Bank CEO thinks journalist salaries are 'outrageous'

That was the wrong way for Dimon to go about this, but his dig at newspaper reporters was targeted and deliberate.

For months, during the "Occupy" movement earlier this year, and for the last few years really, his perception was that newspapers were portraying banks as immoral plutocrats (we can argue about whether that is fair assessment or not, but that is what he gets a heaping spoonful of every morning).

Dimon (and Lloyd Blankfein and the rest of them) have largely stayed silent. It was a PR war they didn't want to get mixed up in, because they didn't believe they would get fair play from the media if they tried to "sell their side." Bank bashing has become sport in this country, and newspapers do engage in it.

This was his attempt at a little payback.

I think he should just stay silent, because he is in a no win situation. When he stays quiet, his industry gets pilloried as greedy, overpaid and immoral, and newspapers largely play that story. Now he takes a little shot back at them -- knowing Dimon, I'd guess he is probably right in his financial assessment -- and people jump on him for being out of touch with how little journalists earn and they are all outraged by a guy earning millions saying it.

He's really not out of touch. He knew exactly what he was saying. He just wanted get a dig in at the people he perceives as unfairly taking shots at him all the time. And he did it with a line about how pay levels in his industry more correspond with profitability.

To me, this is a game he can't win, so why do that?

 

Generally pretty true.

But in the case of Jamie Dimon. ... The usual line against is that in 2008, "the banks were bailed out."

What a lot of people don't realize is that JP Morgan didn't need any bailout, and actually would have probably most benefited by several of its competitors going under (Citigroup, Merrill Lynch, etc.), which is what should have happened.

Except, then Treasury Secretary Hank Paulson, who was acting with dictatorial authority, called the heads of all of the largest banks to a meeting at the Federal Reserve and ordered them to take the government TARP money, whether they needed it or wanted it.

Paulson's reasoning was that if a few of the banks got government support, but others didn't, it would signal to everyone which banks were in trouble and put even more pressure on the weak banks, which would bring about a collapse. So Dimon, pretty much under threat from the Treasury Department, the Federal Reserve and the FDIC, which were all in the room, was ordered to take TARP money and sit quietly while several of his competitors--which he surely would have liked see go bankrupt--were saved. JP Morgan quietly paid the money back first chance it was allowed to.

Not that that makes Jamie Dimon a great guy. But as far as CEOs of investment banks go, he is a straight shooter when it comes to his business. Warren Buffett has said many times that Dimon writes the most honest annual report letter in the country; Buffett also has intimated that JP Morgan is the best run bank in the country, even though Berkshire Hathaway has its eggs in the Bank of America basket. Buffett let out this week that he personally owns shares of JP Morgan.

None of that has much to do with Dimon's comments. But I do believe what I posted earlier. He was trying to take a shot at newspapers, which I am sure he believes haven't treated his company and industry fairly.

 

jlee, You have to put yourself in Jamie Dimon's shoes, to understand this. For the last few years, the salaries of his people has become a matter of national debate -- and a matter of public policy and regulation. Since 2008, they have dealt with a headache from regulators worldwide over their compensation, and he has watched things like the Occupy movement build around an agenda that has demonized his industry as the cause of everyone else's problems.

He doesn't understand why his people's compensation is anyone else's business. A lot of the focus on bank employee salaries has been due to a type of populism that has demonized his industry as a greedy, evil, and "unfairly" overpaid. And he believes that demonization has largely been played out in newspapers.

You giving him "the benefit of the doubt," misses the point. There is nothing out of touch about Jamie Dimon. His point really had nothing to do with the relative profit margins of banks versus newspapers. It had everything to do with him giving a speech, knowing the room would be filled with reporters whom he believes have taken a lot of unfair shots at his industry, and him thinking the time was right to fire a shot back at them.

What he was saying was, "What we get compensated should not be anyone else's business. But since you keep making it a matter of national debate, I am going to turn the microscope on you and see how you like it."

The problem with him doing that, of course, is that he should know he can't win that game. When he stays silent, bankers largely get portrayed as greedy, overpaid plutocrats trying to screw everyone else. When he fires back in the way way he did, it's a guy who earns millions "being out of touch," and taking a shot at a bunch of poor, lowly-paid reporters.