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March 21, 2013 6:07 pm
Jamie Dimon is richer than I am. That’s only a guess on my part, because I haven’t seen his tax returns or financial statements, but I think it’s fair to say the available evidence points in that direction.
Just last year, for example, JPMorgan Chase’s chairman and chief executive took a pay cut and still received $11.5m – which is more than I’m going to make in this life unless I give up journalism and start working as a flak for an investment bank, a cocaine cartel or some high-powered outfit like that.
Mind you, I’m not complaining. My older relatives knew the squalor of the Lower East Side, but I grew up in a house in the suburbs and have lived fairly comfortably ever since. Apart from a few nights spent in London with people who believe “eating is cheating”, as they say over there on the express lane to inebriation, I have never gone to bed hungry in my life.
I worry about how this disparity in wealth is affecting Mr Dimon.
My concern on this score dates back to a colloquy last month involving Mr Dimon and the veteran bank analyst, Mike Mayo. The two have battled for years on earnings calls, and their routines have evolved into the Wall Street equivalent of the old Martin and Lewis act. For those of you who haven’t caught them live, Mr Dimon plays the suave Dean Martin of the financial world, trying to go about his business amid the turmoil triggered by the consistently insistent Mr Mayo in the role of Jerry Lewis.
At the JPMorgan investor day in February, Mr Mayo asked Mr Dimon if he agreed with an argument made by UBS that affluent customers would prefer to deposit their money in banks with higher ratios of capital to assets. As light on his feet as the late Dino (an underrated dancer, in my book), Mr Dimon sidestepped the question.
“So, you would go to UBS and not JPMorgan?” he asked Mr Mayo. The analyst hemmed and hawed as the audience twittered. “I didn’t say that. That’s their argument,” he responded, setting up Mr Dimon’s big punch line.
“That’s why I’m richer than you,” Mr Dimon said.
The crowd roared, as it often does for Mr Dimon. I have interviewed him a few times and there is no denying his star power. He’s the kind of executive you can imagine pursuing a career in government or the media. He has pizzazz.
But Mr Dimon’s Mayo slap reminded me of the inappropriate jokes Seth MacFarlane told at this year’s Oscars; once the laughter died down, awkward questions arose. I was left wondering exactly who Mr Dimon is answerable to these days. If a long-time analyst with a legitimate question can be dismissed – and dissed, as they say in the schoolyards – on puerile net-worth grounds, who merits Mr Dimon’s attention? Who can really talk to him?
Mr Dimon is richer than the president. It’s likely he’s richer than every bank examiner there is, every cop on every beat and every teacher in every school. There is virtually no end to the people who have less than he has. They are everywhere.
Mr Dimon got guffaws when he paid tribute to his own wealth last month, but his witticisms wore thin last week when the US Senate permanent subcommittee on investigations released its report on the $6bn loss registered last year by JPMorgan’s chief investment office on its so-called London Whale trades.
Only weeks after Mr Dimon appeared in public in mocking mode, the Senate report raised questions about the fundamental quality of supervision at JPMorgan. It alleged that executives at the bank mismarked trading positions “to hide hundreds of millions of dollars in losses; disregarded multiple internal indicators of increasing risk; manipulated models; dodged [Office of the Comptroller of the Currency] oversight; and misinformed investors, regulators and the public about the nature of its risky derivatives trading”.
All this suggests Mr Dimon might be better off if he had more people around who could ask him questions, even unwelcome ones of the Mayo variety. Perhaps one of these questioners could serve as a non-executive chairman at JPMorgan (to ease the transition, the board could possibly look for someone richer than Mr Dimon so he could bounce his ideas off someone he could respect).
But I’m getting above my pay grade on this one. They’ve got a guy at JPMorgan to make these decisions. He’s richer than I am.
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