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The joke of "corporate governance"
Wall Streeters are all atwitter about the comeuppance of Jamie Dimon, the haughty CEO of JPMorgan Chase.
Last year, poor Jamie presided over a $6 billion loss by the bank's chief investment office, so he's now had his own pay cut in half, knocking him down to $11.5 million. I suppose that's really a "come-downance," but by whatever name, having his paycheck whacked by JPMorgan's board of directors is widely viewed on Wall Street as a harsh rap on the knuckles.
But asked about the board's actions, Dimon himself merely said: "I respect their decision." Of course he does! He walked away with his job intact, an $11.5-million wad in his pocket, and a sly grin on his face. Indeed, many investors and bank regulators (not to mention us commoners) don't consider that level of "punishment" to be much of a deterrent to the kind of executive narcissism and carelessness that characterizes today's Wall Street elite.
Yet, members of the bank's board are actually puffing out their chests, claiming to be bold bank directors. The vote to cut Dimon's pay, they say, shows that – By Gollies – we're an effective, take-charge watchdog over the top management of the nation's biggest bank. That they can even say something so absurd speaks volumes about the laissez-faire myth that corporations don't need government regulation, since they have private boards that oversee them.
Who are JPMorgan's directors? Lee Raymond, for one. In fact, he heads the board's compensation committee and took the lead in giving Dimon his haircut. Raymond is congenitally-gentle on CEO pay, because he was a lavishly well-paid corporate chieftain himself. As CEO of Exxon Mobil for 13 years, his paycheck totaled $686 million – or $144,000 a day! Plus a car.
"Corporate governance" is a joke – and not at all funny.
"Morgan Board Uses a Pay Cut As a Message," The New York Times, January 17, 2013.
"JPMorgan's board is unchanged after $6 billion trading loss," www.cnn.com, January 15, 2013.
"JPMorgan slashes Dimon's bonus by 53%," www.cnn.com, January 16, 2013.
"A gusher from Exxon Mobil," www.jimhighower.com, May 10, 2006.
"For Leading Exxon to Its Riches, $144,573 a Day," www.nytimes.com, April 15, 2006.