King Jamie Dimon: CEO “Larger Than Life..And He’s Starting to Believe It”
“…I don’t think I’ve changed fundamentally since I’ve been eight years old,” Jamie Dimon is quoted as saying in a long, apologist piece in November’s issue of Vanity Fair. ”Moral courage is the most valuable and usually the most absent characteristic in men,” Jimmy Lee, the vice-chairman of investment banking at JP Morgan Chase quoted General George S. Patton in August in the ballroom of the Townsend Hotel in the affluent Birmingham, Michigan with 150 or so JPMorgan Chase employees in attendance. He was using the General to describe his boss Jamie Dimon, JPMorgan Chase’s CEO. “Jamie Dimon,” said Lee, “has moral courage running through his veins.”
Dimon spoke after Lee, donning white sneakers, Wrangler jeans and a blue Vineyard Vines polo shirt that the executives were wearing on the bus tour. The Vineyard Vines logo, found on the sleeve, ironically featured a whale on it, reminding everyone of the London Whale episode which has cost the bank billions. He called last summer’s debt-ceiling crisis “a disgrace,” the nation’s tax system “a disgrace” and maintained that “just because another bank messed up doesn’t mean we should take apart JPMorgan…If there isn’t a JPMorgan straddling the globe serving clients, then a Chinese bank will happily fill that role.” And, surely Russians under Stalin preferred death by fellow Russian, German Jews under Hitler preferred death by fellow Germany, and citizens in the west prefer death by western bank. As for Obamacare: “I was in favor of universal health care, but what we did didn’t fix the problem; we just did the universal part.” Dimon opined further:
“It may seem that businesses go to Washington and complain a lot—like a boy who cries wolf,” he said, “but there are real issues here that are important for our country and our industry. The denigration of business hurts America, because the secret sauce for our economy is confidence I don’t want to hear that nonsense that all business is bad.” Dimon has been staunch on the right before in his enunciations. After all, this is Jamie “It’s a Free Fucking Country” Dimon:
“I’m an outspoken defender of the truth,” JPMorgan CEO Jamie Dimon feverishly maintains in an interview published today. In the interview, he continuously contends that the press and the country have it all wrong about JP Morgan. He seemingly separates JP Morgan out from the current-leading American banking foe of Europe, Goldman Sachs, and the other Too Big To Fail financials. His is a good company, and American company. Behind the peppy, defensive surface – the interviewer likens Dimon to an overgrown frat boy – the bank has spent billions in litigation, as the lawsuits and investigations pertaining to JPMorgan fill eight-pages of the firm’s quarterly filing (10Q), more than 9,000 words.
“This is not the Soviet Union,” Jamie said at the interviews close. “This is the United States of America. It’s a free. Fucking. Country.”
Continuing on his bus tour 2012, designed to show JP Morgan as a “force for good in the world,” Dimon made his a stop in the Detroit area. The bus tour took him through midwestern towns and cities. When Dimon got off the bus in each city, employees surrounded them for hugs, fist pumps and high fives in what he and other JP Morgan executive called “the Tunnel of Love,” as if they were a long-standing football team patting each other on the asses in the locker room. One Ohio teller cried when she had her picture taken with Dimon. “Did you see that?” Dimon asked when he got back on the bus. “That’s what I’m talking about – companies are made up of real people who give a damn!”
The executive took their employees, such as tellers, branch manager and small-business bankers “hostages” in each city - not in the same way Wall Street banks have taken the US taxpayer hostage – to ask them what it is JP Morgan could do better. When one hostage, a blonde teller, staid she used to be a hairdresser, Dimon softly came onto her: “I love your hair.” Jamie has always been remembered as quite a smoothie. He’s such a smoothie, that’s the Morgue is profiting hugely at taxpayer expense. But, he won’t pay lip-service to that. Short of God’s Work, the Morgue is keeping this country afloat. But, outside of his aside worldview, things are different:
Is JPMorgan worried about its potential $18 billion dollar loss? Perhaps not, when it could be offset by $14 billion in United States taxpayer subsidies – that’s 77 percent of its total net income in the last four quarters! And this comes as no surprise as over the last several decades governments and central banks around the world have shown willingness to keep their banking brethren solvent in times of opportunity bringing crisis.
On the JPMorgan team bus, he offered a prize to someone who could identify the tune “Post Break-Up Sex,” by the Vaccines:
The bus trip was Dimon’s idea, and it was met with resistance when he first e-mailed the idea to his senior executives back in 2010. When told other executives were concerned with safety, Dimon replied in his typical vulgar, but incisive English: “That’s bullshit. We have to live our lives and do the right thing.”
This year, though, dizzying scandal surrounding the bank blanketed the trip like fog rolling into San Francisco Bay. On May 10, as the London Whale Scandal broke, Dimon knew things were about to get dirty: “It plays right into the hands of a bunch of pundits out there,” he said then. “But that’s life….We have egg on our face. We deserve any criticism we get.” On July 13, Dimon spent most the day explaining the losses to the media and analysts, and even hinted that the traders in London may have mismarked the trades to make them look less problematic, an illegal move the Justice Department is still investigating.
Afterwards, Dimon received a surprise phone call from Tom Brady, the star quarterback of the New England Patriots. Brady apparently told Dimon that even Super Bowl champs have bad days and “to hang in there.”
When asked about the London Whale incident, Dimon had his catchy answer ready to go: “The London Whale drama has been harpooned, beached, eviscerated, cremated, and killed. So help me God! It’s fish food.” Still, one of the most bewildering points about the London Whale incident is how one of the most numbers-obsessed CEOs on Wall Street didn’t seem to understand the details of some of his bank’s missteps. How did he not know about the London bet until it was too late? Does he know how much his bank is losing?
The nation’s biggest bank by assets, JP morgan, has lost more than $22 billion in shareholder value and $28 billion in market value since the London Whale was made public in April 2012 according to Bloomberg. Much reported and demonstrative of just how well the TBTF CEO’s up-on-high have it, Dimon originally called the reports of a London Whale a “tempest in a teapot,” but had to go back on that phrase as the firm reported a 2$ billion loss a month later. For some, not enough quarters for laundry is a tempest in a teapot, let alone a loss of money unimaginably in excess of their lifetime earnings down in the basement. Since the loss, JP Morgan has grown accustomed to regulatory and legal proceedings on numerous fronts. Perhaps this is Washington’s way of breaking the stubborn Jamie Dimon into the incoming new maze of Soviet styled regulation the once touted risk manager fears so totally?
Dimon, nonetheless, has a fortress built around him. The 56 year old is still the darling of Wall Street, and in 2011 made $23.1 million, making him the highest paid among Wall Street CEOs. He owns 7.2 million JPMorgan Chase shares which are worth nearly $300 million. He also is sitting on his earnings from his years helping to build what today is known as Citigroup.
Despite his vast fortune, Dimon is described by people like Heidi Miller, who worked for Dimon for 18 years and was once listed as the most powerful woman in banking, as “rumpled.” According to Miller, “He’s not an extravagant man. I swear, if his wife didn’t point out shirts that match his suits, I’m not sure what he would look like in the morning, half the time…He’s very oblivious to the trappings of very fancy things.”
Dimon “ruffled feathers all over Chicago,” when he lived there as a CEO of Bank One. While most CEOS might consider it their job to attend black-tie charity events, for example, Dimon was concerned with growing earnings, expanding branches and providing jobs. The rest he considers “BS.” Despite that the CEO doesn’t play the game, he is by no means a populist. Although he might eat at classic American burger joints, you’re not going to find him on a Southwest flight to a business meeting. You will find him instead on a private jet. His $10 million apartment houses him as does his 34-acre Bedford mansion.
Dimon is a great face for a bank being investigated by more than 11 government agencies worldwide. He basks in limelight, and around Wall Street one often hears the term “The Cult of Jamie.” According to one former colleague. “I do think he’s exceptional,” a former colleague says. “But I think he’s narcissistic. He’s very self-focused, so he loves his image. It’s an extremely important part of who Jamie Dimon is. His own reflection in the mirror is a very important part of the person.” Another one echoes this sentiment: “What do I think makes him tick? I think he likes being King Jamie. It may not be the same as being president or maybe Treasury secretary, but after that it’s not bad to be an imperial C.E.O. of the country’s largest and most important bank.”
But, at the very least: “True, he has a healthy ego,” but he adds, “If you call him on it, he can laugh at himself.” In public, Dimon is sure to remain center-stage, in the good and bad times. “We made a mistake,” he told Senator Jeff Merkley, a Democrat from Oregon while testifying in Congress this past summer. “I am absolutely responsible. The buck stops with me.” The lawmakers drank Dimon’s kool-aid like fratboys at a weekend party. How’d he do it? According to one long-standing JPMorgan pall-bearer:
Great leaders always have this special sauce that is like a heavy dose of humanity, the ability to get people to follow them, even in the face of adversity, the ability to connect with people—you saw it in the hearing in Washington—and the ability to treat big people the same as little people. One of Jamie’s favorite questions, when we’re talking about giving someone a big job here, he’ll say, ‘Would you want your child to work for that person?’ It’s an interesting way to look at it, and what it says to me is he’s got this God-given sort of oversupply, almost, of humanity.
Dimon never worked on the front lines as a trader, etc. at a Wall Street Bank. Despite the investigations, according to one former JPMorgan executive: “He never had to tolerate or be subjected to a true 360-degree review.” When Dimon moved from Bank One to JPMorgan, many of his former colleagues followed. But, today, very few remain at his side. “Those who thought that the relationship was more than transactional were the ones who then became the most shocked when they found out that it wasn’t,” explains a former Dimon follower. “All of this talk about these loyal lieutenants and all of that, how many really are there? How many are left now?”
Charlie Scharf worked for Dimon for 25 years. But, in June 2011, Dimon says Scharf asked him to be reassigned. “It’s not what you think,” Scharf says. “It’s not about the money. I don’t have the ego. For some people, it’s all about the next job; it’s all about being a C.E.O. I could be very comfortable doing what I’m doing for the rest of my life.”
Dimon doesn’t apologize for getting rid of those closest to him. “If you’re blindly loyal to me, then you’re just acting like a crony of mine,” he explains. “If you say you admire me because of the principles for which I stand, I understand that, but then you also have the right to call me to the carpet when you think I’m falling short. I get that here every now and then. I get people saying, ‘Jamie, you always say “X.” You ain’t doing it, not in this case,’ and sometimes I have good reason for not doing X. Sometimes I was unaware I wasn’t doing X, and sometimes I’m just dithering, dathering, like everybody else.”
In some regards, Dimon’s hypocrisy alienates those around him. One former JPMorgan Chase executive recalls one experience with the highest paid CEO in Wall Street complaining of the pay of those around him: “I have a very vivid memory of sitting in a meeting with the controller, the internal auditor, the external auditor, and a few more junior people sitting in the room…and Jamie ranted and raved and said that nobody was doing their job right and everybody was being paid more than they should be paid.”
The ex-banker continues: ”I went into his office, and I said, ‘For God’s sake, this is totally unacceptable behavior’—kind of regurgitating what he said and how he said it—moving him to pick up the phone and apologize. He did the same, in some instance, to the head of technology in the company.”
Dimon rejects the stories: “First of all, I yell very little, just so you know,” he says. “Maybe years ago I did more, but I yell very little.”
Dimon is the perfect manager of the game psychology used today in Wall Street’s halls. He grew up in Queens and attended Tufts University, where he doubled-majored in economics and psychology. His classmates recalls Dimon as “brash, a bit of a bully, and quite the ladies’ man.”
During his first and second summer of an MBA program, Dimon worked for Goldman Sachs. He had investment-banking job offers from that firm as well as from Morgan Stanley and Lehman Brother’s, but his father, who worked at the brokerage unit of American Express, passed an essay Dimon had written about the rise of American Express. “Jamie didn’t have that sort of early struggle that most of us mere mortals have,” one former colleague says, adding,“You can understand Jamie Dimon only through the lens of Sandy Weill.”
Dimon took lower-paying job at American Express because Weill promised the experienced would be “fun.” Once Weill lost a power struggle within American Express, Dimon followed him to begin piecing together CitiGroup. Being hyper-ambitious and narcissistic, Dimon wanted Weill’s job. “He and Sandy had a very complicated relationship,” says Michael Schlein, a former Citigroup senior executive. “It played out in lots of different ways, but fundamentally Jamie was ready for his starring role and Sandy wasn’t ready to leave the stage.”
In November 1998, Weill fired Dimon during a Citigroup weekend retreat in Greenwich. “It hurt,” Dimon recalls. “I helped build that place, and the people there were my friends. I was surprised to get fired. Maybe I was a little naïve. One or two people told me it would be coming, but I didn’t realize how Sandy had worked to make it happen.”
Dimon is okay with a voluntary cult of personality: “If people talk about the ‘Cult of Jamie’ because they respect me and listen to me and trust me—then that’s not a bad thing,” he says. “But if you mean the ‘Cult of Jamie’ because I’m the boss and no one can question me, that’s not a good thing.”
Although Dimon hasn’t had a Blankfein “doing God’s work” moment, he believes in what his bank is doing: “We’ve helped keep California, Illinois, and New Jersey afloat,” Dimon told the crowd in Detroit during his bus tour. He elaborated on this in his congressional testimony, explaining how JPMorgan had lent these struggling states money when no other bank would.”
Of course, his bank is the bank that is settling for $200 million to settle charges related to a wide-ranging scandal over municipal bid rigging.
“Look at what Goldman actually did wrong,” says a former Goldman executive. “Then you look at all the things JPMorgan has done wrong, and they are all the way back in the business pages. I say this without criticism and with admiration, but the way he [Dimon] has kept that bank’s reputation is amazing.”
“Customers will only do business with us if we’re better, faster, cheaper,” Dimon says. “If not, they’ll go someplace else.” He frequently points out that, although JPMorgan Chase’s mortgage business lost money in 2008, the investment bank made money, and vice versa in 2009. “Take away our ability to be diversified and the result is a wobblier system,” he says.
Despite the turbulence his bank has felt, there are certain things only the Morgue will do. According to Warren Buffet, Dimon did not blink when Buffet called him asking for $8 billion to purchase a new company. Dimon told him ” You got it.”
“Even with some of the other big bank, that’s not something you can do on the phone,” Buffet says.
Not only is Dimon’s slickness helping the bank get by amid rampant scandal. JPMorgan is perhaps the most connected bank to Washington. Among its staff are many, many politically connected former congressional staffers, and the firm is known for the regularity with which its top people are in Washington. Dimon regularly lambastes regulators for making “hundreds of rules, many of which are uncoordinated and inconsistent with each other.” Dimon is stalwart in trying to preserve Wall Street profits. “This country would be flying if we had gotten stuff right and all worked together, but we haven’t,” he says.
He frequently derides that banks and bankers are being “scapegoated” for their role in the crisis. He often quotes Abraham Lincoln: “I’m a Democrat, and I tell Democrats and Republicans, you guys are busy simplifying and scapegoating – well, Abe Lincoln wouldn’t do it.” Dimon says he has heard a story of a young officer telling Lincoln during the Civil War, “We’re going to win because God is on our side.” Lincoln responded: “Son, let’s hope that we’re on God’s side.” JPMorgan Chase PACs and employees are nearly four times as much for Mitt Romney as they are for Obama.
Dimon has been called “Obama’s favorite banker,” but the stress on the relationship between the two has been palpable: “The chemistry between him and the president has been bad,” says a former administration official. At President Obama’s inauguration, Dimon is reported as having told Obama and Treasury Secretary Tim Geithner: ““Tell me what you need. I’ll send people down here. I’ll do anything,” says one D.C. personality. “Jamie walked into 2009 with the view that he was on the team.” But, Jamie wasn’t on the team.
In January, Dimon went on a tour of the White House with his wife and daughters for a tour. The president was working on his State of the Union address, and was in the Oval office. Nobody was expecting the run-in. Obama said that “I’d like to see him, although I don’t know if he’d like to see me!” Pictures were taken and a few weeks later Jamie and the president had lunch together.
When asked if the experience of the London Whale has made him a better leader, Dimon is can’t be sure: “I think maybe it’s too late to make me better or worse, overall,” he says. “Look, I’m 56 years old. Going into the Whale, I did everything I thought I was supposed to do, and I got a lot of advice from people I’m sure I’m better for what I experienced in some way, but it’s hard for me to tell right now There’s no reversing it.”
Dimon’s likely successors today are presumed to be Zames, 41, and Mike Cavanagh, 46, but Dimon isn’t leaving. Not yet. “I intend to be here for many more years,” he says.
There are plenty of things Dimon wants to do, like running a bar on the Upper East Side of Manhattan to teaching or investing with others in small companies. But, the titan is more certain what he will not being doing: “I will not run another major company,” he says. “I will not take a job with fiduciary responsibility, and I will not run for office.”
But, for now he remains with that fiduciary responsibility.
“His persona is bigger than what he specifically advocates. I don’t know if it’s wise. But he could not do it otherwise…In the last couple of years he’s had books written about him; in the public arena, political arena, he’s become larger than life, and I would argue that he’s starting to believe it all himself to some degree,” says a former financial-industry C.E.O. “The arc of a C.E.O. who gets idolized is that they ultimately fall off the pedestal,” says another financial executive. He adds, “JPMorgan suffered from two big things that every bank should fear: a dangerous combination of complacency and hubris.”
JP Morgan is the likable, popular guy at everybody’s school – usually an athlete. He is good with the ladies, gets good grades, and works hard to be better than others. Success has come easily. Didn’t have to struggle out of college, and his infectious personality has seen him treated like a hot blond walking down the street – politicians, and most, melt in his hands. He parties hard, he works hard, and he is ideological. Even in places where one should expect not to be listened to, like the White House,- no matter how powerful you are, you must be the most powerful to be heard – he is incensed that his suggestions go unheeded. He can’t wrap his mind around how he, the biggest CEO on Wall Street, can’t get anything done in Washington. He is a Democrat, and so he believes in the two-party system (at least publicly), and this is probably true personally.
He also believes in his banking mission. He believes in the system and so therefore his bank, at the heart of the system, is doing good. Maybe he won’t call it God’s Work in public, maybe he is not a religious man. But he knows it is his institution that is responsible for progress, and he doesn’t believe anyone should get in his way.