Published January 16, 2013
NEW YORK – JPMorgan Chase & Co's board of directors cut CEO Jamie Dimon's bonus in half following an investigation into the company's $6.2 billion "London Whale" trading loss, the company said on Wednesday.
Dimon's pay was slashed even though JPMorgan, the largest U.S. bank, said fourth-quarter net income jumped 53 percent, and earnings for 2012 set a record. Fourth-quarter results were helped by increased mortgage lending profit and a decline in costs for bad loans.
"As chief executive officer, Mr. Dimon bears ultimate responsibility for the failures that led to the losses in the Chief Investment Office," the bank said in the filing.
The trading loss, which was suffered primarily in the second quarter of 2012, has been a major embarrassment for the company.
Dimon's pay for 2012 was $11.5 million, the company said in a filing with the Securities and Exchange Commission, including a salary of $1.5 million and a bonus of $10 million. In 2011 Dimon was paid $23.1 million, including the same salary and a bonus of $21.5 million.
The bank's fourth-quarter net income rose to $5.69 billion, or $1.39 a share, from $3.73 billion, or 90 cents a share, a year earlier. Results for both periods included special items.
Revenue from mortgage production, excluding losses on repurchases of past loans, increased 51 percent to $1.6 billion.
The provision for credit losses plunged 70 percent to $656 million.
"We continued to see favorable credit conditions across our wholesale loan portfolios and strong credit performance in our credit card portfolio," Dimon said in a statement.
The trading loss is known for the "London Whale" nickname that hedge funds gave to JPMorgan trader Bruno Iksil for the large positions he established from London for the company's Chief Investment Office. The trade, made with credit derivatives, became too big for the company to exit easily.
(Reporting by David Henry in New York and Rick Rothacker in Charlotte, North Carolina; Editing by Jeffrey Benkoe)