#J.PMorgan : ” Jamie Dimon Reprieve and Given `$1.5 Million’ and `Treated ‘ with `Additional’ $18.5 Million in Restrictive Stock”

#AceFinanceNews says `JPMorgan’ gives `CEO Jamie Dimon‘ a raise despite shelling out $20 bln in fines

Published time: January 24, 2014 21:02 

Edited time: January 25, 2014 02:21
Jamie Dimon (Reuters / Larry Downing)Jamie Dimon (Reuters / Larry Downing)
  It was only a year ago that JPMorgan CEO Jamie Dimon was getting his pay docked by millions of dollars. Now, though, the company is giving their chief executive a raise.

Despite the fact that JPMorgan was hit with $20 billion worth of fines during 2013, Dimon will receive $1.5 million for the year. That base salary is virtually unchanged from the year before, but the company will also pay him an additional $18.5 million in restricted stock, according to a public filing with the Securities and Exchange Commission.

According to CNBC, some board members were divided over the possibility of raising Dimon’s compensation levels. Those opposed cited the record levels of fines the company was ordered to pay out as a reason to keep his salary where it was, while others believed Dimon deserved a raise due to the difficult landscape he was operating in.

Just last year, Dimon had his pay slashed from $23 million to $11.5 million following revelations in the ‘London Whale’ scandal that showed the company’s traders manipulated bank records in order to cover up $6.2 billion in losses. As a result, JPMorgan agreed to pay nearly $1 billion in fines to settle the case against it.

Over the course of 2013, JPMorgan also settled cases involving its role in selling bad loans that precipitated the 2008 financial crisis, including a $13 billion agreement with the Department of Justice announced in November.

As RT noted last year, this fine was more than triple the $4 billion payout that BP oil company paid for its role in the Gulf Coast oil spill. JPMorgan was tagged for overhauling the quality of the mortgage bonds it sold to investors such as Fannie Mae and Freddie Mac between 2005 and 2007.

The terms of the settlement dictate that the bank will pay more than $6 billion to reimburse investors, put $4 billion towards a mortgage relief program for affected homeowners, and $2 billion to settle civil cases unfolding in five states.

In spite of all these penalties – the company was also included in the group of banks fined 1.7 billion euros for manipulating lending rates – JPMorgan’s stock price has risen about 22 percent over the last year. Following a quarterly loss for the first time in 10 years during the third quarter of 2013, the company recently reported a profit of $5.28 billion in the fourth quarter.

 

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Who will Receive What, When JP Morgan’s Fine of $13 Billion is Finally Settled

Dismissed U.S. attorneys summary

Dismissed U.S. attorneys summary (Photo credit: Wikipedia)

 

Because the deal was still in the works, the details of JP Morgan‘s record $13 billion fine to settle civil violations related to mortgage-backed securities it sold before the housing crisis have been murky.

 

But now the WSJ has the break down.

 

For the record, the Justice Department has decided not to make JP Morgan pay punitive damages for mortgages sold by Bear Stearns and Washington Mutual, since JPM essentially helped the government out by buying the banks as they were collapsing.

 

So that’s nice, but the figure will still stay at $13 billion.

 

Now for the numbers:

 

  • $4 billion will go to Fannie Mae and Freddie Mac
  • $4 billion will go to underwater homeowners
  • $3 billion will go to institutional investors that lost money on bad mortgage-backed securities
  • and $2 billion will serve as a penalty for JPM’s conduct in the lead up to the financial crisis

 

According to the WSJ, all the drama surrounding this deal started on September 24th, the day the DOJ set a deadline to file a civil suit against the bank over MBS. The day before, JPM called and offered $3 billion, which the DOJ refused.

 

The JPM called back and said they’d negotiate a higher figure if they didn’t have to go to Court.

 

That brings us to now. After the government shut down ended, lawyers at the DOJ told JP Morgan they had six days to cobble an agreement together. What that means is that we could have a finalized agreement by this week.

 

For the full story, head to the WSJ>

 

 

 

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