie Madoff, whose principal accounts were held by the bank for 22 years and were central to his multi-billion dollar fraud. The bank agreed to pay $1.7 billion to defer for two years criminal charges that it failed to report suspicious activity that might have tipped off investigators to Madoff's scheme years earlier and $350 million to cover civil penalties for violations of the Bank Secrecy Act. JPMorgan also agreed to pay $543 million to settle civil suits filed by victims of Madoff's Ponzi scheme.

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quicklist:title: Averting More Lawsuits category:media:text: Though the recent settlements are costing the bank billions, the financial and reputational damage could have potentially been worse had it not been for Dimon's leadership, said Boyd.

"Just hours before the Justice Department was planning to announce civil charges against JPMorgan over its sales of shaky mortgage investments in September, Mr. Dimon personally reached out to Attorney General Eric H. Holder Jr. — a move that averted a lawsuit and ultimately resulted in the brokered deal," the New York Times reported.

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quicklist:title: Dimon in Lower Standing? category:media:text:

"Dimon's standing in the investment community is about as low as it's ever been, and it seems like some JPM directors are feeling the same way," Sinegal said.

The New York Times reported that a "vocal minority" within JPMorgan's board was in favor of keeping his pay flat this year.

Boyd said any board considers many factors in determining a CEO's pay, including the bottom line, public perception, and the proper incentives for a chief executive. And he said the public, including the media, will never know all of the reasons.

"They cut his pay last year obviously after the London trading whale issue," Boyd said. "They're trying to weigh what's an appropriate amount. They're trying to determine what they should do."

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quicklist:title: Third Place in Pay category:media: text: While most people might be content with $11.5 million in compensation, other CEOs of large banks are receiving comparable or more money.

Goldman Sachs CEO Lloyd Blankfein received about $21 million in compensation last year; Wells Fargo's John Stumpf received $19.3 million while Citigroup's Michael Corbat received $11.5 million; Morgan Stanley's James Gorman received $9.75 million, all according to Equilar's compensation calculations for the chiefs of the country's biggest banks.

Would you give the JPMorgan chief a raise? Sound off in the comment section below.

ABC News' Brian Ross and Aaron Katersky contributed to this report.