Banks across the developed world are under-capitalized, profits are falling, and share prices are tanking. However, the salaries of senior bankers are rising at around 12 percent a year. At least, that is what the FT told me today.
While I know that those unmerited banking salaries drives everyone mad, I can't help but admire Jamie Dimon - head of JP Morgan. The government has already been very helpful to Jamie. It handed him Bear Stearns for literally nothing. The Fed has also kept interest rates at almost zero, increasing interest rate spreads, and effectively offering the Bank a subsidy. What did Dimon and JP Morgan do with that massive state support? The bank loses $2 billion on a utterly mismanaged and incompetent set of trades.
Rather than reward this lamentable failure with dismissal or a reduced bonus, Dimon's salary increased by 11 percent. He pulled a $23.1 million. What a superstar!
There is no point arguing that taxes for people like Dimon should be increased. Guys like Dimon always get away with it. He encapsulates the spirit of our age. There is no accountability. Merit is not rewarded. Jamie is the man who sits on top of the stinking pile. That gives him the right to an 11 percent increase on a multi-million dollar salary.
We can't change it. We have to suck up and shut up.