Finance

Wall Street’s banking icon | World Finance

After 16 years at the helm of the United States’ biggest bank, trillion-dollar giant JPMorgan Chase, Jamie Dimon is not afraid to speak his mind. Everything from bitcoin (“I personally think that bitcoin is worthless,” he said in 2021) to the Chinese government (“The Communist Party is celebrating its 100th year. So is JPMorgan. And I’ll make you a bet we last longer,” he said at an event in Hong Kong) is fair game in his mind. His forthright comments have occasionally landed him in hot water – he had to apologise for his comment about China, for instance – but Dimon’s penchant for plain speaking has earned him more fans than enemies. Indeed, he was described in the New York Times Magazine in 2010 as “America’s least-hated banker.” Today, the view still holds true.

“With apologies to Brian Moynihan [the CEO of Bank of America] and Charlie Scharf [the CEO of Wells Fargo], among others, Jamie Dimon may be the most respected US bank CEO, known for his candour, charisma and self-confidence,” James Shanahan, senior equity research analyst at Edward Jones told World Finance. Having now earned the title of the longest-serving CEO on Wall Street, World Finance looks back on the iconic banker’s career.

A budding banker
Born in Queens in New York City in 1956, Dimon was the grandson of a Greek immigrant who worked as a stockbroker in the city. His father followed in his grandfather’s footsteps, also becoming a stockbroker, and Dimon’s own financial career began to take shape after his graduation from Harvard Business School in 1982, where he was described as “one of the very brightest guys in finance” in his class by a professor in BusinessWeek magazine in 1996. One of the first signs of Dimon’s confidence in his career path materialised soon after his graduation, when he turned down a job at Goldman Sachs, where he had previously held an internship. Instead, he opted to work with Sandy Weill, a family friend who would go on to become a pivotal mentor to Dimon. Weill offered Dimon an assistant position at American Express, and in 1995 he told the New York Times, “After a week, he was telling me how we could do things better.”

Dimon and Weill stuck together throughout the coming years, and in 1986 when Weill took control of Commercial Credit Company, Dimon joined him to help build a banking empire. Although it was a small business at the time, under the combined efforts of Weill and Dimon and through a series of mergers and acquisitions, the business went on to become Citigroup, now one of the largest banks in the US – and indeed the world. Dimon was a key member of the team, taking roles as chief financial officer, executive vice president and later as president. However, as Dimon strived to achieve more, the partnership between he and Weill that had once been so fruitful came under strain. In 1998, Weill made the shock decision of firing Dimon from Citigroup.


A crossroads moment
Following the split with Weill, Dimon took a break from the financial services industry. He looked into other lines of work, thought about what career paths would make him happy and considered how stepping away from leadership positions in the banking industry would allow him to spend more time with his family. But he couldn’t stay away from Wall Street for long. Although he had contemplated other careers, he told Money magazine, “My craft is financial services. Right or wrong, that’s what I know, and I’m pretty good at it.”

Dimon returned to the financial industry as chairman and CEO of Bank One, the fifth-largest bank in the country at the time. Bank One was reeling from a number of management mistakes – not to mention a $511m net loss – when Dimon was brought on board in 2000. It also had a serious culture problem following a merger from which the two separate sides had never fully integrated.

Known for his detail-orientated approach, Dimon led a review of the business’s portfolio, and Bank One embarked on an intensive clean-up mission, involving cutting the company’s dividend, slashing bonuses – Dimon’s included – and weeding out weaker members of the team. Not long after he had steadied the ship at Bank One, Dimon steered it straight into a merger with JPMorgan Chase, with the ambition of creating a true global banking giant, the likes of which only Weill’s Citigroup could compare. In some ways, the deal seemed too good to be true. JPMorgan Chase’s prowess in corporate banking and Bank One’s consumer financial services experience were a perfect match. Yet ever the conservative, Dimon still hesitated before greenlighting the merger. “It’s terrifying. Do you push the button or not?” he told Fortune. “But if you don’t and this opportunity is gone when you want it later, you’ve made a horrible mistake. So I pushed the button.” In 2006, Dimon succeeded William Harrison as CEO of the combined business.

Building a banking giant
Since joining JPMorgan Chase, Dimon has ramped up value for the bank’s shareholders. The bank’s share price has grown by around 200 percent since Dimon became CEO of the business, while its annual net income has risen from $13.6bn, on revenue of $61.4bn in 2006, to the eye-watering $48.3bn in net income on revenue of $125.3bn recorded in 2021. The business is now the US’s largest credit card issuer, with more than 4,800 branches operating in 60 countries, and it holds nearly $1trn more in assets than its closest competitor.

In his latest letter to shareholders, Dimon credited the business’s “financial discipline, constant investment in innovation and ongoing development of our people” with enabling it to “persevere in our steadfast dedication to help clients, communities and countries throughout the world.” Dimon also praised the business for growing its market share and making investments in products, people and technology “all while maintaining credit discipline and a fortress balance sheet.”

Throughout his career, Dimon has been known to take a closer approach to the running of his bank than his peers do. He is known for interrogating his executives with lists of questions, digging into the weeds of the business’s balance sheet and never missing a detail. “Dimon has shown a knack for spotting risks and opportunities, and by responding boldly. In recent years, for example, there has been aggressive growth in the formation of financial technology companies (or fintechs), which have directly targeted JPMorgan, especially in the areas of payments and wealth management,” Shanahan told World Finance. “Dimon has made a number of acquisitions over the past couple of years to address the threats head-on.” Just a few of these acquisitions in recent years include the purchase of OpenInvest, a California-based provider of values-based financial solutions, and Nutmeg, a UK-based digital wealth manager, in 2021, and stakes in Viva Wallet, a European cloud-based payments company, and C6 Bank, a Brazilian digital bank.

Recent deals have also opened new lines of business for the bank, such as its acquisition of corporate luxury travel agency Frosch and its purchase of The Infatuation, an app that helps consumers choose local eateries in cities around the world.

Hard lessons
But it hasn’t always been smooth sailing for Dimon. Although JPMorgan Chase dodged the worst of the 2008 financial crash, thanks to its ‘fortress balance sheet,’ the business wasn’t immune to the fallout – in the two years following the crash, Chase lost a whopping $51bn in faulty mortgages, unpaid credit cards and other bad loans – and a hostile sentiment towards bankers began to seed itself in American culture.

The London Whale saga, when a single trader lost the bank at least $6.2bn in 2012, following which JPMorgan Chase was fined more than $1bn and forced to admit violating securities law, has been called by Dimon “the stupidest and most embarrassing situation I have ever been a part of.” In the business’s annual letter in 2013, Dimon apologised for the situation, which had also involved a very public takedown by a US Senate subcommittee, and he took a 50 percent pay cut that year. “For a company that prides itself on risk management, this was a real kick in the teeth.”

Dimon continued, writing: “We learned – or were painfully reminded of – hard lessons from the London Whale problem. I know we will always make mistakes – that is unavoidable. What we continually strive for is to keep those mistakes small and infrequent. I certainly hope the London Whale is the largest mistake I am ever a part of.”

Dimon has been on a personal mission to improve the image of bankers, becoming the face of the industry and a driver of positive change

Although it will likely be his biggest blunder, the London Whale scandal hasn’t been Dimon’s only public misstep. He was also deeply involved with the failed initial public offering (IPO) of co-working space WeWork in 2019 – an event which Fortune magazine described as “one of corporate America’s most spectacular meltdowns,” and in which nearly $40bn of value evaporated overnight. WeWork’s fall from grace ensnared Jamie Dimon, whose company had backed the firm through its investment funds, arranged loans for founder Adam Neumann and acted as lead bank on the disastrous IPO attempt.

Yet even here, Dimon worked quickly to clean up his mess. It was Dimon who convinced Neumann to step down as CEO after the failed listing. “He told me, ‘Adam, you have done a great job until now but you will have to put the company first,’” Neumann told the Wall Street Journal. “I trusted Jamie and I looked up to Jamie. I still do.” Dimon also said he had learned lessons from the failure personally. “There are a lot of lessons to be learned, by everybody involved, and I’ve learned a few myself,” he said in an interview with CNBC. He said having “proper corporate governance” and an independent board before filing to go public were key lessons.

Even more recently, Dimon suffered a public rebuke when shareholders voted to reject a special $52.6m stock option award that the bank’s directors had given him to stay on as CEO of the business for five more years. Although Dimon will keep the award as the vote was merely a formality, it represented an important test of investors’ changing attitudes towards executive pay. In fact, over the last 12 years, JPMorgan Chase shareholders have voted their approval of compensation eight times.

Despite these missteps, JPMorgan Chase has often stood head and shoulders above its competitors thanks in large part to Dimon’s leadership. Even when the 2008 global financial crash hit, the business remained profitable every quarter. What’s more, Dimon has been on a personal mission to improve the image of bankers, becoming the face of the industry and a driver of positive change.

A force for good
Over the decades that Dimon has worked in leadership positions at JPMorgan Chase, Bank One and other titans of the financial services world, the expectations of what chief executives can and should do for their wider communities has changed dramatically. This change has not only been taken up by Dimon, but it has partly been led by his own hand. For example, in 2019 Dimon helped lead an influential corporate group of nearly 200 chief executives to agree on a new meaning of ‘the purpose of a corporation.’

As chair of the Business Roundtable, Dimon helped shape a new definition from the lobbying group, transforming the original mission statement, which was centred on answering to stockholders, to one that was more focused on ‘conscious capitalism,’ a recognition gaining steam in corporate America that businesses have responsibilities to society as well as shareholders. “The American dream is alive, but fraying,” Dimon said in a press release from the Business Roundtable. “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term.

These modernised principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.” The 181 chief executives that signed the statement agreed to commit to delivering value to customers, investing in employees, dealing ethically with suppliers, supporting the communities in which they work and, finally, generating long-term value for shareholders.

Dimon has always had a knack for seeing the bigger picture, and this has certainly been evident in his work to build a strong team in the financial services sector. “He has demonstrated an exceptional ability to identify and develop talent, as evidenced by the routine appointments of JP Morgan’s senior executives to leadership roles among the company’s largest competitors,” Shanahan told World Finance. JPMorgan Chase has also been a leader in supporting women in its business – as well as in wider society. In 2013, the business created a programme called Women on the Move that would support female employees as well as businesses owned by women. Another key aim was to support women in achieving better financial health.

For a corporate leader as high up the ranks as Dimon to be grounded by the everyday realities of their customers is rare, but it is a sentiment Dimon often embodies. In his 2021 shareholder letter, Dimon stressed the impact that JPMorgan Chase has on everyday people. “While JPMorgan Chase stock is owned by large institutions, pension plans, mutual funds and directly by individual investors, in almost all cases, the ultimate beneficiaries are individuals in our communities. More than 100 million people in the US own stock, and a large percentage of these individuals, in one way or another, own JPMorgan Chase stock,” he wrote. “Many of these people are veterans, teachers, police officers, firefighters, healthcare workers, retirees or those saving for a home, education or retirement. Your management team goes to work every day recognising the enormous responsibility that we have to our shareholders.”

The next challenge
Dimon has done much over the past two decades to influence corporate America, the banking sector and the boardroom at the industry’s biggest bank – in most instances, changing ways for the better. But how will he deal with the new barrage of challenges facing the global economy? Not only is the US still reeling from the impact of the COVID-19 pandemic, but inflation is running rampant thanks to a multitude of economic challenges. The clouds appear to be gathering over the economy.

In his latest shareholder letter, Dimon cited “challenges at every turn: a pandemic, unprecedented government actions, a strong recovery after a sharp and deep global recession, a highly polarised US election, mounting inflation, a war in Ukraine and dramatic economic sanctions against Russia.”

He continued, recognising the unique position the US is currently in: “Adding to the disruption, these events are unfolding while America remains divided within its borders, with many arguing that it has lost its essential leadership role outside of its borders and around the world.” He called for individuals to work together across private and public sectors. “JPMorgan Chase, a company that has historically worked across borders and boundaries, will do its part to ensure the global economy is safe and secure,” he wrote. The letter reads at times as if it were written by a politician rather than a corporate leader – does this offer a sign of where Dimon’s career could lead next? His name has been rumoured as a potential choice for the US Treasury secretary since 2009, under presidents Obama, Trump and Biden. While he has said he “never coveted the job,” his popular appeal will mean he remains relevant long after he steps down as JPMorgan Chase’s CEO.

Yet after several threats of leaving the business, Dimon is dedicated to another term of five years at the helm of JPMorgan Chase, so the industry can bank on his steadying influence and iconic leadership style, with one eye always trained on the next crisis, through whatever comes next.

Indeed, looking back to Dimon’s 2013 annual statement, published following the London Whale scandal, an insight into the chief executive’s mindset is offered. “In prior annual reports, we told you we cannot promise you results but that we do promise you, among other things, consistent effort and integrity,” he wrote at the time. “In that spirit – I make this promise: We will be a port of safety in the next storm.”



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