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Jamie Dimon's Bonus Could Be Hurt By London Whale Loss

. . .
JPMorgan’s board will weigh releasing an internal report this week that pins some of the fault for the bank’s “London Whale” trading loss earlier this year -- which cost the company more than $6.2 billion -- on Dimon, Bloomberg reports, citing “two people with direct knowledge of the matter.” What’s more, the board will likely cut Dimon’s bonus, the WSJ reports, citing “people close to the company.” . . .

This is pathetic. Executive screws up to the tune of $6.2B and he might lose some of his bonus. Sheeeesh . . . Clearly the word "bonus" means something entirely different for workers than it does for executives.

During my working years I never quite achieved career escape velocity - the kind of advancement that means you never have to face the searing pain of re-entry. I got close, but then I saved enough money to retire before I actually reached sustainable career orbit. I did, however, get close enough to career escape velocity to witness the differences in "bonus" compensation between workers and executives.

When I was an individual contributor, it didn't matter how I performed or what I did, if the company or group I worked in did not meet their goals, I got no bonus. Even when I got a bonus, it was likely that it represented a nice meal or, at most, a weekend away.

Once I entered the lower echelon of the executive branch, my bonuses were not entirely dependent on company or group performance. In fact, part of those bonuses were nearly guaranteed (short of complete corporate collapse). Typically the bonus was like an extra month's or several month's pay.

But at the next level up the corporate ladder, it wasn't even clear what executive bonuses were based on. It seemed mostly arbitrary. And the bonus money could sometimes be more significant than annual salary.

What did Jamie Dimon do during this past year to merit more compensation? What is really sad is that this article (and most corporate boards apparently) doesn't look at executive bonuses a something that should be added to base compensation for exceptional performance. They see executive bonuses as part of the compensation package that can be diminished in the case of severely poor performance.
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