The chairman and CEO of JP Morgan Chase is a modern day Midas who thrived through the financial crisis. At 65 is there any stopping him?
Jamie Dimon likes to tell a story from the short time he spent as a management consultant in Boston before going to Harvard Business School. One of the firm's partners ordered the future Wall Street tycoon — then a precocious twentysomething with a degree in psychology and economics — to work all weekend and deliver a project to his desk by Monday morning. Dimon did as he was told.
At 9am on Monday there was no sign of the partner. He didn't show up at 10am or by midday. Finally, at 1pm, he appeared and admitted that he hadn't actually needed the report by Monday after all — he'd just wanted to make sure it was done nice and early. "But you ruined my weekend," Dimon protested. "And because of that, I will never work on another project for you again."
Colleagues took the young hothead aside and told him this wasn't how it went — he couldn't make a decision like that unilaterally. "Yes, I can," he replied. "And they can fire me if they want to."
Dimon's uncompromising approach won out. He wasn't fired. The intended meaning of his parable is that you should always treat staff with respect, no matter how lowly they might be. But it can also be read another way: Jamie Dimon will always do exactly what Jamie Dimon wants.
When he entered Harvard a year or two later in 1980, Wall Street was becalmed. Corporate America was still reeling from the bout of "stagflation" — a toxic combination of sluggish growth and rising prices — that cursed the late 1970s. As he looks out at Manhattan's landmarks from his office on the 41st floor of JP Morgan Chase's midtown skyscraper today, the executive chairman of America's biggest bank can reflect on how much has changed. Western economies, ravaged by Covid and supply-chain problems, are once again staring into the gloom of faltering GDP and surging inflation. But this time Wall Street is roaring away, fuelled by cheap money and the resulting appetite among corporate chieftains for borrowing, takeovers and devices such as Spacs — special purpose acquisition companies.
JP Morgan, and Dimon, are at the heart of it. The graduate whose insolence so struck his seniors in Boston more than four decades ago has made it to the top with his idiosyncratic blend of arrogance, intellect, self-confidence and warmth. This month he enjoyed the kind of establishment blessing new money relishes. Wall Street's reigning monarch was one of 200 global business leaders invited to meet the Queen at Windsor Castle — a piece of post-Brexit razzmatazz devised by Boris Johnson's team partly as a riposte to the French president, Emmanuel Macron, and his annual investment summit at the Palace of Versailles. Dimon, who had been excited about the encounter, dialled into a conference call from Windsor and casually told some of JP Morgan's wealth advisers that he was about to meet Her Maj — and that he was also giving them a pay rise. "You are listening to the Queen's quartet, and I am about to meet the Queen, but I really wanted to be with you all," he said.
Dimon has held on to power through several booms and crises, including personal ones — he has survived throat cancer and underwent emergency heart surgery at the start of the pandemic. Dimon was back on a conference call little more than a week after rushing himself to hospital days before his 64th birthday with an aortic tear. He returned to remote full-time work the following month.
Dimon has had to change his exercise regime since then — running and tennis have been replaced by less intense treadmill workouts — but he has otherwise resumed his punishing schedule. JP Morgan's executive chairman wakes at 5am and reads five print papers (always the New York Post first and The Wall Street Journal last, with Bloomberg and CNBC on in the background). He is in the office by 7.30am, although he travels almost every other week and advises aspiring leaders to "get out on the road, see clients and hang out with your people". Dimon, who speaks with an outer-borough Noo Yawk accent and combines a ready sense of humour with a hot temper, likes to barge into meetings and drop in on colleagues unannounced. He can be surprisingly analogue: he carries around in his pocket a folded-up piece of paper with a handwritten list of who owes him favours and who he owes.
This shoot-from-the-hip banker has helped reshape the financial landscape beneath him. Dimon's obsession with maintaining a "fortress balance sheet" meant that JP Morgan emerged from the 2008 banking crash bloodied but unbowed and became the US government's buyer of last resort, taking over the stricken investment bank Bear Stearns and the savings group Washington Mutual.
JP Morgan has 19,000 staff in Britain, including in Bournemouth, Edinburgh and Glasgow. Dimon, a vocal critic of Brexit, handed Macron a PR coup in June when he declared that the bank's new building in Paris would become its main trading hub for the EU, prompting le president to gush: "I love the idea that you love France." Before Brexit Dimon had warned that JP Morgan might have to cut some 4,000 jobs here if Britain voted to leave.
Although it has in fact moved hundreds rather than thousands of roles to the Continent, insiders point out that over time it will create new jobs in Europe that might otherwise have been created in the UK. And it has shifted hundreds of billions of euros in assets to Germany, where the JP Morgan office oversees all the company's EU businesses including the French trading hub.
But JP Morgan's tower at 25 Bank Street in Canary Wharf, which houses most of its 12,000 London staff, remains its European HQ and nerve centre. Johnson's Windsor Castle wooing was part of an erratic drive by No 10 and his neighbour in No 11 to keep things that way.
Under Dimon, JP Morgan has made eye-catching appointments from Westminster. It hired Tony Blair and Sajid Javid as advisers and this year poached the one-time Labour leadership hopeful Chuka Umunna to oversee its sustainability work in Europe. It has assimilated the blue-blooded British stockbroker Cazenove and the digital wealth manager Nutmeg, and launched an online-only bank in the UK under the Chase brand.
It has advised on myriad corporate deals here, the most recent including Lord Rothermere's plan to take the Daily Mail's parent company private and former Tesco boss Sir Terry Leahy's takeover of the supermarket chain Morrisons. JP Morgan also offered to bankroll the European Super League, the proposed breakaway football competition that imploded amid a firestorm of criticism earlier this year. Dimon fiercely denies that JP Morgan's Super League involvement was driven from New York rather than Canary Wharf. "Total fawkin' lie," he will snap at the suggestion that the whole thing was an American-led caper.
Dimon sits atop a global empire with 255,350 staff, 85 million current accounts, US$122.9 billion of revenues and US$3.4 trillion in assets. The only bigger banks in the world are China's state-owned giants.
JP Morgan's total returns to investors in the Dimon era easily outstrip those of its closest competitors. Shareholders have made more than five times their money — 530 per cent — since he took over in December 2005. In contrast, Goldman Sachs has returned 276 per cent, Morgan Stanley 188 per cent and Bank of America 29 per cent, according to the stockbroker AJ Bell. Investors in Citigroup, where Dimon first made his name, have lost 80 per cent of their money. High-pressure JP Morgan is believed to be the model for Pierpoint & Co in the BBC drama series Industry.
What does the man who has everything do next? Dimon, who leans Democrat but has an air of George W Bush and speaks folksily from the corner of his mouth, freely effing and blinding, has considered shooting for the only higher prize. He "thought about thinking about" a run for president in 2018, well before last year's election, according to someone close to him, but "decided there was no chance that he would get through a [nomination] process". He teased the media at the time — saying of Donald Trump that "I'm as tough as he is, I'm smarter than he is". But he has reconciled himself with the realisation that "in this society, at this time, he would not be able to win", the source says.
For now, he has to settle for an unofficial title: president of Wall Street. Dimon's annual letter to shareholders is a 50-plus page treatise on the state of finance and the world. It reads like an address to be delivered from a podium draped in stars and stripes. Last year's ranged from the importance of being a good corporate citizen ("I have always loved that Home Depot's company policy is not to raise lumber prices in the immediate aftermath of a hurricane"), to climate change, to the rise of Big Tech and fintech, to Brexit ("this cannot possibly be a positive for the United Kingdom's GDP" in the short term), to the killing of George Floyd, to the challenge posed by China, to problems with the American education and healthcare systems, to the need for better industrial and trade policies, to the US dollar's reserve currency role. It concluded, rousingly: "Let us all do what we can to strengthen our exceptional union."
This president has many admirers. "He's one of the best bank CEOs in the world," says a senior European financier. "He is both very strategic and very hands-on. He knows every detail. He analyses things and answers quickly. He's very sharp, sometimes a bit tough. He always keeps his word."
And he has his detractors. Dimon made errors of judgment in the London Whale scandal of 2012, when trading losses by one of JP Morgan's Canary Wharf bankers ended up topping US$6.2 billion. Dimon initially dismissed the story as a "tempest in a teapot", which he quickly came to regret. A keen student of how to win and retain power, he is seen as having ruthlessly pushed out or sidelined potential successors, including Bill Winters (who went on to run Standard Chartered), Charlie Scharf (who now runs Wells Fargo) and Jes Staley (Barclays).
Dimon's earnings raise eyebrows among those who point out that he mentioned income inequality no fewer than seven times in his latest shareholder letter. The JP Morgan boss, 65, has a fortune of US$1.9 billion, according to Forbes. He earns about US$30 million a year. He recently accepted a package of stock options worth an estimated US$49 million, spread out over ten years. Dimon says the board insisted that he accept the options — although as both chairman and chief executive, a combination frowned upon under UK governance rules, he really is the board.
More telling than the size of the potential payday, perhaps, is the duration of the scheme. Up to another decade of Dimon raises questions over succession planning. "He's a king-emperor," shrugs a former JP Morgan investment banker who left on bad terms. "He's a complete narcissist. Underneath it all, he's a 1960s, or even 1950s American CEO who believes, genuinely, in absolute power."
In 1998 Jamie Dimon was fired. This wasn't a routine layoff or sacking. He was brutally and humiliatingly ousted by the man who had been his boss and mentor for 16 years, Sandy Weill.
Weill, a buccaneering takeover merchant with a penchant for martini-fuelled power lunches at Manhattan's Four Seasons restaurant, and his ambitious, number-crunching protégé had together built something remarkable. Starting in 1986, after Weill was himself pushed out of American Express, they began making deals in financial services, creating the conglomerate that ultimately became Citigroup. In 1997, as Wall Street revelled in a new golden era ushered in by the US Federal Reserve chairman Alan Greenspan, Weill and Dimon's sprat, Travelers Group, swallowed the whale and paid US$9 billion for the mighty Salomon Brothers, whose "Big Swinging Dicks" were lampooned in Tom Wolfe's The Bonfire of the Vanities and Michael Lewis's Liar's Poker. The following year, Travelers and Citicorp agreed a US$70 billion merger to form Citigroup. The deal was so significant that Weill and his counterpart at Citicorp, John Reed, jubilantly called Bill Clinton to tell him before the news broke.
To outside observers, 65-year-old Weill and his 42-year-old apprentice were on top of the world. Inside Citigroup, however, a bitter row was brewing. Weill was uncomfortable with the praise his protégé was attracting and angered by what he perceived as Dimon's refusal to help promote Weill's daughter, who worked for the company. After a disastrous five-day retreat at a luxury resort in West Virginia, during which Dimon squared up to one of Weill's lieutenants, Weill went nuclear and fired him.
Dimon was deeply shocked. In the aftermath, he talked of Shakespeare's Earl of Kent, the courtier who tried to speak sense to a crazed King Lear. Some who know him think the experience informed his approach to protecting his own position — and to firing others, given the galvanising effect it ultimately had on his career. "Don't underestimate the impact Sandy Weill had on him," says a former colleague. "It's almost like, 'I've had this great, successful career because I got fired by Sandy Weill, so let me do the same service to you — you're fired, now go find a bank to run.' "
At the time, though, the abrupt exit from Citigroup was very much not in Dimon's game plan. Dimon's paternal grandfather, Panos Papademetriou, was a Greek who fled to New York after the outbreak of the Greco-Turkish War in 1919. Papademetriou, who changed his name to the French-sounding Dimon, ended up working as a stockbroker for Shearson Hammill — also where Dimon's father, Theodore, started his career. Dimon enjoyed a comfortable upbringing. The family lived in Jackson Heights, Queens, moving to Park Avenue in New York's Upper East Side when Dimon was 12. Along with his two brothers he attended Browning, a fee-paying boys' school. Dimon, occasionally nicknamed Mad Dog, went on to Tufts University near Boston, where he wrote a paper analysing the merger of Shearson Hammill with Weill's acquisition vehicle, Hayden Stone. Dimon's parents knew Weill, and his mother gave him the paper. That led to a summer internship for Dimon with Weill.
Then came Harvard. Dimon impressed fellow students by challenging teachers and wooing Judy Kent, whom classmate Jeffrey Immelt — the future chairman of GE — described as "by far the best-looking, sexiest and smartest girl in the class".
By the time they graduated, they were engaged (they are still married, with three daughters and six granddaughters). Dimon turned down job offers from Goldman Sachs, Lehman Brothers and Morgan Stanley to work as Weill's bag carrier at American Express.
After the great schism of 1998 Dimon took time out to read and travel. He received all manner of approaches, including from Jeff Bezos, who was in the foothills of building Amazon. So his comeback gig surprised most analysts: in 2000, he was unveiled as chief executive of Bank One, a struggling lender in Chicago. Dimon bashed it into shape, cutting costs and laying off staff. In 2004 he sold out to JP Morgan Chase, becoming JP Morgan's chief executive in the process.
Dimon found the institution in an unhappy state. Gentlemanly JP Morgan, founded as Drexel, Morgan & Co in 1871, had dominated America's railroad industry. It had helped bail out the US Treasury in 1893 and the New York Stock Exchange — and New York itself — in 1907. By the end of 2000, though, its grandest days seemed behind it, and JP Morgan was subsumed into scrappy Chase Manhattan.
A senior JP Morgan insider who was there before the Bank One purchase says that in 2004, "there was no culture and we were a whole bunch of different parts and they were all fighting with each other".
He says: "Jamie jokes that the hardest thing about merging Bank One with JP Morgan Chase was merging Chase and JP Morgan. He says they were never properly integrated, and it's true. I mean, I had a bank account at Chase in New York and my card didn't work with the Chase ATM in Texas because that was Texas Commerce Bank. So the first thing Jamie did was all that hard work."
Another former insider marvels at how ruthlessly Dimon dispatched senior executives. "Jamie pulled out a revolver and basically said, 'You're gone, you're in, you're gone, you're in,' and in three weeks the whole Bank One merger was done," he says. For some long-suffering staff, the decisiveness was a relief. One, who had joined in the late 1990s, says: "There were probably two reactions when he arrived. People like me found him incredibly refreshing and fun to watch, because I was flabbergasted about how this animal — the merger of Chase and JP Morgan — was ever going to work. He was no-bullshit, absolutely direct. For other people in the establishment, he was sacrilegious. He didn't take anything as the law. And because he had been given full power, he had enough time to impose his character at the top."
The Jamie Dimon era had begun.
On the evening of March 13, 2008, JP Morgan's executive chairman was celebrating his 52nd birthday at Avra, a Greek restaurant in New York, with his wife, his parents and his eldest daughter, Julia. For months a sense of crisis had been building on Wall Street over defaults in the subprime housing market and the way they were filtering through to the banks that sliced and diced the mortgages into exotic financial products. A phone call at 7pm brought home to Dimon how serious it had become.
Alan Schwartz, head of the investment bank Bear Stearns, told Dimon it was in trouble. The previous summer, two Bear hedge funds exposed to subprime loans had blown up, and in December the bank had posted its first ever quarterly loss, driven by $1.9 billion of write-downs. Dimon asked how much Schwartz needed. "As much as $30 billion," Schwartz said. "Well, the answer to that one is easy," Dimon replied, according to journalist Duff McDonald's biography of Dimon, Last Man Standing. "No."
But Dimon was interested. Bear Stearns's distinctive octagonal headquarters at 383 Madison Avenue, coveted by JP Morgan, was worth US$1 billion alone. Dimon's birthday was on Thursday. By Sunday night JP Morgan had agreed to "rescue" Bear at a bargain-basement price of US$2 a share — a 99 per cent discount to its record high 14 months earlier — in a deal partially underwritten by the US Federal Reserve. The price later had to be bumped to US$10 a share, or about US$1.2 billion, to see off a rebellion from angry Bear shareholders.
JP Morgan was strongly encouraged to do the deal by the US government, which wanted to stem the chaos spreading through the financial system. So Dimon was furious when Barack Obama's administration slapped it with billions of dollars of fines for Bear mortgages a few years later. He said he had done the government a "favour" and was noncommittal about whether he would do it again.
In the run-up to the crisis JP Morgan had taken flak from analysts for using a lower-risk model than most of its rivals. Now it was reaping the rewards. Dimon was the golden boy in the eyes of US Treasury secretary Hank Paulson and Timothy Geithner, president of the New York Fed.
A former colleague says: "We were worried about Morgan Stanley going under, Goldman Sachs going under, and Paulson and Geithner were talking to Jamie every day about JP Morgan being the vehicle to buy out the US financial system because all these markets were imploding … He would get calls from Paulson and Geithner and others, and they would say, 'Jamie, tell us what's going on.' He always knew."
In September 2008, ten days after Lehman Brothers collapsed, JP Morgan followed its Bear acquisition by swooping on Washington Mutual, known as WaMu. The Seattle-based institution called itself "the bank for everyday people". JP Morgan's shareholders were having a far better crash than most bank investors, and Dimon was a rare financier welcome in Washington.
In 2009 The New York Times called him "President Obama's favourite banker". (The truth was more nuanced: Obama often found Dimon's straight-talking style abrasive, while Dimon could grow frustrated by his inability to get results with Obama.) But Dimon's fellow Wall Street bosses weren't happy. Some accused him of abusing JP Morgan's strength by demanding extra collateral for loans to other banks and pulling credit lines. "Jamie lost a tremendous amount of respect from his peers for how he treated people," one says. "It was clear that he played fast and loose with the power of being JP Morgan and a clearing bank."
JP Morgan rejects this narrative. "We ended up buying freakin' Bear and WaMu at the worst time to help the system and it ended up saving other banks," says a source close to Dimon. "We played hardball with banks that were profiteering from the crisis and we also had to watch our balance sheet and not do anything stupid. But at the same time, we lent tens of billions of dollars out."
The dealmaking continued. Having previously acquired 50 per cent of Cazenove, the British merchant bank that was broker to swathes of the FTSE 100, JP Morgan bought the other half in 2010. Someone who was involved in the integration watched with admiration as Dimon applied his charm. "He's a proper New Yorker," he says. "One time, I was in the lift with my secretary and he got in.
Two days later there's a big party in London and there's a sort of receiving line. She goes, 'He won't remember me', but he goes, 'Oh, you're so-and-so from the lift,' and remembers her name. Things like that make a difference. And he's got a motto, which is 'return every phone call and every email, every day'."
By 2012 Dimon seemed untouchable. That made the London Whale scandal all the more damaging. It emerged that JP Morgan's chief investment office, supposedly the most conservative part of the bank, had been taking increasingly speculative bets to make money. One trader, Bruno Iksil, had amassed huge derivatives positions that disrupted the thinly traded markets he worked in — earning him the nicknames London Whale and Voldemort ("he who must not be named" in the Harry Potter books). Hedge funds, scenting blood, started to attack. Iksil's trades collapsed, costing JP Morgan at least US$6.2 billion and triggering investigations in the US and UK. Dimon was contrite, and Ina Drew, chief investment officer, left her job.
The affair tarnished Dimon and led to calls for him to relinquish the role of chairman. He fended off that push but former insiders say the normally cocksure Dimon was badly shaken by the episode. "He was sitting there going from 'I'm on top of the world' to looking over a precipice," says one. "And I think that created, perhaps for the first time, a degree of insecurity."
There have been plenty of mistakes at JP Morgan over the past 16 years. Despite moving $8 trillion around the world every day — or perhaps because of it (banks make fees processing transactions) — JP Morgan has missed the boom in frictionless payments ridden by tech companies such as PayPal, Stripe and Square. It was heavily enmeshed in the WeWork disaster, being an investor in the hyped co-working venture, a lender to both the company and its messianic founder, Adam Neumann, and underwriter of its failed 2019 stock market float. There was the European Super League debacle, for which Dimon apologised, saying the bank "kind of missed" the significance of fans' opinions.
But succession planning — or the lack of it — is Dimon's real Achilles' heel. Some of those who have been pushed out feel sanguine about it. Others don't. Bill Winters, who was co-head of the investment bank, reportedly felt he'd been "shot in the back of the head" when he was fired down the phone.
A senior insider argues that none of the leavers would have been capable of running an organisation as complex as JP Morgan and points out they have all gone on to run smaller banks. Daniel Pinto, the chief operating officer, would run JP Morgan were Dimon to go under a bus tomorrow. Marianne Lake and Jennifer Piepszak, joint heads of JP Morgan's consumer bank, are longer-term contenders among others. Yet it is not clear that any has the necessary clout and skills to succeed Dimon permanently.
The board, ultimately run by Dimon, has little power to compel its executive chairman to think more proactively about the post-Dimon era. "A board review of the strategy of JP Morgan Chase is a cocktail party at his apartment," remarks a former colleague. The departure last year of Lee Raymond, the former ExxonMobil chief executive who was a JP Morgan non-executive director for 33 years, removed a heavyweight counterbalance.
Dimon often jokes that retirement is always five years away. The president of Wall Street looks set to stay in power for the foreseeable future. He has shown a remarkable knack for winning — and keeping on winning. But the former colleague observes: "At some point, Jamie has got to focus on not extending his contract by another five years but truly finding a successor that can take the bank forwards. The last chapter of a successful CEO has to be finding a successor. And I don't think he's even begun to set that up yet."
Written by: Oliver Shah
© The Times of London
