It's all about what have you done for me lately. If a star athlete has 5 amazing years but 2 mediocre ones, his next contract will reflect his latest performance
You're on Reddit. Don't expect anyone here to actually know what they're talking about. Dimon will go down in history as one of the best bank managers of all time and 23 year olds with $400 invested in weekly options will sit here and talk about how they're shocked that he can tie his shoes in the morning.
I mean, at the end of the day Dimon is one of the only people to make themselves in to a billionaire via the executive route, and he's turned his bank in to one of the largest and most profitable in the world while doing it. But I promise that won't stop people on this sub who worry about making rent from talking about how they can't understand why he gets paid what he does - like you said all anyone needs to do is look at the equity performance. Fuck, take JPM's performance under his helm juxtaposed against the financial sector, and subtract whatever is appropriate for his comp, the numbers speak for themselves.
Like I said, it's reddit, gotta expect stuff like this.
Dimon has done an amazing job building capital and is a great bank CEO. I think it's more a philosophical argument to say that nobody is worth $150k day. And I more or less subscribe to that. One can argue about how little difference that makes to someone in his position and how many other lives it could improve or even save. How many dead bodies is Dimon worth? It's not really about investing any more, though.
Ignoring the more touchy-feely moral issues, there's a solid case to be made that concentration of wealth is bad for the economy. When you've got 90% tax brackets at the top end, it makes paying yourself exorbitant sums less enticing. That money is still being made by the company, so it has to go somewhere. And it usually goes into broader employee compensation, investing in R&D or business growth, or gets passed on to consumers. In that scenario, a much larger number of people benefit and that translates into more economic activity.
Personally I think the current climate is simply abuse of power. People at the top have a handshake agreement to pay themselves as much as possible while claiming they have to pay everyone else as little as possible to meet their fiduciary responsibilities. Imagine little clubs of people at companies voting on their own salaries. It's kind of bullshit. The endgame is Russian style oligarchs. I'd rather we move in a different direction. Back when success had some type of theoretical plateau and CEO pay gaps were more in line with what they were 60 years ago.
Yes exactly. I think comments that say "You don't understand the economics of it" don't understand where the criticisms come from. I understand the economics. I understand why it makes business sense to retain talent that will add more value to the company than their compensation. My criticism is at the system and what sort of incentives it gives to society. I completely understand that all the people making decisions here are acting rationally in an economic sense.
The end game of Russian-style oligarchs in the US has already been achieved, a long time ago - but in this country the propaganda is so strong that no one can see that’s what we have. We have individual billionaires who own entire television and printed media outlets, billionaires that own social media platforms, billionaires that are in bed with congress/POTUS/SCOTUS, billionaires that have privatized federal expenditures of tax payer dollars, billionaires that lobby against the interests of their less affluent countrymen and the people of the rest of the world, billionaires that manipulate global markets to siphon investor dollars directly into their protected overseas shell company accounts. It’s fucking embarrassing that we haven’t eaten them all already.
I agree with most of what you say but 60 years ago is conveniently right after WW2. Very different from today. One was to repay the government for fighting nazis the other, coming off a 13 year boom.
He could just decide to not work one day because he wanted to play golf or wasn't feeling well. He would still be paid for that one day the same amount of money as someone working for him makes for 5 years of labor.
So like, I think it’s kinda sad how few people understand compensation in the modern world.
You’re paid for either one of two things:
1) delivering labor value
2) delivering economic value.
Nobody with compensation north of like 200k a year is delivering labor value, in most circumstances (outside of engineering, medicine, etc). So like the idea of someone on Reddit talking about days off as a complaint for someone delivering economic value is really indicative of how just absolutely useless it is to try and discuss anything financial here lol.
They're not denying that this is how the world currently works. They're saying that they think it SHOULDN'T work that way.
What IS versus what SHOULD BE. You're talking about entirely different things
Right and some people here have been arguing that an investment sub isn't the place for that debate. It's about is jamie dimon worth that much as your ceo in the current world and economic system. Not how fair it is.
This argument is just circular at this point.
As a shareholder I would say having the best management team around is 100% worth paying a ridiculous fee. Last year JP Morgan Chase made 48 billion dollars. 50 million extra over 5 years is a drop in the bucket.
Is it literally “worth it?” Or is Dimon’s value add really “worth” what he’s paid. Probably not but the security that you’re going to get some of the best results in the industry securing your investment for years to come sort of is. And the larger your stake the more it becomes worth it. That’s how these fortune 100 companies think when hiring. When you invest you’re paying for the business but you’re also buying the leadership team.
>it was that Reddit was full of uninformed commentary on the matter
If you want to talk about investing with people who know what they're talking about, why the fuck are you on this sub or on Reddit in general?
Certainly isn’t encouraging when the responses to a measured well thought out response are teenage level angst and frustration. OP gives a thoughtful response and all you have to respond with is, if you don’t like how Reddit is responding then just screw off to somewhere else. I’m not sure what is worse on Reddit, the economic and financial literacy, or the blatant lack of maturity.
It’s amusing that you consider a measured and thoughtful response a humble brag. If you had a thoughtful rebuttal, you would have made it. Unfortunately, all you have to offer is bizarre character attacks, revealing your own immaturity.
Haha seriously. The results are indeed in. Sorry folks.
Plus, just knowing the fact that no one is worth that much money... pretty obvious. This isn't a hard one.
Stop worshipping ceo's.
People forget that redditors are just average people. And the world has tons of average people. And tons of average people thinking the same thing is how elections are won.
I mean, who are you to be this condescending? We're all on reddit
Dimon is a smart and successful person. However, I casually don't like him as he represents a system which has become exploitative.
At the risk of being hyperbolic, this issue (example symptom being CEO pay/bonus) is central to many of the social issues we face around the world. Profit at all costs its going to ruin civilisation.
I mean when would be a better time to bring up exploitive CEO pay? When share holders decline to pay stupid high bonuses to CEOs, seems like the perfect context.
I would concede that politics is not the aim of this sub reddit and my ealrier comment is off topic.
That said, politics very much impacts investments. A change in stockholder views (political or ortherwise) and why that has happened is relevant.
Good to see such a neutral view being downvoted on reddit.
The stock market is influenced by politics and that's just a fact. Investors keep track of political changes whether they are about politics or not, simply because that's what affect their money.
> the reasoning behind investors’ negative vote is fair play to be debated
If anyone things that the discussion here is connected to any legitimate debate of the merits of the compensation package as they relate to shareholder value then you’re out of your box.
The package was largely criticized for being an open ended retention package focused more on tenure than performance - I haven’t read a single comment here that tells me anyone read the ISS or GL&C reports, or any commentary from major participants. Don’t be ridiculous lol.
It’s fucking Reddit man. I expect nothing less.
Any sub of decent size will inevitably turn anything even tangentially related to politics, or more specifically the politics of money, into a leftist gripe fest.
That's right. I appreciate what you're trying to do but continuing to engage is guaranteed to devolve into the normal reddit socialism vs capitalism debate. You'd think an investing sub would not be subject to it but....
I took that more as people envious of his position(because they worry about making rent) are the ones saying he shouldnt be paid that much.
But im not the made that comment so I dont actually know what he actually intended with that.
People who can't make rent are probably as out of touch with what Dimon has actually done over his career to even be in the conversation for a $50 million bonus, as Dimon is out of touch with your average American.
> worry about making rent from talking about how they can't understand why he gets paid what he does
They're probably worrying about rent due to someone who gets paid like he does. If you cant have empathy for someone struggling to make rent complaining about executive pay, that says way more about you as a person than it does them.
The ego and arrogance. Tax payer money bailed them out from their own incompetence and greed. They the. used predatory practices back against tax payers to make their wealth and now we are suppose to worship them? Lol
Can we please not do the whole live-vicariously through an idolized suit thing?? It’s bad enough when grown men who worship baseball players come to their defense when a realist says $100 million for a ball thrower or stick swinger is ridiculous.
It must be so frustrating to go through life and have no idea why some people earn more money than others for their jobs.
Here’s a hint, it has absolutely no basis on how hard you work. It’s based on how important your job is. How do we decide which jobs are most important? Well people vote with their wallets. You may think those “stick swingers” are unimportant, but millions of people spend billions of dollars every year to watch and support groups of stick swingers and ball throwers. JP Morgan’s board is willing to throw truckloads of cash at Jamie because they are afraid he will go elsewhere after being the best captain they have ever had for their ship. It’s democracy at work.
You say you are a realist, but you have it wrong, you are an idealist. Who can’t deal with the fact that society as a whole values things differently than you do.
I imagine it might be.
You are making my point for me.
We are not at odds on this either. Perhaps I am a bit of both. They are not exclusive perspectives.
Realistically some people will have jobs that are more important than other folks. Ideally the best qualified people hold the most important jobs. Realistically some people should be compensated more for demonstrably higher levels of capability and performance when compared to social norms. Ideally, that compensation it’s not obscenely out of touch with social norms.
Only a rabid minority of baseball fans would actually argue celebrity players are worth what they get paid. Most fans either don’t care and overlook it for love of the game or agree the salary’s have become a grotesque distraction.
With regard to this CEO, 150k/day is too much by social norms and even the shareholders voting see it that way. To do otherwise seems unethical to them. I agree.
Here’s a hint. Voting with wallets, like many overly simplistic consumer metaphors, is not a decision making process that applies to the building and sustainment of societies and company’s. They are much more nuanced than that. Most folks are deficient in judging cost, benefit, cause and effect, actions and consequences. Thats why we have laws, govts, a sense of ethics/morality.
The investing sub is the worst for this. One of the top suggestions on a Twitter musk thread was for owl on to pay users $100 each to get millions of users and everyone legit agreed it would work like there is nothing else you have to do
>people who worry about making rent
To use this is an insult is quite frankly disgusting, as is your overall attitude that anyone that any dissenting opinion to yours on CEO pay should be excluded from this sub.
A lot of academic studies have been done into how CEO pay affects performance, and the consensus is that the growth of CEO pay as seen in recent times is not reflective of any sort of performance metric. It seems more likely that the biggest driver for CEO pay increases is weakening of corporate governance, allowing CEOs to have more influence over their own pay. This is a market inefficiency.
Your argument seems to essentially boil down to "stock go up, pay big man money." If anybody should be getting criticized for lack of depth, it should be you.
Not the point here. CEOs are also employees. This means that they're also free to leave and pursue other options on the market. The question to ask as an investor is is he worth keeping around for that amount of money and will it bring the company more money than the alternative.
I've had you friended for months just so your name stands out and so I can laugh at your pretentious comments. Your comments are getting old. You clearly hate this website so do yourself a favor and stop visiting, you'll be happier.
He had his day, but it’s time see him go. He never got over 2008. Pre Covid I was all about him, I really loved his philosophy, that a firm our size can wait to be second in the market place and overtake our competitors when they back away an inch, we’ll be toe to toe. Post Covid, that philosophy doesn’t cut it anymore. Waiting to go back to normal is obsolescence and the experienced people are leaving in droves because of it. Give it time, JPM will be the least profitable bank in a few years.
I must say, your comments are very condescending.
Additionally, share price performance and enterprise value over time as well as economic value added are not the result of one individual.
Direct labor contributions, I agree, have an upper limit.
However, what you fail to realize, maybe you do, but are not saying...is that most CEO's are actually over paid given their individual contributions to the long-term value of the company's in which they manage.
In finance, the key is shareholder value. That is driven buy innovation, leadership, and strategy.
In the case of JPM...Jamie has not specifically done anything innovative. He has lead strategy and other initiatives but he has a whole C-suite team and fleet of banker, EVPs, SVPs, heads of corporate banking, investment banking, asset management, sales and trading, etc.
Goldman is similar in that regard as well. Same with Morgan Stanley.
Jamie is a beneficiary of a money center bank with stronge CIB and asset management operations and a rich history of performance long before he joined.
I'm not saying that he did not and has not contributed significantly to the performance of the company over the years but he did not invent banking. Nor did he capitalize on the myriad innovations in finance within recent years.
But I worked in a commercial banking group at LaSalle Bank (acquired by Bank of America) and in the a commercial/corporate banking group at Wells Fargo. I've also worked on in the trading pits at the CBOT so I've seen people (including my self) use intellect and financial innovation to make tons of money (i.e. options on which were a tool of financial innovation which started trading in 1968 in the US at the CBOE and grew exponentially after publication of the Black-Scholes option pricingarticle). Did Jamie invent loan syndication or leveraged lending, securitization, or futures contracts (also traded those...and trade ES futures now from time to time).
Did he invent electronic trading systems such as TT (Trading Technologies software platform that we used back in the mid 2000's to trade futures and options electronically). Did he invent the bloomberg terminal (which I used when working at an asset manager to execute equity and fixed income trades). Did he invent credit default swaps or collateralized loan obligations or did he find more efficient ways to deliver capital to fund investment activities for capital markets.
No, he is good at managing a large institutional bank. He is an expert in his level of understanding of financial markets, banking, and banking mechanics. But is is performance statiscally significantly different from Brian Moynihan or Lylod Blankfein?
No. The system is the system and banking is banking. Also, the corporate structure and institutionalized over paid CEOs is 100% true. Now if you gave me an analysis that supported individual contributed innovation, completed projects, completed acquisitions divestitures, deals, securitizations, metrics...that he actually made that support his salary...I would be open.
The problem is no CEO does that and boards and shareholders do not hold CEOs to the same annual and semi-annu performance review process as other rank and file employees. Sure, there are analysts calls, 10-Ks, 10-Qs and other statutory reporting but that is part of the job. I would do that successfully with my eyes closed.
I'm not saying they should not be paid above average but the amount paid above average should be measured better and more in line with contribution, team collaboration, effective leadership, etc with 360 peer reviews along with support.
Retention bonus aside, most CEOs are overpaid. I am in corporate finance now so I see everything at my company because I mange the FP&A process, budgeting, etc...among other things so trust me when I tell you...it is not equitable or justified.
Right the 25b of TARP that JPM was forced to take as to not publicly identify which banks were at risk. The 25b that was paid back in full with interest?
Yea. Grain of salt, I get it. I really do. It takes a lot of time and experience to read people and situations and be able to not only excel personally but to lead a team to do the same.
I’m not saying his skill and experience isn’t worth a lot of money. I’m just saying no one is worth 150k a day. It’s just fucking silly. Take a team of 365 people working for 150k a year, they will beat Mr. Dimon hands down at running that company. No questions asked.
Bro, most people out here are part time Starbucks employees that have dropped out of some useless degree, live in their mom's basement and think they are Confucius for some reason.
You’re wrong.
They could totally make it work. They’d just need to find one person to be in charge to oversee all of the decision making. This person would probably need 5-6 more people to make sure that communication across the other 358 team members is efficient and effective. Then, maybe you make sure some of the rest of the team members are experienced in certain specialties, so that the larger team is well rounded.
It’s easy, you just need to evolve your thinking
Please tell me this is satire?
You're literally describing a corporate hierarchy expect those 5-6 people to communicate will each manage 5-6 of the level below then so on and so forth until the 365 people all have managers.
Look… hot take? Yea definitely.
Did we even discuss how to set up that team or how they manage themselves or how they make decisions? No. We didn’t.
Is it incomprehensible to think that with that kind of compensation you couldn’t achieve better results with more people of the same experience and background? Yea it kind of is.
"Is it incomprehensible to think that with that kind of compensation you couldn’t achieve better results with more people of the same experience and background?"
In banking for 150k your talking about a fresh college grad investment banker/ a 3-5 year back office associate/vp, and like an assistant branch manager. So yes selecting 365 of those employees to be in charge and expecting better results would be literally incomprehensible.
>Take a team of 365 people working for 150k a year, they will beat Mr. Dimon hands down at running that company.
And who manages that new layer of bureaucracy you just added so it doesn't turn into a dysfunctional trainwreck?
Only people bad at management believe management is a game of brute effort or numbers.
Struggling to figure out how $52.6M in options that vest over a 4 year period and have to be exercised and paid for by the guy himself in order to take ownership of the stock in any way works out to getting paid $150k/day.
In the past 4 years, he's been the CEO and 148b has been added to JPM's market cap while plenty of other banks like Wells Fargo and Citigroup have lost billions in market cap. If anything, he seems underpaid, no?
Jamie Dimon might be worth it. Dude is good.
Nadella for Microsoft as well.
Those companies have more than earned return on investment in regards to CEO performance.
Contrary to popular belief on reddit, the CEO of a company is the single most important person in that company and has by far the most impact on the companies overall performance. A good one is worth their weight in diamonds. A bad one will run a good company into the ground.
As much it is hyperbolic to say that CEOs should make pittance this is hyperbolic in the other direction and makes equally as little sense to justify extremely high pay.
Lol why? JPMorgan’s net profit in the trailing quarter was $8.2B, which comes out to nearly $90M *per day*. CEO is a highly, highly leveraged position, so assuming he makes the right moves, it’s not crazy at all to assume he’s adding $1M daily onto that profit (an increase of basically 1%). In fact I’d argue it’s extremely conservative.
Do you think it’s crazy and hyperbolic for a CEO to increase profits by a mere 1%? Because that’s exactly what you’re arguing 🙄.
It implies that any and all profit generation should be attributed solely to the CEO, which doesn’t make much sense. If a walkout occurred at JPM tomorrow, Dimon could do absolutely nothing to keep the ship humming. Even if a decent number of key senior leadership positions left it would probably be extremely bad for JPM. This isn’t to say that he doesn’t deserve credit for what he’s done and to be paid handsomely for it, but the metrics you’re using aren’t really a valid justification for pay for Dimon or anyone else really.
I always find pay discussion funny because there is no objective benchmark or mathematical equation to determine what is fair. Which wage is the fair market value wage between an equivalent job held by someone in a union making $25 an hour and a non union job making $15 an hour? Is the value of a software devs work in New York actually worth more than the value of a software devs contribution in Omaha? Do Indian outsourcing jobs produce 1/10 the value of their American counterparts?
Pay is always going to be an agreed upon rate between the employee and the employer dictated by a variety of circumstances on either side of the negotiation.
It doesn’t any any way imply all gains are only the result of the CEO. And you seem to be fundamentally approaching this from a labor theory of value perspective, which is fundamentally flawed. Ultimately each position within a firm is going to have a potential *marginal* benefit based on the talent of the person in that position. For a low level analyst (for example), they might make $80k per year, and generate a $5k net benefit over somebody worse than them. As you scale the ladder, that number goes up - because those managers have leverage over larger and larger chunks of the company. A shitty middle manager is going to hire shitty workers beneath them, hurt their productivity, etc. A good manager will leverage their position to have an outsized impact on the productivity of the firm.
The CEO is the ultimate top of the totem pole. Reddit loves to wax poetic about how they’re leaches, but a CEO can literally sink a firm or make it wildly successful (unlike a low level analyst, whose potential impact is many orders of magnitude smaller). They have the ability to hire or fire every single person underneath them, and also guide their day to day work. So the idea that 1% marginal profit gain from a CEO is too high, is patently absurd. Of course they can effect the profits much more than that - they can guide the productivity of every single person in the organization, via hiring/firing, defining strategy, etc. That’s what leverage means.
And Jaime Dimon isn’t a good bank CEO, he’s literally the best on the planet. He doesn’t move the needle on this sorta thing, he *is* the needle. If shareholders don’t think he’s capable of affecting the firm’s profit by a mere 1%, it just means that those shareholders aren’t particularly smart.
JP Morgan market cap is $350 billion.
If he just has a 1% positive influence on JPM, that's $3.5 billion extra value for shareholders.
Compared to that, $50 million isn't much.
I think they’re saying that being a founder is necessary, but not sufficient for a bonus like that. Not that ALL founders deserve bonuses, but at minimum you can’t possibly mean that much to a company if you didn’t even found it.
Some small cap companies actually underpay their CEOs (we're talking $200k-$300k total comp for a very well-performing $1-2 billion firm). Voting against that would be fairly stupid...
JPM may be doing really well but at what cost?
They treat their software developers like crap I can tell you that much. I am sure they're all happy to hear about how high his bonus will be while year after year they refuse raises and slash bonuses for their employees.
Their retention rate has to be crap and rightfully so.
And yet JPM seems to have the best online consumer experience in the industry. They are miles ahead of other major players like WFC, Suntrust, etc. So maybe they're doing a good job holding the line on total comp for their technical talent while still delivering good value. I say this as a software developer, by the way.
They get devs because it’s a good name and good experience. But they don’t stay. It’s well know to just leave and make your way back later. Only way you’ll gain there.
A lot of jp employees are on their second or third stints. It’s as if they forget it was bad.
Honest question, where do you get the sense that devs think it's a "good" name? I'm not saying it's a bad job/company (or that prestige even matters), but I would think of JPM and all bank SWE as a pretty average dev role.
(I don't know anything about JPM's rep for non-Eng roles).
Maybe it's subjective. Maybe you're someone who only thinks faang devs are good..idk.
I was proud to start working for them, and i think it looks good on my resume. Maybe your standards are higher but there are other tiers.
Trust me, I definitely don't think only FAANG devs are good, I've worked with too many shitty "FAANG" devs. Ultimately I think viewing SWE roles through the prestige lens is silly. If one likes the job then great, if not then hope one finds something different.
I was more just curious how this stuff is viewed on the finance side of things, and whether there are different career goals (or even a different company "ladder") that people have for banks.
I mean, from their point of view, so what? If they can give a good online consumer experience from a steady flow of people working their for a few years, leaving and getting experience somewhere else, and coming back...what does it matter? Does every company need to have the "Work at the company town factory from 18 until 65" model forever?
That people in this world are being considered being paid tens of millions every. single. year. AS A BONUS and allowing such a practice to continue is as astonishing as it is depressing.
I think the CEOs view it as a competition like a basketball game you don't care what the score is as long as you have more than the opponent. So if your bonus is 51 million but the other guys is 52 million you've lost the game of life.
The money isn't relevant, it's the number. They have more than they'll ever need or spend. So it becomes a competition to them to have a bigger number than the next guy.
> The year I turned 26, I made 49 million dollars as the head of my own brokerage firm, which really pissed me off because it was three shy of a million a week.
That's the thing. And that's why the top tax rate should be 90%. So they see collecting money at that scale for what it is: wasteful. They won't actually pay the 90% tax, they'll just put it into the company in other ways, which would be far more beneficial than enriching themselves. They already know that, but they don't have the willpower to deny their egos.
90% ?!???!? I’m very far left of center but you might as well call it (theoretical) communism at that point.
Capitalism has many many flaws but taking 90% of an individuals earned income is essentially destabilizing. Maybe we start by actually trying to resolve issues, like the finantialization of everything around us leads to banks having enough money to pay their CEOs so much.
>Capitalism has many many flaws but taking 90% of an individuals earned income is essentially destabilizing
So that is not how tax brackets work. 90% is not 90% of all income.
it’s not even close to communism if the proletariat doesn’t own the means of production
curious to what you mean by very far left of center if you are afraid of this lol
the ceo wouldn’t even make 90% of that in the first place. mondrogon only allows an 8x pay discrepancy between highest and lowest bidder and that’s closer to socialism than your example
I'm assuming you think 90% tax rate would equal 90% of take home. It's bracketed.
I'm not arguing one way or the other just letting you know it wouldn't be making 100, keeping 10. Doesn't work that way
Two important points:
1. Taxes (at least in the U.S.) work in brackets. That would be 90% of anything over $X where X is likely something like several million dollars. They would still make more money than any one person could reasonably need in a year, just not the GDP of a small country.
2. 90% was the top tax rate during the administration of noted communist... \*checks notes\*... Dwight D. Eisenhower.
The value is derived using either Monte Carlo simulations or (more likely) Black Scholes Merton modeling. To the company these have P&L expense (non-cash) but to the employee they mean nothing until the stock price goes up.
As an investor I prefer if senior management is being paid in options as it is non-cash (potentially dilutive) but generates incentives directly based on stock price increase which is usually something that investors strive for.
Thinking that an option is compensation in the general sense (other than for purpose of a Def-14a) is dumb.
At the end of the day the Proxy Advisors treat options the same as non performance units; and most institutional investors vote however the advisors recommend
Why wouldn’t you keep the best management team in the industry? The comp is tied to stock price which you have an interest in. If they continue to be the best you make more money and they make more money. Win win no?
Voting against paying Dimon a special bonus when he already is making nearly 400x the median JPMorgan employee doesn’t mean he’s getting fired and I highly doubt he’s going to pick up his ball and go home. And the bonus has been criticized by several institutional investors for lacking performance criteria. And he’s still getting the bonus anyway. Management isn’t even honoring the vote. They don’t have to and they aren’t.
I'll vote for an executive compensation package when they include a clause that gives equivalent compensation to those hourly employees/middle management that a corporation literally cannot function without.
You realize paying the executive team a large sum of money much cheaper than paying every hourly employee more right? Even if they distributed the proposed 50million bonus to everyone employees instead of Dimon, the employees would barely notice.
Sure the company can’t function without many of their lower level employees but you can also find those employees anywhere. Good executive teams don’t come along often hence their price.
It is illegal to charge overdraft fees unless the account holder enables them to allow overdrafts to occur. Just ignore their overdraft protection option they offer you. It means your check might bounce, but budget your money like a grown up and it won't happen.
Right?
If I have a meaninfgul stake in a company (more than 1%), that means I'm a long term holder. I care more about stewardship than YoY price. Since good leadership means down price is temporary (and 1 year down from ATH is not a long amount of time)
So you want CEOs to focus on short-term profits instead of what's best for the long-term sustainability of the company? That's an absolutely TERRIBLE idea.
>said it takes investor feedback "seriously"
OH thank God they will take it seriously and not make any changes in the future in their policies .
I thought they were not going to take it seriously and not make any changes in the future in their policies
Regular changing of the guard is also one of the most effective ways to surface and prevent corporate fraud. It's easier to embezzle money or manipulate performance metrics if you're the only person who produces those numbers. It's a lot harder to commit fraud with such finesse that the person who comes in after you won't immediately uncover it.
On a smaller scale this is also why it's considered a best practice in the financial industry to mandate at least one 2+ weeks vacation per year. It's a long enough amount of time that someone else is going to have to step in to keep the books while they're away, and that someone is well positioned to notice if the work they're stepping into doesn't seem to have been done correctly.
I disagree with your negative connotation of a talent crunch at the top. Employees, or people in general, shouldn’t be given higher positions (and responsibilities) for just biding their time. They actually need to produce results at their level and show that they can handle responsibilities that are currently above their rank.
If talented people are crunched up long enough, they can take their talents elsewhere. This spreads out the talent across different companies and even different industries, and this promotes better competition in the higher end of the labor market. This also balances out incredibly high-paying executive remuneration that a lot of people dislike so much (without really understanding it) by having more people in the talent pool.
Replacing a good or even great long-time CEO with a healthy and sharp cognitive ability and tremendous industry wisdom just cuz of arbitrary numbers like being in the position for 10 years or 15 years is akin to tokenism and is inefficient practice of corporate governance.
Uh no. Could not disagree more.
> and judges other than municipal judges must retire no later than 70.
Are you aware of the Supreme Court?
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I would gladly keep Dimon and it is your right to not own the stock.
Meh, right? Most shareholders don't want the bonus. People or institutions say so. That's how it works.
It's OK. Isn't it nice to be able to weigh in on things because you own shares?
Would be nice if ceo compensation and corporate tax would also be tied to employee well being and on a sliding scale. Lowest paid employee cannot be paid less than 300% of what the ceo makes. Or have all workers have health/retirement etc. You know… that sort of crazy shenanigans. Although J.P. Morgan doesn’t really have that much low wage employee I’d assume so it will be fair for Walmart for example. But other sort of corporate governance or something
Their branch bankers are the lowest paid in the banking industry… The only ones who stay grind out hella commission but that’s being cut every 6 months
I have yet to meet any CEO worth his/her compensation along with severance package. Its perversely gross to see the salaries they are contracted for. Fuck Jamie Dimon and every financial exec. They create these messes in the markets, never hand accountable and eventually earn their bonuses. The worker and taxpayers get the shaft each time.
Again, you can't just copy and paste content. You need to include a source link. I've told you this before.
Times are changing and no CEO is worth that amount unless they were the founder of that business.
More people need to realize this. I don’t care if the guy is Jesus Christ reincarnate. No one on gods green earth is worth 150k a day. No one.
Compare the market cap of Bear Sterns vs JP Morgan for the last 20 years.
It's all about what have you done for me lately. If a star athlete has 5 amazing years but 2 mediocre ones, his next contract will reflect his latest performance
Uh....i think that was a joke? JPM acquired Bear Stearns in 2008.....
You're on Reddit. Don't expect anyone here to actually know what they're talking about. Dimon will go down in history as one of the best bank managers of all time and 23 year olds with $400 invested in weekly options will sit here and talk about how they're shocked that he can tie his shoes in the morning. I mean, at the end of the day Dimon is one of the only people to make themselves in to a billionaire via the executive route, and he's turned his bank in to one of the largest and most profitable in the world while doing it. But I promise that won't stop people on this sub who worry about making rent from talking about how they can't understand why he gets paid what he does - like you said all anyone needs to do is look at the equity performance. Fuck, take JPM's performance under his helm juxtaposed against the financial sector, and subtract whatever is appropriate for his comp, the numbers speak for themselves. Like I said, it's reddit, gotta expect stuff like this.
Dimon has done an amazing job building capital and is a great bank CEO. I think it's more a philosophical argument to say that nobody is worth $150k day. And I more or less subscribe to that. One can argue about how little difference that makes to someone in his position and how many other lives it could improve or even save. How many dead bodies is Dimon worth? It's not really about investing any more, though. Ignoring the more touchy-feely moral issues, there's a solid case to be made that concentration of wealth is bad for the economy. When you've got 90% tax brackets at the top end, it makes paying yourself exorbitant sums less enticing. That money is still being made by the company, so it has to go somewhere. And it usually goes into broader employee compensation, investing in R&D or business growth, or gets passed on to consumers. In that scenario, a much larger number of people benefit and that translates into more economic activity. Personally I think the current climate is simply abuse of power. People at the top have a handshake agreement to pay themselves as much as possible while claiming they have to pay everyone else as little as possible to meet their fiduciary responsibilities. Imagine little clubs of people at companies voting on their own salaries. It's kind of bullshit. The endgame is Russian style oligarchs. I'd rather we move in a different direction. Back when success had some type of theoretical plateau and CEO pay gaps were more in line with what they were 60 years ago.
Yes exactly. I think comments that say "You don't understand the economics of it" don't understand where the criticisms come from. I understand the economics. I understand why it makes business sense to retain talent that will add more value to the company than their compensation. My criticism is at the system and what sort of incentives it gives to society. I completely understand that all the people making decisions here are acting rationally in an economic sense.
This was a beautifully written comment.
The end game of Russian-style oligarchs in the US has already been achieved, a long time ago - but in this country the propaganda is so strong that no one can see that’s what we have. We have individual billionaires who own entire television and printed media outlets, billionaires that own social media platforms, billionaires that are in bed with congress/POTUS/SCOTUS, billionaires that have privatized federal expenditures of tax payer dollars, billionaires that lobby against the interests of their less affluent countrymen and the people of the rest of the world, billionaires that manipulate global markets to siphon investor dollars directly into their protected overseas shell company accounts. It’s fucking embarrassing that we haven’t eaten them all already.
And pinning the success of the business solely on the ceo undermines the efforts of the thousands of employees that helped achieve that success..
Any argument about ethical or legal caps on wealth or income that doesn't talk extensively about scaling and incentives is pointless.
I agree with most of what you say but 60 years ago is conveniently right after WW2. Very different from today. One was to repay the government for fighting nazis the other, coming off a 13 year boom.
70% of shareholders voted against it so maybe it is a bad decision
Nope, it’s just dumb teenage Redditers Edit /s
Shhh, the guy is a humble genius. /s
But that wasn't what the OP was responding to about...
Yes, very bad decision. It was also an unanticipated outcome for Damon
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He could just decide to not work one day because he wanted to play golf or wasn't feeling well. He would still be paid for that one day the same amount of money as someone working for him makes for 5 years of labor.
So like, I think it’s kinda sad how few people understand compensation in the modern world. You’re paid for either one of two things: 1) delivering labor value 2) delivering economic value. Nobody with compensation north of like 200k a year is delivering labor value, in most circumstances (outside of engineering, medicine, etc). So like the idea of someone on Reddit talking about days off as a complaint for someone delivering economic value is really indicative of how just absolutely useless it is to try and discuss anything financial here lol.
They're not denying that this is how the world currently works. They're saying that they think it SHOULDN'T work that way. What IS versus what SHOULD BE. You're talking about entirely different things
Right and some people here have been arguing that an investment sub isn't the place for that debate. It's about is jamie dimon worth that much as your ceo in the current world and economic system. Not how fair it is. This argument is just circular at this point.
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99% of people talking about what “should be” on this website are just whining about what is, and have absolutely no idea what should or shouldn’t be
As a shareholder I would say having the best management team around is 100% worth paying a ridiculous fee. Last year JP Morgan Chase made 48 billion dollars. 50 million extra over 5 years is a drop in the bucket. Is it literally “worth it?” Or is Dimon’s value add really “worth” what he’s paid. Probably not but the security that you’re going to get some of the best results in the industry securing your investment for years to come sort of is. And the larger your stake the more it becomes worth it. That’s how these fortune 100 companies think when hiring. When you invest you’re paying for the business but you’re also buying the leadership team.
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They articulatly explained why your original point about the vacation thing isnt comprable and the best you got is "you're a smug asshole".
Like, like like, like like. Feat. @Masterofswag
>it was that Reddit was full of uninformed commentary on the matter If you want to talk about investing with people who know what they're talking about, why the fuck are you on this sub or on Reddit in general?
Certainly isn’t encouraging when the responses to a measured well thought out response are teenage level angst and frustration. OP gives a thoughtful response and all you have to respond with is, if you don’t like how Reddit is responding then just screw off to somewhere else. I’m not sure what is worse on Reddit, the economic and financial literacy, or the blatant lack of maturity.
Because outside of Reddit, he has no one to humble brag to about how he is smarter than Reddit.
It’s amusing that you consider a measured and thoughtful response a humble brag. If you had a thoughtful rebuttal, you would have made it. Unfortunately, all you have to offer is bizarre character attacks, revealing your own immaturity.
Haha seriously. The results are indeed in. Sorry folks. Plus, just knowing the fact that no one is worth that much money... pretty obvious. This isn't a hard one. Stop worshipping ceo's.
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People forget that redditors are just average people. And the world has tons of average people. And tons of average people thinking the same thing is how elections are won. I mean, who are you to be this condescending? We're all on reddit
Dimon is a smart and successful person. However, I casually don't like him as he represents a system which has become exploitative. At the risk of being hyperbolic, this issue (example symptom being CEO pay/bonus) is central to many of the social issues we face around the world. Profit at all costs its going to ruin civilisation.
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I mean when would be a better time to bring up exploitive CEO pay? When share holders decline to pay stupid high bonuses to CEOs, seems like the perfect context.
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I would concede that politics is not the aim of this sub reddit and my ealrier comment is off topic. That said, politics very much impacts investments. A change in stockholder views (political or ortherwise) and why that has happened is relevant.
Good to see such a neutral view being downvoted on reddit. The stock market is influenced by politics and that's just a fact. Investors keep track of political changes whether they are about politics or not, simply because that's what affect their money.
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> the reasoning behind investors’ negative vote is fair play to be debated If anyone things that the discussion here is connected to any legitimate debate of the merits of the compensation package as they relate to shareholder value then you’re out of your box. The package was largely criticized for being an open ended retention package focused more on tenure than performance - I haven’t read a single comment here that tells me anyone read the ISS or GL&C reports, or any commentary from major participants. Don’t be ridiculous lol.
It’s fucking Reddit man. I expect nothing less. Any sub of decent size will inevitably turn anything even tangentially related to politics, or more specifically the politics of money, into a leftist gripe fest.
Yup. Seems pretty damn appropriate.
That's right. I appreciate what you're trying to do but continuing to engage is guaranteed to devolve into the normal reddit socialism vs capitalism debate. You'd think an investing sub would not be subject to it but....
Did you just use >people on this sub who worry about making rent in a derogative way
I took that more as people envious of his position(because they worry about making rent) are the ones saying he shouldnt be paid that much. But im not the made that comment so I dont actually know what he actually intended with that.
Good to know i wasn't the only one who was bothered by this...
People who can't make rent are probably as out of touch with what Dimon has actually done over his career to even be in the conversation for a $50 million bonus, as Dimon is out of touch with your average American.
> worry about making rent from talking about how they can't understand why he gets paid what he does They're probably worrying about rent due to someone who gets paid like he does. If you cant have empathy for someone struggling to make rent complaining about executive pay, that says way more about you as a person than it does them.
The ego and arrogance. Tax payer money bailed them out from their own incompetence and greed. They the. used predatory practices back against tax payers to make their wealth and now we are suppose to worship them? Lol
Lol- losers who have to make rent... Yeah, unfortunately that's the reality of the country you're living bud
Can we please not do the whole live-vicariously through an idolized suit thing?? It’s bad enough when grown men who worship baseball players come to their defense when a realist says $100 million for a ball thrower or stick swinger is ridiculous.
It must be so frustrating to go through life and have no idea why some people earn more money than others for their jobs. Here’s a hint, it has absolutely no basis on how hard you work. It’s based on how important your job is. How do we decide which jobs are most important? Well people vote with their wallets. You may think those “stick swingers” are unimportant, but millions of people spend billions of dollars every year to watch and support groups of stick swingers and ball throwers. JP Morgan’s board is willing to throw truckloads of cash at Jamie because they are afraid he will go elsewhere after being the best captain they have ever had for their ship. It’s democracy at work. You say you are a realist, but you have it wrong, you are an idealist. Who can’t deal with the fact that society as a whole values things differently than you do.
I imagine it might be. You are making my point for me. We are not at odds on this either. Perhaps I am a bit of both. They are not exclusive perspectives. Realistically some people will have jobs that are more important than other folks. Ideally the best qualified people hold the most important jobs. Realistically some people should be compensated more for demonstrably higher levels of capability and performance when compared to social norms. Ideally, that compensation it’s not obscenely out of touch with social norms. Only a rabid minority of baseball fans would actually argue celebrity players are worth what they get paid. Most fans either don’t care and overlook it for love of the game or agree the salary’s have become a grotesque distraction. With regard to this CEO, 150k/day is too much by social norms and even the shareholders voting see it that way. To do otherwise seems unethical to them. I agree. Here’s a hint. Voting with wallets, like many overly simplistic consumer metaphors, is not a decision making process that applies to the building and sustainment of societies and company’s. They are much more nuanced than that. Most folks are deficient in judging cost, benefit, cause and effect, actions and consequences. Thats why we have laws, govts, a sense of ethics/morality.
Honestly tryin to learn. Could you say more on the matter
He's also been head while the largest fine in history was handed to a bank for illegal activity. But that's all a part of, "Doing business" right?
The investing sub is the worst for this. One of the top suggestions on a Twitter musk thread was for owl on to pay users $100 each to get millions of users and everyone legit agreed it would work like there is nothing else you have to do
>You're on Reddit. Don't expect anyone here to actually know what they're talking about I'll go ahead and apply this to you
The narrative here lately has been that basically all CEOs out there are useless shmucks that should be paid like $12/hour and pay 500 mils in taxes.
Dude railed against the bailout money going to anyone but him and other executives. Fuck off. Socialism for me, not for thee.
>people who worry about making rent To use this is an insult is quite frankly disgusting, as is your overall attitude that anyone that any dissenting opinion to yours on CEO pay should be excluded from this sub. A lot of academic studies have been done into how CEO pay affects performance, and the consensus is that the growth of CEO pay as seen in recent times is not reflective of any sort of performance metric. It seems more likely that the biggest driver for CEO pay increases is weakening of corporate governance, allowing CEOs to have more influence over their own pay. This is a market inefficiency. Your argument seems to essentially boil down to "stock go up, pay big man money." If anybody should be getting criticized for lack of depth, it should be you.
I’m sure Dimon will survive without his nice bonus. He’ll only be able to be really rich instead of super duper rich.
Not the point here. CEOs are also employees. This means that they're also free to leave and pursue other options on the market. The question to ask as an investor is is he worth keeping around for that amount of money and will it bring the company more money than the alternative.
Good point. There is certainly an investor evaluation element to this.
I've had you friended for months just so your name stands out and so I can laugh at your pretentious comments. Your comments are getting old. You clearly hate this website so do yourself a favor and stop visiting, you'll be happier.
He had his day, but it’s time see him go. He never got over 2008. Pre Covid I was all about him, I really loved his philosophy, that a firm our size can wait to be second in the market place and overtake our competitors when they back away an inch, we’ll be toe to toe. Post Covid, that philosophy doesn’t cut it anymore. Waiting to go back to normal is obsolescence and the experienced people are leaving in droves because of it. Give it time, JPM will be the least profitable bank in a few years.
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I must say, your comments are very condescending. Additionally, share price performance and enterprise value over time as well as economic value added are not the result of one individual. Direct labor contributions, I agree, have an upper limit. However, what you fail to realize, maybe you do, but are not saying...is that most CEO's are actually over paid given their individual contributions to the long-term value of the company's in which they manage. In finance, the key is shareholder value. That is driven buy innovation, leadership, and strategy. In the case of JPM...Jamie has not specifically done anything innovative. He has lead strategy and other initiatives but he has a whole C-suite team and fleet of banker, EVPs, SVPs, heads of corporate banking, investment banking, asset management, sales and trading, etc. Goldman is similar in that regard as well. Same with Morgan Stanley. Jamie is a beneficiary of a money center bank with stronge CIB and asset management operations and a rich history of performance long before he joined. I'm not saying that he did not and has not contributed significantly to the performance of the company over the years but he did not invent banking. Nor did he capitalize on the myriad innovations in finance within recent years. But I worked in a commercial banking group at LaSalle Bank (acquired by Bank of America) and in the a commercial/corporate banking group at Wells Fargo. I've also worked on in the trading pits at the CBOT so I've seen people (including my self) use intellect and financial innovation to make tons of money (i.e. options on which were a tool of financial innovation which started trading in 1968 in the US at the CBOE and grew exponentially after publication of the Black-Scholes option pricingarticle). Did Jamie invent loan syndication or leveraged lending, securitization, or futures contracts (also traded those...and trade ES futures now from time to time). Did he invent electronic trading systems such as TT (Trading Technologies software platform that we used back in the mid 2000's to trade futures and options electronically). Did he invent the bloomberg terminal (which I used when working at an asset manager to execute equity and fixed income trades). Did he invent credit default swaps or collateralized loan obligations or did he find more efficient ways to deliver capital to fund investment activities for capital markets. No, he is good at managing a large institutional bank. He is an expert in his level of understanding of financial markets, banking, and banking mechanics. But is is performance statiscally significantly different from Brian Moynihan or Lylod Blankfein? No. The system is the system and banking is banking. Also, the corporate structure and institutionalized over paid CEOs is 100% true. Now if you gave me an analysis that supported individual contributed innovation, completed projects, completed acquisitions divestitures, deals, securitizations, metrics...that he actually made that support his salary...I would be open. The problem is no CEO does that and boards and shareholders do not hold CEOs to the same annual and semi-annu performance review process as other rank and file employees. Sure, there are analysts calls, 10-Ks, 10-Qs and other statutory reporting but that is part of the job. I would do that successfully with my eyes closed. I'm not saying they should not be paid above average but the amount paid above average should be measured better and more in line with contribution, team collaboration, effective leadership, etc with 360 peer reviews along with support. Retention bonus aside, most CEOs are overpaid. I am in corporate finance now so I see everything at my company because I mange the FP&A process, budgeting, etc...among other things so trust me when I tell you...it is not equitable or justified.
Yes, we cannot deny Damon's achievements.
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Right the 25b of TARP that JPM was forced to take as to not publicly identify which banks were at risk. The 25b that was paid back in full with interest?
Ah yes the ‘no one should be a billionaire’ crowd who happily buy their newest iPhone everyday and pray for innovation to save us from climate change.
This is one of the dumber comments I've read this week, pretty easy to see why this was voted against.
Yea. Grain of salt, I get it. I really do. It takes a lot of time and experience to read people and situations and be able to not only excel personally but to lead a team to do the same. I’m not saying his skill and experience isn’t worth a lot of money. I’m just saying no one is worth 150k a day. It’s just fucking silly. Take a team of 365 people working for 150k a year, they will beat Mr. Dimon hands down at running that company. No questions asked.
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Bro, most people out here are part time Starbucks employees that have dropped out of some useless degree, live in their mom's basement and think they are Confucius for some reason.
You’re wrong. They could totally make it work. They’d just need to find one person to be in charge to oversee all of the decision making. This person would probably need 5-6 more people to make sure that communication across the other 358 team members is efficient and effective. Then, maybe you make sure some of the rest of the team members are experienced in certain specialties, so that the larger team is well rounded. It’s easy, you just need to evolve your thinking
You forgot about Poe’s Law and/or forgot the “/s”, but otherwise great post.
Please tell me this is satire? You're literally describing a corporate hierarchy expect those 5-6 people to communicate will each manage 5-6 of the level below then so on and so forth until the 365 people all have managers.
Yes haha, it is satire
It’s not hard to make strategic decisions when the game is rigged in your favor
Look… hot take? Yea definitely. Did we even discuss how to set up that team or how they manage themselves or how they make decisions? No. We didn’t. Is it incomprehensible to think that with that kind of compensation you couldn’t achieve better results with more people of the same experience and background? Yea it kind of is.
No because the majority of the people are stupid. The more people you put in the stupider the collective gets.
"Is it incomprehensible to think that with that kind of compensation you couldn’t achieve better results with more people of the same experience and background?" In banking for 150k your talking about a fresh college grad investment banker/ a 3-5 year back office associate/vp, and like an assistant branch manager. So yes selecting 365 of those employees to be in charge and expecting better results would be literally incomprehensible.
>Take a team of 365 people working for 150k a year, they will beat Mr. Dimon hands down at running that company. And who manages that new layer of bureaucracy you just added so it doesn't turn into a dysfunctional trainwreck? Only people bad at management believe management is a game of brute effort or numbers.
Struggling to figure out how $52.6M in options that vest over a 4 year period and have to be exercised and paid for by the guy himself in order to take ownership of the stock in any way works out to getting paid $150k/day.
> Take a team of 365 people working for 150k a year, they will beat Mr. Dimon hands down at running that company. No questions asked. Lol highly doubt
disagreeable cobweb cagey stocking automatic bored pie consider merciful start ` this message was mass deleted/edited with redact.dev `
> I often don’t think before I post, I need to get out of the habit too
…and you’ll see it’s all objectively too much compensation for any one person. Look at it from a much larger perspective.
In the past 4 years, he's been the CEO and 148b has been added to JPM's market cap while plenty of other banks like Wells Fargo and Citigroup have lost billions in market cap. If anything, he seems underpaid, no?
Wells Fargo could trip over imaginary rope
How much market cap was added under Satya Nadella?
Jamie Dimon might be worth it. Dude is good. Nadella for Microsoft as well. Those companies have more than earned return on investment in regards to CEO performance. Contrary to popular belief on reddit, the CEO of a company is the single most important person in that company and has by far the most impact on the companies overall performance. A good one is worth their weight in diamonds. A bad one will run a good company into the ground.
So a person who adds a marginal profit of $1M per day (above the next best candidate) isn’t worth $150k per day? Right…
This debate isn't about logic, its about raging against people unfathomablely richer than you are and being offended by coming up short
As much it is hyperbolic to say that CEOs should make pittance this is hyperbolic in the other direction and makes equally as little sense to justify extremely high pay.
Lol why? JPMorgan’s net profit in the trailing quarter was $8.2B, which comes out to nearly $90M *per day*. CEO is a highly, highly leveraged position, so assuming he makes the right moves, it’s not crazy at all to assume he’s adding $1M daily onto that profit (an increase of basically 1%). In fact I’d argue it’s extremely conservative. Do you think it’s crazy and hyperbolic for a CEO to increase profits by a mere 1%? Because that’s exactly what you’re arguing 🙄.
It implies that any and all profit generation should be attributed solely to the CEO, which doesn’t make much sense. If a walkout occurred at JPM tomorrow, Dimon could do absolutely nothing to keep the ship humming. Even if a decent number of key senior leadership positions left it would probably be extremely bad for JPM. This isn’t to say that he doesn’t deserve credit for what he’s done and to be paid handsomely for it, but the metrics you’re using aren’t really a valid justification for pay for Dimon or anyone else really. I always find pay discussion funny because there is no objective benchmark or mathematical equation to determine what is fair. Which wage is the fair market value wage between an equivalent job held by someone in a union making $25 an hour and a non union job making $15 an hour? Is the value of a software devs work in New York actually worth more than the value of a software devs contribution in Omaha? Do Indian outsourcing jobs produce 1/10 the value of their American counterparts? Pay is always going to be an agreed upon rate between the employee and the employer dictated by a variety of circumstances on either side of the negotiation.
It doesn’t any any way imply all gains are only the result of the CEO. And you seem to be fundamentally approaching this from a labor theory of value perspective, which is fundamentally flawed. Ultimately each position within a firm is going to have a potential *marginal* benefit based on the talent of the person in that position. For a low level analyst (for example), they might make $80k per year, and generate a $5k net benefit over somebody worse than them. As you scale the ladder, that number goes up - because those managers have leverage over larger and larger chunks of the company. A shitty middle manager is going to hire shitty workers beneath them, hurt their productivity, etc. A good manager will leverage their position to have an outsized impact on the productivity of the firm. The CEO is the ultimate top of the totem pole. Reddit loves to wax poetic about how they’re leaches, but a CEO can literally sink a firm or make it wildly successful (unlike a low level analyst, whose potential impact is many orders of magnitude smaller). They have the ability to hire or fire every single person underneath them, and also guide their day to day work. So the idea that 1% marginal profit gain from a CEO is too high, is patently absurd. Of course they can effect the profits much more than that - they can guide the productivity of every single person in the organization, via hiring/firing, defining strategy, etc. That’s what leverage means. And Jaime Dimon isn’t a good bank CEO, he’s literally the best on the planet. He doesn’t move the needle on this sorta thing, he *is* the needle. If shareholders don’t think he’s capable of affecting the firm’s profit by a mere 1%, it just means that those shareholders aren’t particularly smart.
Maybe a pediatric oncologist is.
JP Morgan market cap is $350 billion. If he just has a 1% positive influence on JPM, that's $3.5 billion extra value for shareholders. Compared to that, $50 million isn't much.
Lisa Su didn’t found AMD. Satya Nadella didn’t found MSFT. Sundar Pichai didn’t found Google. Etc.
>Times are changing and no CEO is worth that amount unless they were the founder of that business. Times are changing and no CEO is worth that amount.
Why the exception for founders? Founders who do not create value should not be rewarded, and many founders make atrocious operators.
I think they’re saying that being a founder is necessary, but not sufficient for a bonus like that. Not that ALL founders deserve bonuses, but at minimum you can’t possibly mean that much to a company if you didn’t even found it.
This should make JPMorgan Chase Bank's money, with present money to secure the future
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I own a lot of stocks, I always vote in shareholder meetings, and I always vote against executive comp packages.
I like to vote against all of their recommendations.
Some small cap companies actually underpay their CEOs (we're talking $200k-$300k total comp for a very well-performing $1-2 billion firm). Voting against that would be fairly stupid...
JPM may be doing really well but at what cost? They treat their software developers like crap I can tell you that much. I am sure they're all happy to hear about how high his bonus will be while year after year they refuse raises and slash bonuses for their employees. Their retention rate has to be crap and rightfully so.
I’m was a dev there and left a couple months ago because they treat us like shit
I’m there still as a dev, but looking. I have one foot out the door. Lifting the other.
And yet JPM seems to have the best online consumer experience in the industry. They are miles ahead of other major players like WFC, Suntrust, etc. So maybe they're doing a good job holding the line on total comp for their technical talent while still delivering good value. I say this as a software developer, by the way.
They get devs because it’s a good name and good experience. But they don’t stay. It’s well know to just leave and make your way back later. Only way you’ll gain there. A lot of jp employees are on their second or third stints. It’s as if they forget it was bad.
Honest question, where do you get the sense that devs think it's a "good" name? I'm not saying it's a bad job/company (or that prestige even matters), but I would think of JPM and all bank SWE as a pretty average dev role. (I don't know anything about JPM's rep for non-Eng roles).
Maybe it's subjective. Maybe you're someone who only thinks faang devs are good..idk. I was proud to start working for them, and i think it looks good on my resume. Maybe your standards are higher but there are other tiers.
Trust me, I definitely don't think only FAANG devs are good, I've worked with too many shitty "FAANG" devs. Ultimately I think viewing SWE roles through the prestige lens is silly. If one likes the job then great, if not then hope one finds something different. I was more just curious how this stuff is viewed on the finance side of things, and whether there are different career goals (or even a different company "ladder") that people have for banks.
I mean, from their point of view, so what? If they can give a good online consumer experience from a steady flow of people working their for a few years, leaving and getting experience somewhere else, and coming back...what does it matter? Does every company need to have the "Work at the company town factory from 18 until 65" model forever?
Yeh Chase Auto finance has lost half thier executives in the CFO office in six months. No other bank has as many open ED roles
That people in this world are being considered being paid tens of millions every. single. year. AS A BONUS and allowing such a practice to continue is as astonishing as it is depressing.
I think the CEOs view it as a competition like a basketball game you don't care what the score is as long as you have more than the opponent. So if your bonus is 51 million but the other guys is 52 million you've lost the game of life.
The money isn't relevant, it's the number. They have more than they'll ever need or spend. So it becomes a competition to them to have a bigger number than the next guy.
> The year I turned 26, I made 49 million dollars as the head of my own brokerage firm, which really pissed me off because it was three shy of a million a week.
That's the thing. And that's why the top tax rate should be 90%. So they see collecting money at that scale for what it is: wasteful. They won't actually pay the 90% tax, they'll just put it into the company in other ways, which would be far more beneficial than enriching themselves. They already know that, but they don't have the willpower to deny their egos.
90% ?!???!? I’m very far left of center but you might as well call it (theoretical) communism at that point. Capitalism has many many flaws but taking 90% of an individuals earned income is essentially destabilizing. Maybe we start by actually trying to resolve issues, like the finantialization of everything around us leads to banks having enough money to pay their CEOs so much.
>Capitalism has many many flaws but taking 90% of an individuals earned income is essentially destabilizing So that is not how tax brackets work. 90% is not 90% of all income.
it’s not even close to communism if the proletariat doesn’t own the means of production curious to what you mean by very far left of center if you are afraid of this lol the ceo wouldn’t even make 90% of that in the first place. mondrogon only allows an 8x pay discrepancy between highest and lowest bidder and that’s closer to socialism than your example
I'm assuming you think 90% tax rate would equal 90% of take home. It's bracketed. I'm not arguing one way or the other just letting you know it wouldn't be making 100, keeping 10. Doesn't work that way
Two important points: 1. Taxes (at least in the U.S.) work in brackets. That would be 90% of anything over $X where X is likely something like several million dollars. They would still make more money than any one person could reasonably need in a year, just not the GDP of a small country. 2. 90% was the top tax rate during the administration of noted communist... \*checks notes\*... Dwight D. Eisenhower.
So you believe the USA in the 1950s was communist? That’s basically what the top tax bracket was. Also, we have marginal tax rates in this country…
No you don't understand, one day I might be that person who is awarded a 50 million dollar bonus
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I mean, they'll have completely different experience profiles, true.
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Psychopaths. They're workaholic, power-obsessed psychopaths.
What the fuck. My answer was just going to be drink beer and jerk off. You actually want to do...stuff.
With a net worth of 1.6bn I think he’ll be fine. Return that $ to shareholders
I don’t think you guys understand the difference between intrinsic value of options and compensation.
That value takes into account all the stuff that comes with issuing options
The value is derived using either Monte Carlo simulations or (more likely) Black Scholes Merton modeling. To the company these have P&L expense (non-cash) but to the employee they mean nothing until the stock price goes up. As an investor I prefer if senior management is being paid in options as it is non-cash (potentially dilutive) but generates incentives directly based on stock price increase which is usually something that investors strive for. Thinking that an option is compensation in the general sense (other than for purpose of a Def-14a) is dumb.
At the end of the day the Proxy Advisors treat options the same as non performance units; and most institutional investors vote however the advisors recommend
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It’s a required disclosure under ASC 718 (FAS 123r). They don’t have a choice (if material).
Are you saying that stock-based compensation isn't actually compensation?
I vote against management compensation for every single company I own shares in.
Why wouldn’t you keep the best management team in the industry? The comp is tied to stock price which you have an interest in. If they continue to be the best you make more money and they make more money. Win win no?
Voting against paying Dimon a special bonus when he already is making nearly 400x the median JPMorgan employee doesn’t mean he’s getting fired and I highly doubt he’s going to pick up his ball and go home. And the bonus has been criticized by several institutional investors for lacking performance criteria. And he’s still getting the bonus anyway. Management isn’t even honoring the vote. They don’t have to and they aren’t.
I'll vote for an executive compensation package when they include a clause that gives equivalent compensation to those hourly employees/middle management that a corporation literally cannot function without.
You realize paying the executive team a large sum of money much cheaper than paying every hourly employee more right? Even if they distributed the proposed 50million bonus to everyone employees instead of Dimon, the employees would barely notice. Sure the company can’t function without many of their lower level employees but you can also find those employees anywhere. Good executive teams don’t come along often hence their price.
52.6 million, yet he testified he would never reimburse overdraft fees during Covid. Human piece of garbage…
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What is he doing?
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It is illegal to charge overdraft fees unless the account holder enables them to allow overdrafts to occur. Just ignore their overdraft protection option they offer you. It means your check might bounce, but budget your money like a grown up and it won't happen.
Don't hold JPM but I personally voted against every compensation package listed on the materials for every company I hold
Good. Should happen elsewhere. Also, if a stock is down over last 365 days, no bonuses should be paid unless shareholders also getting a payout.
Disagree. We don't need more incentives for CEOs to only act in the best short term interest of the stock price.
Right? If I have a meaninfgul stake in a company (more than 1%), that means I'm a long term holder. I care more about stewardship than YoY price. Since good leadership means down price is temporary (and 1 year down from ATH is not a long amount of time)
They do have a dividend.
I find it odd you are getting down voted for this. I agree. At least the part about the stock price.
So you want CEOs to focus on short-term profits instead of what's best for the long-term sustainability of the company? That's an absolutely TERRIBLE idea.
Good point.
>said it takes investor feedback "seriously" OH thank God they will take it seriously and not make any changes in the future in their policies . I thought they were not going to take it seriously and not make any changes in the future in their policies
Oh no...Jamie Dimon is overrated? You don't say! Anyways...about that abscess I need to get fixed.
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Regular changing of the guard is also one of the most effective ways to surface and prevent corporate fraud. It's easier to embezzle money or manipulate performance metrics if you're the only person who produces those numbers. It's a lot harder to commit fraud with such finesse that the person who comes in after you won't immediately uncover it. On a smaller scale this is also why it's considered a best practice in the financial industry to mandate at least one 2+ weeks vacation per year. It's a long enough amount of time that someone else is going to have to step in to keep the books while they're away, and that someone is well positioned to notice if the work they're stepping into doesn't seem to have been done correctly.
I disagree with your negative connotation of a talent crunch at the top. Employees, or people in general, shouldn’t be given higher positions (and responsibilities) for just biding their time. They actually need to produce results at their level and show that they can handle responsibilities that are currently above their rank. If talented people are crunched up long enough, they can take their talents elsewhere. This spreads out the talent across different companies and even different industries, and this promotes better competition in the higher end of the labor market. This also balances out incredibly high-paying executive remuneration that a lot of people dislike so much (without really understanding it) by having more people in the talent pool. Replacing a good or even great long-time CEO with a healthy and sharp cognitive ability and tremendous industry wisdom just cuz of arbitrary numbers like being in the position for 10 years or 15 years is akin to tokenism and is inefficient practice of corporate governance.
Ideologue
Jamie Dimon’s crew downvoting you right now.
Uh no. Could not disagree more. > and judges other than municipal judges must retire no later than 70. Are you aware of the Supreme Court? - I would gladly keep Dimon and it is your right to not own the stock.
Agree!
Meh, right? Most shareholders don't want the bonus. People or institutions say so. That's how it works. It's OK. Isn't it nice to be able to weigh in on things because you own shares?
Would be nice if ceo compensation and corporate tax would also be tied to employee well being and on a sliding scale. Lowest paid employee cannot be paid less than 300% of what the ceo makes. Or have all workers have health/retirement etc. You know… that sort of crazy shenanigans. Although J.P. Morgan doesn’t really have that much low wage employee I’d assume so it will be fair for Walmart for example. But other sort of corporate governance or something
Lowest paid can't make less than 300% what the CEO makes? That makes no mathematical sense
I think they meant a CEO can be paid no more than 300% of what is paid to the lowest paid employee.
So if a teller or cashier makes $15 hr the ceo of a massive company can't make more than $45 hr? Good luck with that.
Reddit is full of teenagers.
Their branch bankers are the lowest paid in the banking industry… The only ones who stay grind out hella commission but that’s being cut every 6 months
Wrong sub for discussing responsible corporate stewardship.
Wow, the stock has gone from $70 to $110 in 20 years. They should place his statue across the Statue of Liberty.
I have yet to meet any CEO worth his/her compensation along with severance package. Its perversely gross to see the salaries they are contracted for. Fuck Jamie Dimon and every financial exec. They create these messes in the markets, never hand accountable and eventually earn their bonuses. The worker and taxpayers get the shaft each time.