JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon assailed the pay practices of the newspaper industry today as he sought to deflect criticism of bank pay as viewed through the compensation ratio.
“Obviously our business, in investment banking in particular, all of our businesses, we have high capital and high human capital,” Dimon said today at a presentation in New York, where the bank is based. “Newspapers -- I went and got this one day just for fun -- 42 percent payout ratio, which I just think is just damned outrageous.”
Lawmakers and journalists have criticized bankers for the size of their salaries and bonuses and regulators have blamed compensation for fueling the financial crisis. Dimon, who runs the biggest and most profitable U.S. bank, previously cited the media industry during a January investor call in which he sought to show why using compensation payout ratios is wrongheaded.
JPMorgan paid the 25,999 employees in the investment bank an average of $341,552 last year, or about 34 percent of the unit’s revenue, according to figures posted Jan. 13.
“Worse than that, you don’t even make any money!” Dimon said, directing his comments to those in the media covering the company’s investor day and drawing laughter from his audience. “We pay 35 percent. We make a lot of money.” JPMorgan posted $19 billion in profit last year.
Gannett Co., the McLean, Virginia-based media company that produces 82 daily publications including USA Today, earned $518 million last year. The stock has dropped 8.7 percent in the past year, while JPMorgan has fallen 16 percent. Since the end of 2007, Gannett is down 61 percent, while JPMorgan is off 10 percent.
“Newspapers do make money and they are still quite profitable, many operating with double-digit margins,” said Randy Bennett, a spokesman at the Newspaper Association of America.
To contact the reporters on this story: Dakin Campbell in New York at firstname.lastname@example.org; Andrea Ludtke in New York at email@example.com.
To contact the editor responsible for this story: David Scheer at firstname.lastname@example.org