Last Man Standing:
The Ascent of Jamie Dimon and JPMorgan Chase
By Duff McDonald
Simon & Schuster; 340pp.; $28 Few figures of today's financial world are more respected than Jamie Dimon, CEO of JPMorgan Chase (JPM). For a banker to emerge from the financial meltdown with mere flesh wounds might be accomplishment enough. But for Dimon—whose rise, fall, and rise again has been one of the most compelling stories on Wall Street for decades—the crisis proved he is much more than a survivor. Dimon has earned the ear of the U.S. President, the gratitude of the Treasury Dept. for helping the U.S. escape financial ruin, and the respect of legendary investor Warren Buffett.
Dimon's colorful career, from ousted Citigroup (C) heir apparent to top dog of U.S. banking, is deftly chronicled in Last Man Standing: The Ascent of Jamie Dimon and JPMorgan Chase by Duff McDonald, a contributing editor at New York magazine. The book is one of the more intimate portraits of the 53-year-old banker, supported by interviews with Dimon, his family, and trusted lieutenants.
One potential irritation: McDonald recounts events in chronological order, meaning readers must wade through several chapters of ancient history before they get to the drama suggested by the book's title. This is a bit frustrating since plenty of controversy still swirls around Dimon's actions of the past 18 months: Did his financial moves force Lehman Brothers into bankruptcy? Did his angling to take over Bear Stearns represent ruthless opportunism? No on both counts, McDonald concludes. He ultimately describes back-room conversations that show Dimon coming close to easing away from the Bear Stearns deal altogether. These never-before-reported talks reveal Dimon's skillful hand in negotiations with regulators and CEOs of the troubled investment banks at the epicenter of the crisis.
A blow-by-blow account of events provides valuable insight into "Dimonology." The JPMorgan Chase CEO sent hundreds of workers into Bear Stearns to get a clear picture of that company's woes, and he demanded updates from them every three hours. He kept his board apprised with a similar frequency. At one point, his closest confidants began to balk at the deal. But, demonstrating the detachment of a master negotiator, Dimon prevailed. "I have never seen him make a decision based on emotion," Buffett observed to McDonald.
In its lengthy lead-up to recent events, Last Man Standing provides rare tidbits about Dimon's school years and upper-middle-class upbringing mainly in New York City. From early on, Dimon showed his ambition, which sometimes took the form of an attitude problem, according to his primary school teachers. He also demonstrated an "early capacity for ethical leadership," writes McDonald: After the only African American in his all-boys prep school was expelled from class for acting out, the teacher commented that "600,000 died to free the slaves, and this is the gratitude we get." Dimon stormed out of the room in protest.
The executive's well-known penchant for "sweating the details" comes through clearly, as does his ferocious ego. In the 1990s at Commercial Credit—a predecessor to Citigroup— a youthful Dimon earned a reputation as an impetuous "hothead." He once approached a whiteboard in a conference room during a meeting, erased all the names listed under a manager he considered "an obstacle," and rewrote the names under his own. His nemesis soon resigned.
As McDonald acknowledges, Last Man Standing covers some of the same ground as another work on Citigroup and its CEO, Sandy Weill, Tearing Down the Walls by Wall Street Journal writer Monica Langley. Like the previous work, McDonald's book shows that both Weill and Dimon were equally "early and enthusiastic participants" in the move to create giant money center banks. That means Dimon must share some of the blame for creating what the author terms a "disaster waiting to happen."
McDonald also makes clear that JPMorgan Chase's position of strength wasn't entirely the result of Dimon's leadership. Bill Winters (who was edged out of the bank in a succession of maneuvers on Sept. 29) was clearly the strategist who advised the bank to shed an $8 billion structured investment vehicle that decimated Citigroup's capital reserves. McDonald also shows that although Dimon fared better than rivals, he miscalculated the severity of the crisis in its early days.
McDonald got sufficiently inside Dimon's head to know his thinking on succession planning. In the last few pages of the book, the author speculates that Jes Staley, former head of the asset management group, will be Dimon's successor. Dimon has no plans to retire soon, but Staley's recent rise to head of the investment bank (edging out Winters) is a signal he's being groomed for the top spot. Once there, Staley may find that there are big shoes to fill.
Business Exchange: Read, save, and add content on BW's new Web 2.0 topic networkThe Low-Ball Bid for BearHow did JPMorgan Chase arrive at its low, $2-per-share offer for Bear Stearns in a whirlwind deal in 2008? "I tell people buying a house and buying a house on fire are two different things," explained CEO Jamie Dimon during an interview that year on Charlie Rose. It wasn't really a question of value but of "how much risk can we bear."To view the video, go to http://bx.businessweek.com/jpmorgan-chase/reference/