Are CEOs Paid Too Much? Not All of Them

James DimonWhen Americans read about CEOs getting compensated to the tune of tens of millions of dollars, they think of what their local teachers or firemen make and wonder what those executives could possibly be doing to earn so much. When shareholders see those compensation packages, they're concerned for a somewhat different reason: They wonder why CEOs should make so much when the returns they produce for stock owners are often so modest?

The JPMorgan Chase proxy filed Thursday shows that CEO Jamie Dimon, one of the most highly regarded financial firm chiefs in the world, made $20.8 million last year. That was up from just $1.3 million in 2009, when his compensation shrank due to pressure on JPMorgan (JPM) because of its horrible earnings in the Great Recession that followed the credit crisis. Last year, Dimon also got privileges to use the company plane -- but he had to reimburse the bank for most of those costs.

Back in 1930, when baseball great Babe Ruth was asked why he made more money than President Hoover, he supposedly told the press: "I had a better year." That probably seemed like an entirely fair comment at a time when Hoover was marching the American economy deeper into the Great Depression.

Today, Dimon might say the same thing to justify what he made in 2010 compared to his peers. Over the past year, JPMorgan's stock has thrashed Goldman Sachs (GS), Morgan Stanley (MS) and Bank of America (BAC). In March, the bank raised its dividend from $.05 to $.25. And JPMorgan also beat earnings estimates for the fourth quarter of last year.

The large business magazines and newspapers will soon come out with their lists of CEO compensation for 2010, and the annual uproar about executive pay and bonuses will begin anew. Dimon's pay package, though, will be a hard one to challenge.



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mjohn67610

Nobody is worthy of this type of compensation on Wall Street. Look to specialized surgeons and their medical core through research , to allow these overpaid FATASSES live an obscene lifestyle when they are needing the best of medical care. Let them rot in hell--these greedy bastards have ruined our great country. Wake up America--you are consuming the poison drug called WALL STREET BANKERS that are ruining America and laughing @ all us stooges that go to work everyday and pay our taxes. Corporate America has sold its soul--GO TO HELL WALL STREET AND ALL YOUR ****** !!!

April 11 2011 at 10:02 PM Report abuse +2 rate up rate down Reply
HUMBERTO

FROM PERSONAL EXPERIENCE, I BELIEVE JPMORGANCHASE CREATES FICTIONAL STORIES
BY TARGETING OLDER AMERICANS, WITH CHASE CREDIT CARDS, AND MAKE FALSE TRANSACTIONS ,
THAT REQUIRED LAW ENFORCEMENT , AND STILL IN PROGRESS.

April 11 2011 at 4:48 PM Report abuse +2 rate up rate down Reply
WILLS

There is more than one way to look at compensation. Many others seem to feel that CEO's own the boards. Doubtful, but another explanation is that the boards usually decide on their OWN compensation, and therefore the CEO's compensation has to have some balance with THEIRS. I hardly think that Jamie is underpaid at 20 mil and if we saw his tax return it's probably a lot higher as the IRS includes perks as taxable income. This blog would probably conclude that what Grasso took with him was just. Anyway this cake is cut is adds up to an 80% share being held by the wealthy, with the bulk of the population holding 20%. At present rate is will be 90-10 in another 5 years. Please look at the Ryan proposal - all cuts are in the 20% bracket and with this it will take 20+ years to achieve it's purpose. Why does Congress have such a disdain from increasing taxes on those that can afford to pay a little more? If there has to be pain
(and it is necessary), spreading it is in order.

April 10 2011 at 5:52 PM Report abuse +3 rate up rate down Reply
lyleva

Not all of them...just about 87% of them. They are GREEDY. Load themselves yup with huge compensation oackages...jet airplaces, yachts, 2nd and 3rd homes, personal services and stock options. and then have it all approved by boards of directorssd who they appoint!

Forget shareholders or investors...

April 10 2011 at 3:45 PM Report abuse +3 rate up rate down Reply
johnson

I think the answer is with the shareholder; however, your average shareholder or mutual fund participant would have as much input in corporate board policy which sets pay for the CEO and the board, as a worm has in Papal policy. In other words, the average shareholder would have no impact. The "vote by proxy" papers sent to shareholders are a joke. The shareholder should have a say in the board policys of the corporations and this includes compensation, however most shareholders interests, particularly if held in mutual funds, are sorely underrepresented. The shareholder isn't viewed as the beneficiary in a fiduciary responsibilty, to which the board owes a duty of care, but merely a cash cow. I submit that the corporate boards do owe a duty to the shareholders, but will ignore the small shareholders, cause why not? They've been getting away with it for years. I call it the raping of the mutual fund shareholder.

April 10 2011 at 1:34 PM Report abuse +2 rate up rate down Reply
Beautiful

If these are private businesses, it's up to that business. It's isn't any of YOUR business what a private business does.

April 10 2011 at 1:18 PM Report abuse -1 rate up rate down Reply
1 reply to Beautiful's comment
gardeningatnite

Yeah! Sure! I suppose you are right.....unless you have worked from them for 30 years and you get laid off right before 'pension time'!!!!!

April 10 2011 at 6:17 PM Report abuse +4 rate up rate down Reply
pressacco3

with people just able to pay for gas here are all these company paying the ceo big buck and nothing for there work force its just f------ greed . i just wonder what its going to take to wake america people up to take control of this country / ther is so much corp and greed with the goverment and big company the avg america need to stand up for what is right before its to late may god help us all WAKE UP

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April 10 2011 at 10:24 AM Report abuse rate up rate down Reply
gardeningatnite

Are movie stars; mo vies producers; athtletes paid to much. No! However all we anly talk about the CEO's of busienesses. All of the above are CEO's of there own personel interests. So why aren;lt they included in the conversation!!!!!!!!!!!!!!.......Okay, now I will include them! Tax em all (50%) and let god sort it out!

April 10 2011 at 10:02 AM Report abuse +2 rate up rate down Reply