c.2013 New York Times News Service
To Wall Street, Jamie Dimon looks like the Teflon CEO.
Despite mounting legal problems at JPMorgan Chase, including a new, $13 billion settlement to end federal investigations into questionable mortgage practices, Dimon appears solidly ensconced atop the nation’s largest bank. On Sunday, several JPMorgan executives said — as they have for months — that the bank’s board remains firmly behind Dimon, who is both chairman and chief executive.
“The board has not flinched in their support for him,” said a person close to JPMorgan. Dimon’s role in negotiating the new settlement, costly as it is, has only cemented the board’s support, the executives said.
To many ordinary Americans, such confidence might seem bewildering. After all, more than a half dozen Wall Street chiefs were ousted by the financial crisis.
The difference is that JPMorgan’s legal travails have not truly threatened the bank financially. While other CEOs stumbled during the crisis, Dimon never did, emerging more powerful, as his bank went on to report record profits. So far this year, even as its legal troubles have worsened, the bank’s share price has gained roughly 23 percent.
Indeed, by the logic of Wall Street, putting the bank’s legal problems aside is seen as a win for Dimon, even though those problems arose on his watch. The share price rose recently on news that JPMorgan would set aside $23 billion for its legal headaches.
At the board level, , Dimon continues to enjoy almost universal support, executives said. While directors are concerned about apparent breakdowns in compliance and controls that led to the multibillion-dollar “London whale” trading fiasco, for now they have not pinned blame on Dimon.
More compelling, these people say, is Dimon’s record for delivering where it counts: at the bottom line. This month, the bank reported its first quarterly loss ever under Dimon. Other than that misstep, it has thrived under his stewardship, producing three years of consecutive quarterly profits.
Among board members, people close to the bank said, there are a swirl of questions about why a bank with JPMorgan’s sophistication and scale would have such flawed risk and compliance controls. According to these people, the bank is now planning to spend roughly $4 billion and assign an extra 5,000 employees to help repair its risk and compliance operations.