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Saturday, May 19, 2012

"However Unfortunate This Situation Is..."

I heard Chase CEO Jamie Dimon saying on the radio, in reference to the two-billion-dollar-trading loss, "this company will do what it always does..."

I think he meant, "Pay me a ginormous bonus."

1 comment:

  1. To be fair, the board and employees of JP Morgan may be in favour of paying Jamie Dimon a large bonus.

    Why?

    Some months ago, on the rumours that Jamie Dimon may step down, the cost of capital for the entire JP Morgan climbed up an entire one-and-a-half percent point. This implies that debt service for JP Morgan would be several billion dollars costlier if Dimon leaves.

    It may not even be because Dimon personally outperforms all other CEOs of his sector, but because the shareholders, creditors,.etc feel very confident when they hear him speak. Superficial, maybe, but strong implications in terms of money.

    I mean, Professor Callahan, if losing some guy means paying billions more in interest or dividend to satisfy financiers of the company, won't it be reasonable to pay that man in tens of millions just to retain him?

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