JP Morgan Chase has gone soft on Jamie Dimon over the
so-called whale trade. According to the NY Times' Dealbook The bank’s report
into the $6.2 billion loss dishes out blame to several now departed managers.
But it just echoes the chairman and chief executive’s own mea culpa. The more
than $10 million docked from Mr. Dimon’s pay will sting, but the board could do
more – like removing one of his hats.
The board has made a statement by paying Mr. Dimon only half
what he pocketed for 2011 – though $11.5 million is still a pretty good living,
and reflects the bank’s record profit in 2012. Yet, when a big risk-management
failure occurs, directors need to consider options more radical than the mostly
procedural and reporting changes that have already been made.
One could be to split the roles of chairman and CEO. A
well-chosen chairman provides a check on a chief executive’s powers. In one
indication that this can work, GMI Ratings last year concluded that an
executive pulling double duty can earn 50 percent more than the total pay of
two people performing the top jobs separately. An independent chairman could
galvanize and maybe refresh JPMorgan’s board.
Perhaps most important at a complex bank, a chairman could also share
the load as the bank’s figurehead, allowing Mr. Dimon to spend more time making
sure the next whale trade doesn’t fall through the cracks…..
Stay tuned sport fans…..http://dealbook.nytimes.com/2013/01/16/tougher-line-needed-on-dimon/
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