Last year, the CEO of one of America's biggest banks apologized for a $2 billion mistake that's become known as "the London whale." Now, Jaime Dimon, chairman and CEO of JPMorgan Chase & Co., is feeling the consequences of his bank's massive trading loss. This week, the bank announced that Dimon's annual bonus will be drastically reduced in 2012.
A report issued by the institution's board of directors examines what paved the way for reckless trading habits and calls out Dimon's lack of oversight.
"As chief executive officer, Mr. Dimon could appropriately rely on senior managers who directly reported to him to escalate significant issues and concerns," the authors of the report wrote. "However, he could have better tested his reliance on what he was told."
"This report demonstrates that more should have been done regarding the risks, risk controls and personnel associated with (the chief investment office's) activities, and Mr. Dimon bears some responsibility for that," the report stated.
The reduction in pay doesn't mean Dimon will be struggling. He's still taking home a cool $11.5 million for his performance in 2012. Not a bad year, I'd say.
Bonuses in the banking industry have been a hot topic for quite a while. After the bank bailouts in 2008, everyday consumers heard reports of banks continuing to hand out massive compensation packages, even after receiving taxpayer funds.
This latest round of news might just bring the issue back up for debate. Let's face it, if your company can lose billions of dollars and you still take home $11.5 million, I'm guessing that everyday account holders will have a few questions.
What do you think? Does Dimon still deserve the bonus he's getting?