Dimon's $23 Million Payday isn't the Problem
By Ingo Walter, Seymour Milstein Professor of Finance, Corporate Governance and Ethics, and Jennifer Carpenter, Associate Professor of Finance
Here we go again. The perennial question of: "Would you rather own shares in a major financial conglomerate or manage one?" comes up as JPMorgan Chase loses more than $2 billion in trading bets.
The answer seems clear. If you're an executive who manages the money, you're likely to get a large paycheck and bonus even if you're responsible for the loss, directly or indirectly. Jamie Dimon is still getting his $23 million.
Shares of the major banks continue to trade well below book value and generate miserable performance metrics -- and have over the years been very poor investments -- while senior executives and key employees continue to walk away with vastly outsize earnings, even when they oversee massive losses.
Read full article as published on CNN.com