J.P. Morgan Chase and Co.'s board unanimously voted to raise
the pay of C.E.O. James Dimon by 74%.
Dimon will receive a salary of $20 million for 2013. Dimon's raise comes after his company
paid more than $20 billion in legal payouts for scandals ranging from fraud to
malfeasance. In 2013,the Dimon led
Chase admitted to criminal culpability in a number of instances. This, according to the board of
directors, is a resume which warrants a huge reward.
The list of ways in which J.P. Morgan Chase lied, cheated, finagled and
acted like a criminal enterprise is extraordinary in length. The company paid fines for cheating or
lying to investors about the quality of sub-prime mortgages it sold. The case of the "London
Whale" had Chase ponying up fines for ignoring flagrant abuses of trading
rules and taking illegal risks with bank money. Chase was involved in the LIBOR scandal (London interbank
offering rate) affecting over $3 trillion in transactions worldwide. Chase was even fined for aiding and
abetting Bernie Madoff to pull off his Ponzi scheme. It goes without saying, even as Mr. Dimon reaped his
rewards, no one, not a single person, at J.P. Morgan Chase has ever been
indicted, let alone tried and convicted of any criminal wrong doing.
We are told one of the central tenets for why taxpayers spend $8-10
billion a year on a federal prison system is for its deterrence value. Prison, or at least the threat of
prison, keeps people in line...keeps them from committing crimes...gives them
second thoughts about the wisdom of their actions. It turns out this is a lie...falsehood...prevarication
foisted on us by those who get economic benefits from the prison/industrial
complex. Prison is meant to deter
"us" but not "them".
Mr. Dimon, and his ilk, are some of "them". He presided over a criminal enterprise
with its oily hands in every financial con and flimflam possible and he has
been "deterred" by a 74% raise.
Perhaps a better way to think of this is the $20 billion paid out in
fines and penalties is just a cost of doing successful business in this
country. When the mob runs an
operation, they factor in all the bribes and kickbacks they have to pay to
judges, cops, lawyers, and politicians and subtract those costs when figuring
out their profit. Dimon has been
given millions in a raise because the stock price for his company increased by
33% in 2013. In other words, they
ignored the $20 billion payout as simply part of doing business...they rewarded
him for not having to pay out more...he got a raise because as the company was
cheating and stealing from average Americans, stockholders were doing very well
thank you.
No lesser a godlike figure in business than Warren Buffett, the oracle
of Omaha, sings Dimon's praises.
"If I owned J.P. Morgan, Chase, he would be running it." Buffett says he would hire Dimon to run
Berkshire Hathaway in a minute if he could. Adding insult to injury, the board praised Dimon for how
well he handled all the "regulatory" problems the company faced in
2013. This won for the board the
annual Euphemism Award given by the Bonanno/Gambino foundation for American
enterprise in New York.
Proving he is a hands-on manager who revels in the small details which
separate great companies from also-rans, when asked by the U.S. Attorney why
certain people who were involved in failure in oversight and management were
still with the company, Dimon says the company only fires people for
incompetence which wasn't the case in these instances. They still work for Chase because they
weren't incompetent. They did
exactly what they were told to do by Mr. Dimon.
Dimon's raise puts the lie to the Obama Justice Department's claim that
the fines were enough to change this culture of criminality and moral hazard
and prevent future abuses. It
exposes to sunlight the dirty little secret that the really rich and powerful
have a different set of rules to live by.
The raise sends a message to all Chase employees about what they need to
do to get ahead. (what do you
think Dimon would have done to an employee who blew the whistle on company
crimes?)
Dimon, in 2013, is responsible for a company, by no means the only one
on Wall Street, which admitted to behavior which would make a
"made-man" blush, and he is rewarded with millions of dollars and the
thanks of a grateful board and satisfied stock holders. Now that is a bedtime story every
little American should hear and warm the cockles of their tiny Christian hearts.
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