JPMorgan Board Cuts CEO Pay in Half to $11.5 Million

By Maria Aspan January 16, 2013, 9:01 a.m. EST 1 Min Read

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Jamie Dimon will somehow have to make ends meet with only $11.5 million this year.

JPMorgan Chase's (JPM) board of directors decided to cut Dimon's 2012 compensation by 53.5%, after the bank's chairman and chief executive presided over a $6 billion trading loss last year. Dimon had received $23 million in 2011 compensation, which made him the highest-paid bank CEO that year.

But his pay cut is relatively gentle, especially when compared with the token $1 that former Citigroup (NYSE:C) CEO Vikram Pandit agreed to receive during the worst of the financial crisis. Dimon will still get a flat $1.5 million in salary, unchanged from the year before.

He will also receive a $10 million bonus, although his easy cash is gone. In 2011, Dimon's compensation included a $4.5 million cash bonus and $17 million in deferred stock and options. His new pay package consists entirely of stock units that vest over three years, and the board also decided to push back for another 18 months the appreciation of some options it had given Dimon in 2008.

The board also issued its report Wednesday into the losses at the bank's chief investment office. But its findings were tempered by the $5.7 billion in fourth quarter profits JPMorgan also reported on Wednesday, bringing the bank's 2012 net income to $21.3 billion.

"The board focused on the long-term, as well as the annual, performance of the firm and on the entire range of Mr. Dimon's responsibilities, and took into consideration both the continued strong performance of the firm, and the CIO losses, including Mr. Dimon's responsibility as the firm's chief executive officer," the bank said in a regulatory filing.

Dimon, for his part, sounded chipper when asked about both the report and his slightly less extravagant paycheck.

"It was completely a board decision, I was not a part of it at all … and I respect their decision," he told reporters on a conference call Wednesday morning. "They had to look at the positives, which are large … [but] it was an embarrassing mistake."

Maria Aspan

National Editor, AMERICAN BANKER