David Brancaccio: The head of JPMorgan Chase, fresh from the disclosure that his traders lost at least $2 billion on a collossal bet-gone-wrong, is expected to have a difficult meeting with shareholders. As it happens, the bank’s annual meeting is tomorrow in Tampa, Fla.
And joining me live for some context is Marketplace’s New York bureau chief Heidi Moore. Good morning, Heidi.
Heidi Moore: Good morning.
Brancaccio: So shareholder meeting. They just had this trading debacle — could it be worse timing?
Moore: Worst, David — or the best? It turns out that a lot of these votes have already been cast in the shareholder meeting, so there are few to no consequences except possibly a lot of yelling that the executives will face.
Brancaccio: What would they vote on anyway?
Moore: Well, shareholders there get what’s called ‘say on pay’ — that’s how compensation for 2011, which was last year. So Jamie Dimon, the CEO, he’s supposed to get $23 million for that year; Ina Drew, who’s the chief investment officer, $15 million. And the shareholders will get to decide whether they get that money.
Brancaccio: But as you say, they’ve already cast their vote and not much they can do at this point. Now, with apologies to Alanis Morissette, isn’t that kind of ironic? Aren’t banks always trying to please shareholders on these things?
Moore: Yes. In fact, you could argue that big stupid bets like this were made to boost revenues, which then boost the stock price. But if that the plan, it backfired badly. Since Friday, the stock has been down nearly 10 percent.
Brancaccio: Yes, we’ll see what it does when the market opens. Now there are reports today that heads will soon roll at JPMorgan — just not Jamie Dimon’s.
Moore: Right. Ina Drew, the chief investment officer who I mentioned, she might resign as early as this week. The funny part is, she’s been trying to resign for over a month, reportedly.
Brancaccio: Because maybe she saw some of this coming?
Moore: Exactly. She saw the losses. But especially for shareholder meetings, they talk about optics, which is what things look like. And the optics of having her leave after this are immeasurable.
Brancaccio: So big question would be: If she does have to leave, sort of abruptly — maybe not so abruptly for her if she saw this coming — will she get her money, the pay package?
Moore: She’s very likely to get her money, because that was for 2011. I mean, it depends how bloody-minded the shareholders are, really. But she should.
Brancaccio: Which will be a big part of the story that we’re covering tomorrow. Marketplace’s New York editor Heidi Moore, thank you very much.
Moore: Thank you.
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