Jamie Dimon, JPMorgan Chase’s chief executive, will receive an all-stock bonus of about $17m for 2009, a move that underlines the conflict facing Wall Street as public pressure over bank pay levels clashes with industry leaders’ desire to be compensated for a strong year.
The pay package awarded to Mr Dimon, who is foregoing a cash bonus for the second consecutive year, is expected to set the tone for other Wall Street banks – particularly Goldman Sachs, which is yet to reveal the extent of its bonuses to executives.
As reported by the Financial Times yesterday, Lloyd Blankfein, Goldman’s chief executive, is expected to receive an all-stock bonus along the lines of that paid to Mr Dimon. Goldman’s board has not yet met to decide on the pay of its top executives.
The US banking industry is at the centre of a political storm over its pay policies and observers had expected Mr Dimon to take a pay cut on the $28m-plus in cash and stock he received in 2007 before the financial -crisis hit.
JPMorgan’s and Goldman’s awards have been carefully watched because the two banks’ profits and share prices have rebounded faster than those of rivals such as Morgan Stanley and Citigroup.
The companies have repaid a combined $35bn in federal bail-out funds but their critics argue that their surging profits have largely been due to the government’s huge intervention in capital markets.
Mr Dimon, whose company more than doubled profits to $11.7bn last year, will receive restricted stock that begins vesting in 2012 and stock options that can be exercised from 2011. In total, the stock and options awards were valued at about $17m at yesterday’s share price. He will also be paid a $1m salary for 2009.
Other members of JPMorgan’s senior management team will receive cash and stock bonuses valued at between $4m and $14m, -regulatory filings and people close to the situation revealed. About three-quarters of these awards will be paid in shares, with the rest in cash, according to insiders.
JPMorgan’s top executives are required to keep most of their shares until they leave the company and are subject to “clawback” provisions that could force them to return part of the bonuses if they are dismissed or fail to perform their duties.
The bank also said it would introduce a non-binding shareholder vote on executive pay at this year’s annual investor meeting.
In 2009, the best paid executive after Mr Dimon was Steve Black, until recently the co-head of investment banking.
Mr Black, who worked with the recently ousted Bill Winters to steer the division to record profits, is in line for a total package of about $14m, comprising restricted stock valued at more than $11m plus cash.
Jes Staley, who succeeded Mr Black and Mr Winters at the helm of the investment bank, will be paid about $10m in cash and stock.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don’t cut articles from FT.com and redistribute by email or post to the web.