JPMorgan Cuts Stock Payouts 15% for Top Managers as Value of Shares Slips

JPMorgan Chase & Co., the biggest and most profitable U.S. bank, cut the stock awarded to Chief Executive Officer Jamie Dimon’s operating committee 15 percent as the value of the firm’s shares fell.

Dimon’s top 13 executives collected $60.9 million in restricted shares plus stock options for their performance in 2011, according to regulatory filings. That compares with $71.4 million of stock granted to 14 people who served on the committee in 2010.

The restricted stock averaged $4.7 million per executive as of the Jan. 18 award date, compared with $5.1 million a year earlier when New York-based JPMorgan’s shares were higher.

The reductions show JPMorgan’s top managers aren’t immune from pay cuts being felt across Wall Street, said Frank Glassner, chief executive officer of Veritas Executive Compensation Consultants in San Francisco.

Morgan Stanley is cutting pay for senior investment bankers and traders an average of 20 percent to 30 percent, people with knowledge of the decision said last week. Goldman Sachs Group Inc. reduced its compensation and benefits expense 21 percent to $12.2 billion in 2011 as revenue slid 26 percent.

JPMorgan fell 22 percent in 2011, outperforming the 25 percent decline in the KBW Bank Index. Goldman Sachs and Morgan Stanley, both based in New York, dropped more than 40 percent.

Dimon, whose 2011 pay held steady at about $23 million, shrank the size of his operating committee by one as Jay Mandelbaum and Heidi Miller stepped down to pursue other interests. Charlie Scharf, the former retail division CEO, was removed in June when his duties were reassigned and he was transferred to the private-equity unit.

Petno, Hogan

Doug Petno, who now runs commercial banking, and John Hogan, Dimon’s new chief risk officer, joined the committee when they were promoted.

JPMorgan’s board increased restricted shares awarded to the committee to 1.71 million from 1.63 million in 2010 and boosted options to 2.05 million from 1.62 million, filings show.

Restricted shares encourage executives to stay at a firm while minimizing the chances of their compensation being wiped out, Glassner said. Options, which let executives buy shares at pre-set prices, are riskier because they can lose all value if the stock falls.

The following table shows stock awards for Dimon’s current operating committee and the value of their restricted stock based on the average price on the dates the grants were made.

Executive           Restricted     Options   Restricted Stock
                    Stock                    Value

James Staley        223,284        224,972   $7,951,143
Mary Erdoes         198,006        224,972   $7,050,994
Ina Drew            199,006        168,729   $7,050,994
Frank Bisignano     139,026        281,215   $4,950,716
Stephen Cutler      130,600        112,486   $4,650,666
Michael Cavanagh    122,174        224,972   $4,350,616
Douglas Braunstein  122,174        168,729   $4,350,616
Samuel Todd Maclin  122,174        112,486   $4,350,616
Gordon Smith        113,749        224,972   $4,050,602
Barry Zubrow        113,749        112,486   $4,050,602
John Hogan           95,212         39,371   $3,390,499
Doug Petno           85,943         73,116   $3,060,430
John Donnelly        45,640         84,365   $1,625,240

To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

Enlarge image

JPMorgan Chase & Co. CEO Jamie Dimon

Scott Eells/Bloomberg

JPMorgan Chase & Co. chief executive officer Jamie Dimon.

JPMorgan Chase & Co. chief executive officer Jamie Dimon. Photographer: Scott Eells/Bloomberg

3:49

Jan. 13 (Bloomberg) -- Thomas Brown, chief executive officer at Second Curve Capital LLC and a Bloomberg contributing editor, talks about JPMorgan Chase & Co.'s fourth-quarter profit and the outlook for Bank of America Corp. JPMorgan's net income dropped to $3.73 billion, or 90 cents a share, from $4.83 billion, or $1.12, in the same period a year earlier. Brown speaks with Betty Liu and Dominic Chu on Bloomberg Television's "In the Loop." (Source: Bloomberg)

6:32

Jan. 19 (Bloomberg) -- Michael Vogelzang, chief investment officer at Boston Advisors LLC, talks about his investment strategy. He spoke yesterday with Lisa Murphy, Trish Regan and Adam Johnson on Bloomberg Television's "Street Smart." (Source: Bloomberg)

4:47

Jan. 17 (Bloomberg) -- Michael Holland, chairman of Holland & Co., talks about the outlook for the U.S. banking industry and global stocks. Holland speaks in Hong Kong with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)