JPMorgan Investment Bank Chief Widens Pay Lead on Rival
Jes Staley, chief executive officer of JPMorgan Chase & Co. (JPM)’s investment bank, beat his Bank of America Corp. (BAC) counterpart in compensation after boosting earnings during last year’s market slump.
Staley’s $16 million award for 2011 almost held steady from the $17 million he made the previous year as profit at the firm’s investment bank climbed 2.3 percent to $6.8 billion. Bank of America co-chief operating officer Thomas K. Montag’s pay dropped 25 percent to $12 million after profit at the lender’s investment bank plunged by more than half to $2.97 billion.
The 55-year-old executives, who received almost the same amount for 2010, saw their pay diverge as the firms navigated turmoil created by the European debt crisis. While clients gravitated toward JPMorgan because it was considered a “safe harbor,” Bank of America executives traveled the world to reassure customers after the firm’s credit grades were cut in September, the leaders have said.
“Jes probably deserved to make more money, though paying him more would send the wrong signal politically,” said Gustavo Dolfino, a former UBS AG banker and now president of Whiterock Group LLC, a New York-based executive search firm. “It was a different ballgame at Bank of America. Montag is a decent guy, but he is under pressure.”
Colm Kelleher and Paul J. Taubman, co-heads of New York- based Morgan Stanley’s investment banking and trading division, were each paid $9.25 million for 2011, the bank said today in a regulatory filing. Citigroup Inc. doesn’t disclose pay for James “Jamie” Forese, head of the New York-based firm’s securities and banking division.
Staley is the second-highest paid executive among the five whose awards are disclosed by JPMorgan, after the $23 million granted to CEO Jamie Dimon, the New York-based company said yesterday in a filing. The firm’s total net income climbed 9.2 percent to a record $19 billion last year.
JPMorgan said that Staley increased the company’s reach overseas, cut risky assets by more than $80 billion and hit the firm’s target for a 17 percent return on equity. Staley has led the investment bank since 2009 after running its asset- management unit.
Montag’s $12 million still made him the highest-paid of the top six executives disclosed by Charlotte, North Carolina-based Bank of America, according to a filing last month. His package eclipsed the $7 million compensation of his 52-year-old boss, CEO Brian T. Moynihan.
Bank of America’s compensation board said in the filing that apart from Moynihan, top managers’ performance “met or exceeded” expectations. While Bank of America rebounded to a $1.4 billion profit in 2011 from a $2.2 billion loss a year earlier, the firm’s shares plunged 58 percent last year amid concerns it may have to raise capital.
In September, Moynihan promoted Montag, a former head of trading at Goldman Sachs Group Inc., to co-chief operating officer from head of the firm’s global banking and markets division. That added oversight of commercial banking, where 2011 profit increased 37 percent to $4.4 billion.
Jessica Oppenheim, a Bank of America spokeswoman, and Jennifer Zuccarelli of JPMorgan declined to comment on the executives’ pay.
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