Stewart Glorifies Dimon's Plunder
Do not think for a moment that Stewart is so naïve as to believe that any JPMorgan board member with a nanogram of "common sense" or integrity would (a) not have demanded Dimon's resignation years ago, (b) would give Dimon a raise for leading a bank that committed the most epic financial crime spree in world history, and (c) would regret only that he lacked the courage to give Dimon an even larger raise.
Stewart's tale tells us what everyone knows -- Dimon, like all dominant CEOs after his initial selections, picks his board. He picks them for loyalty and for their identification with his interests. That last point means that they love to ratchet up the income of fellow Plutocrats. Their executive compensation firm (and everyone knows what reputation gets an executive compensation firm selected by CEOs) will use Dimon's raise to justify other CEOs' raises in "the great circle of life" for plutocrats. Stewart admits that he knows about this disgusting "back scratching" compensation dynamic.
Modern executive compensation was a leading creator of the criminogenic environment that produced the epidemics of accounting control fraud that destroyed the global financial system (until it was resuscitated by trillions of dollars that the Fed and the Treasury "carpet bombed" Wall Street with in 1989). Stewart has direct knowledge of how accounting control frauds use modern executive compensation and friendly boards of directors to create fictional income and loot the firm. He now claims that the eagerness of JPM's board to make Dimon even wealthier represents financial "sophistication" on the part of JPM's board rather than one of the most depraved and destructive dynamics in finance.
Stewart's final phase of his career has reduced him to the status of yet another writer that "glorifies" the plutocrats' plundering of the public. He thinks that is a "common sense" approach to the world.
Stewart's Spin
Let's look at how Stewart tries to make his readers believe that Dimon has no influence over his compensation. Note the small but telling spin of Stewart referring to Dimon as "a board member" rather than "the Chairman of the Board of Directors."
"And these people stressed that Mr. Dimon had scant influence on the committee and board regarding his pay, and did not even know what it was the night before the decision was announced. (Although a board member, he left the room when the topic came up.)"
Seriously, that's the best you've got? He left the room? The CEO always leaves the room. The average reader could pick seven folks and be confident that a majority of them would do right by you in giving away someone else's money to you as generous compensation? Would you have to be in the room to be made wealthy?
In May 2012, Deal Book repeated Dimon's threat to the Board of Directors to resign if they even dared to take the most elementary step in good governance -- not allowing him to be both the CEO and the Chairman of the Board of Directors: "investors are factoring in the possibility that Mr. Dimon may resign if they vote to split the roles."
Stewart doesn't tell the readers about Dimon leaking the same threat in the run up to the 2014 board meeting that gave him his massive raise. Deal Book reported that "cutting Mr. Dimon's pay would, some board members feared, alienate the chief executive." Dimon wasn't in the room, but his threats were in the room.
Stewart cites a professor who implicitly explains the power of Dimon's threat: --What if you punish him and he gets angry and leaves?" The obvious answer to that threat, if the board were not a bunch of Dimon's cronies is: "thank God!" The "punish him" bit is a might kinky. There was never the slightest suggestion from the board in its January 2014 meeting (according to the Board's many press leaks) that they would "punish" Dimon. As I explain below, the only choices they entertained were whether to make Dimon far wealthier or much wealthier.
Stewart tells us that the board was "independent" of Dimon because the most famously anti-social businessman in America, a man who believes CEOs are entitled to massive pay and is wealthy because of that pay, chaired the JPM board committee that gave Dimon his massive bonus as a reward for managing JPM during its epic financial crime spree.
"Mr. [Lee] Raymond, the committee chairman, is famously independent -- some might say insensitive. While at Exxon Mobil, his stands on global warming, gay rights and doing business in countries with repressive regimes led The Wall Street Journal to describe him in a profile as "a strikingly politically incorrect character for a modern-day, big-company C.E.O.' While he was at Exxon Mobil, his compensation was routinely criticized as excessive, as was his retirement package valued at nearly $400 million."
We need to begin with the four obvious points that Stewart doesn't make about Raymond. Even Deal Book, which fawns shamelessly over Dimon, reported on May 12, 2003 that Raymond was a sedentary ally of Dimon.
""My perception is this is an old-fashioned board, Jamie runs the show and we don't mind,' said Christopher C. Grisanti, whose firm owns 246,000 shares of JPMorgan Chase worth roughly $12 million. "We don't think the lead director at JPMorgan exercises that much power, and that is a positive because Jamie is one of the best C.E.O.'s in our portfolio.'
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