Fired JP Morgan CEO gets $32 million dollars as her severance pay

[Ichingcarpenter]

The bank lost $2 billion, the boss walks off with $32m
May 15, 2012

na Drew, the executive who ran the department behind JP Morgan's $US2 billion trading loss, has left the bank and will walk away with about $US32 million.
The 55-year-old chief investment officer oversaw the division that made bets that JP Morgan has warned could rack up a further $US1 billion in losses.
She will be replaced by Matt Zames, head of fixed income at JP Morgan's investment bank and a former proprietary trader.
One of the best-paid women on Wall Street, Ms Drew last year received a remuneration package worth $US15.5 million.
Corporate filings show that following her resignation she is entitled to $US400,000 in severance as well as a share award that was worth $US16 million yesterday. On top of this, she has unexercised options that were valued at the end of last year at $US3.44 million, a series of retirement benefits worth a further $US2.63 million, and a $US9.87 million deferred compensation pot built up over several years.

Ms Drew, who spent more than 30 years at the bank, is not expected to be the only executive to depart in the wake of a loss that has damaged JP Morgan's reputation for risk management. Achilles Macris, who ran the London division of JP Morgan's chief investment office (CIO), and Javier-Martin-Artajo, a trader who worked in the unit, are also reported to be leaving.
"Despite our recent losses, Ina's vast contributions to the company should not be overshadowed by these events," said Jamie Dimon, the bank's chairman and chief executive.

The pressure on Mr Dimon will be increased on Tuesday at the bank's annual meeting in Tampa, Florida, where shareholders will want to hear a fuller account of what went wrong. The losses, disclosed on Thursday, have already wiped more than $15bn from the bank's market value.
JP Morgan is also parachuting in Mike Cavanagh, who runs the bank's Treasury department, to head up the company's response to the losses. Traders from the investment bank will help unwind the trades that triggered the losses.

Meanwhile, JP Morgan's decision to move its European headquarters from the City to the Docklands development in July will help Canary Wharf overtake the City of London as the heart of the British financial services industry this year, according to figures produced by the Financial Times.
Telegraph, London

http://m.smh.com.au/business/the-bank-lost-2-billion-the-boss-walks-off-with-32m-20120515-1ynwx.html

[HughBeaumont]

1. LEGALIZED. THEFT.

Cronies dictating lottery perk packages of cronies, no matter if they do a good or bad job.

GOD I'm sick of this shit, and Jamie Dimon enables it all.

That 32 mil should be taken from her and distributed among undeserving lower-rung JP workers who are inevitably going to be fired to make up for this loss thanks to her incompetent management. Trust me, she won't be starving.

[Lucky Luciano]

8. Well she did make $3.7B in 2009.

Was at the bank for 30 years - which is a feat in finance. Likely very competent and finally got picked off after very many good years. If she made $10B before this, then...

[leftyohiolib]

2. at least she's not a union thug with a strangling union contract

THAT would be too much

[xchrom]

3. ...

[JHB]

4. G'head, tell me why Eisenhower-era tax rates were such a terrible thing again?

In 1955 there were 24 tax brackets, 20 of which affected incomes over the equivalent of $200,000 after adjusting for inflation. The top bracket (91%) kicked in on income over $3,348,950 (adjusted).

So ~90% of that severance would be subject to the top rate. But then, a tax structure like that would change the entire landscape for executive compensation; it wouldn't be as attractive to simply grab everything you can get.

[tclambert]

5. Well, now that she's lost her job, they wanted to help her find a new job, or go back to school

and maybe learn a new, more marketable skill.

[Wilms]

11. .

[Starry Messenger]

6. The next person who complains about public employee pensions...

Will be getting a copy of this article.

[deutsey]

7. Heavens! However will the poor dear survive?

[valerief]

9. RACKET. And I don't mean tennis. nt

[liberal N proud]

10. Rewarded for being fired for dereliction of duty

What is wrong with a society when get rewarded for being fired?

[jerseyjack]

12. Bank Bets.... heads they win. Tails, taxpayers lose (again).

GLASS-STEIGEL

[progressoid]

13. Sounds about right.

Despicable

[CanonRay]

14. I'll bet she's feeling really chastized for her screwup

Wish I could fuck up and get $32 mil.

[Prometheus Bound]

15. You gotta change that misleading headline.

CIO, not CEO

[Godot51]

16. On a salary...

as a teacher (34 years) of about $40k per annum I'd only* have to work 800 years to make that kind of money.

* Only, he says!

[Godhumor]

17. Her severance was 450,000. The 32 million was already hers.

16 million was unexercised options already given to her, retirement actual and deferred comp. The other half was shares given to her previously that she will now cash (if termination results in immediate vesting).

In this case she is only walking away with a salary severance, everything else was already in her possession. Misleading way to make it sound like she received a massive golden parachute.

And she was the CIO not CEO.

[Lucky Luciano]

18. Yep. nt

[snappyturtle]

19. Nobody. Nobody is worth that sum of money. nt

[FarCenter]

20. CIO, not CEO; and the $32 million is her retirement package, not severance pay.

She started at Chemical Bank before the mergers with Manufacturers Hanover Trust, Chase Manhattan Bank and JP Morgan.

She probably got old, overconfident, and too complacent to monitor the London office closely.

[JHB]

31. Ah, that's it then! Should have given her a massive bonus too...

...to motivate her to pay closer attention.

[BootinUp]

21. incompetence seems to pay.

I knew I was doing something wrong.

[bvar22]

22. Yes, Virginia,

there ARE Two Americas.

[jwirr]

23. I wonder how much of the severance pay some of these people get is hush money to keep them

from telling all?

[Godhumor]

24. Her severance was 450k not 32 million

So it would be a pretty small buy-off in your scenario.

[Bake]

25. Regardless, I'm pretty sure she'll be OK.

Might have to sell one of the multiple houses, but hey, she'll be OK.

Bake

[JHB]

32. Would she still have that money of she were dismissed in some harsher manner?

Depending on the contracts, she might have lost a substantial chunk of that if she had been dismissed for poor performance. If that scenario was relevant, being allowed to simply retire with the full package could have been worth quite a bit.

That's speculation on possibilities, of course, but at this point it would premature to completely disallow it.

[Initech]

26. How in fucking hell is this legal?? It's theft plain and simple.

[grasswire]

27. it's more like $32 million with all her deferred compensation and options

the severance pay of $400,000 is nothing compared to all that other stuff.

There oughta be a clause in those contracts that if the exec is fired for cause, all those options and deferreds are lost.

[Godhumor]

29. Deferred is your money, there would be no way to take that back

Most companies terminate any unvested options after someone leaves, as they are a long term incentive to stay. Those that have already vested are legally hers, though.

[SammyWinstonJack]

30. Yes, especially if fired for mismanagement.

[AlinPA]

28. She was not CEO. Jamie Dimon is JPM's CEO.

[kentuck]

33. How do we know that this $32 million..?

...did not come from the $2 billion that was "lost"?? Do we simply assume it was lost and believe whatever Jamie Dimon says is the truth? Where is the evidence?