Jamie Dimon, chief executive of JPMorgan Chase, earned $23.1m in total compensation last year, an 11 per cent increase over 2010, a higher level than the heads of the other large US banks.
In its annual report, JPMorgan said Mr Dimon received $1.4m in salary, a bonus of $4.5m and $17m in stock and options. John Stumpf, chief executive of Wells Fargo, earned $19.8m, while Citigroup’s Vikram Pandit earned $14.9m.
JPMorgan revealed in a proxy filing that Mr Dimon faced a shareholder vote on whether he should continue to be both chief executive and chairman. AFSCME Employees Pension Plan, a union pension scheme, which has also pushed for a separation of the roles at Goldman Sachs, said it “would be particularly constructive” at JPMorgan. The JPMorgan board, chaired by Mr Dimon, urged shareholders to vote against the proposal.
At 38 pages this year’s annual letter from Mr Dimon, who prides himself on his missives to shareholders and has drawn praise from his letter-writing idol Warren Buffett, is his longest since becoming chief executive, as he takes on myriad topics.
While JPMorgan earned $19bn in 2011, Mr Dimon wrote that record sum was insufficient. The bank should be earning $23bn to $24bn but losses in mortgages continued to drag down its overall performance.
He took aim at regulations, particularly the so-called Durbin amendment that caps debit card fees. Mr Dimon said banks would look to mitigate the effect of the new law and the result of the “price fixing by the government [would] have the unfortunate consequence of leaving millions of Americans unbanked”.
He praised other aspects of the regulatory overhaul in the US, applauding the creation of a Financial Stability Oversight Council, designed to iron out differences between the panoply of regulatory agencies. But Mr Dimon said it was “too weak to effectively manage the overlap and complexity”.
He said “only two regulations [in the US] materially can hurt our competitive ability”, the Volcker rule, which prohibits proprietary trading and banks fear may also crimp legitimate market making activity, and restrictions on derivatives trading, which JPMorgan has said hands a competitive advantage to foreign groups such as Deutsche Bank.
International rules drew more ire. The plan to impose additional capital requirements on the largest banks around the world was “contrived, artificial and duplicative”, he said. He predicted banks would be forced to increase their capital levels beyond even the international surcharge to match competitors.
He said a reliance on models to assess banks’ resilience had dangers. “Everyone will start to have an increasingly more common view of the risk of a certain type of asset,” he said. “This is what happened in the United States when everyone thought mortgages were completely safe. Models eventually will replace judgment – and this is a terrible idea.”
Mr Dimon remains bullish on US growth and America’s property market. Pointing to a range of statistics, including increases in population and the relative cost to rent a home versus buying one, Mr Dimon said: “If one looks at the leading indicators, all signs are flashing green – the turn is coming if it is not here already.”
In particular, the deleveraging process already under way in US households will continue, putting borrowers in a better position to keep their homes. About $2tn of home loans have been refinanced during the past two years, Mr Dimon said. He expects another $2tn in mortgage refinancings during the next two years – a far higher estimate than recent projections from state-controlled mortgage financier Fannie Mae – with about $200bn of that total coming from government initiatives such as the home affordable refinance programme.
Mr Dimon acknowledged that home prices will continue to fall “a little bit, and they will stay depressed for a while”.