West vs East Banker Pay Comparison: JPM's Jamie Dimon: $23,000,000; ICBC's Jiang Jianqing: $308,000

Tyler Durden's picture

Everyone knows that China is different than the US, but one area in which little is known about just how vast the difference is, is banker pay. Which is why the following comparison may come as a surprise. According to Bloomberg, the difference between pay for Jamie Dimon, head of the US' largest bank JPM, and Jiang Jianqing, head of ICBC - the world's most profitable bank, is simply stunning. Last year, Jamie - the head of the bank ensnared in everything from Liborgate, to the London whale fiasco, to MF Global client fund "confiscation", got paid $23 million. His Chinese counterpart? A tiny $308,000. This translated into $1.21 million for every $1 billion in profit for the JP Morganite, and $9,400 for the same profit for the ICBC head: a nearly 130x differential! Perhaps it is time shareholders of US financial companies demanded the same kinds of pay-for-performance metrics as those already in place in China.

Some other considerations via Bloomberg:

That pay-to-performance gap is set to widen this year. The state-controlled Chinese lender, led by Chairman Jiang Jianqing, may post second-quarter net income of $9.63 billion on Aug. 30, while Bank of China Ltd. will probably report $5.44 billion tomorrow, according to analysts’ estimates. New York-based JPMorgan last month reported a 9 percent decline to $4.96 billion following its trading loss in London.

 

Pay hasn’t kept pace with earnings in China, where government-appointed bankers have escaped the ire directed at overseas rivals for losing money on complex derivatives, money laundering or rigging rates. Still, the banks’ shares remain weighed down by concern that slowing economic growth will trigger defaults by developers and local governments.

 

“Chinese banks are risk averse due to culture, a different executive compensation structure” and the profitability of their lending operations, said Himanshu Shah, chief investment officer of Shah Capital Management in Raleigh, North Carolina. However, the banks are changing and will “resemble their Western counterparts to a great extent over the next five years.”

Great: all the world needs is a bank so big it can hold not just America, but the entire world hostage.

Ironically, Chinese banks, just like America's are no strangers to bailouts:

China’s top bankers have escaped the tarnish of such scandals in recent years. The state-run lenders were transformed from almost insolvent institutions with spiraling defaults a decade ago with the help of more than $650 billion in bailouts. The four largest banks, all based in Beijing, went on to raise a combined $64.5 billion through first-time share sales starting in 2005 and now rank among the seven biggest by market value in the world.

In other words, Chinese banks did precisely what US banks should have done - be run as utilities, with modest executive pay, while taking advantage of a soaring market to recapitalize and become self-sustaining. Sadly, western banks did just the opposite.

How do some other banks compare?

Dimon, who is both chairman and chief executive officer of JPMorgan, was awarded total 2011 compensation of $23 million, including a salary, bonus and stock options. The 56-year-old was the highest-paid banker among 50 CEOs at the largest U.S.-based financial companies, according to the Finance 50 annual ranking by Bloomberg Markets.

 

In the U.K., HSBC Holdings Plc said it would pay CEO Stuart Gulliver, 53, as much as 13.3 million pounds ($21 million) including long-term bonuses for last year, making him Britain’s best-paid banking chief. Local rival Barclays Plc awarded Bob Diamond, 61, as much as 12.5 million pounds.

Oddly enough, massive comp does not appear to be a primary need for the Chinese bank CEO:

Jiang’s annual compensation has stagnated in the last two years, the bank’s annual reports showed. China’s largest lender has frozen salaries for management this year, the 21st Century Business Herald newspaper reported May 29, citing people it didn’t identify. ICBC press official Wang Zhenning declined to comment.

 

Construction Bank, the world’s second-largest lender by profit, may post a 10 percent gain in net income on Aug. 26 to 50 billion yuan, according to the analysts’ estimates. Pay for its chairman has varied, dipping to 1.57 million yuan in 2008 before climbing to as much as 1.83 million yuan in 2010.

There is however a twist:

The executives aren’t motivated by their salaries because “they are more concerned about their career path as a government official,” said Oliver Rui, a professor of finance and accounting at the China Europe International Business School in Shanghai. “They are half professional, half politician.”

That sounds like a fair exchange - if US bankers demand to be paid the exorbitant compensation they have received in the past, can they please stay out of politics at least? And that includes bribes, and other forms of lobbying.

A complete list of who got paid what in China, is available here

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GetZeeGold's picture

 

 

Lack of incentive....can you really blame them?

 

bnbdnb's picture

I need to see $30b salaries to inspire me.

malikai's picture

It might be a good time to consider outsourcing bank executive jobs to China.

Fukushima Sam's picture

For a proper analysis we also need a comparison between NY and Beijing prices for high-end hookers, trophy wives, and good cocaine.

Precious's picture

If Jamie Dimon was in China, he would be currently occupying the prisoner kidney-donor ward.

dbomb12's picture

When hyperinflation kicks in i doubt he get any additional bonus or pay raise, Then that pay scale will be appropiate for that low life scumbag

Rusticus's picture

But, but ... "if we don't pay record bonuses the talent will go somewhere else" ... tho  clearly not to China.

saturn's picture

Let those talents go to Mars.

Chief KnocAHoma's picture

Come on.... this isn't even a fair comparison... I mean after all... Dimon is white.

AnAnonymous's picture

Dimon is an Indo European but also an 'American'.

Article reports that 'Americanism' is pushing in Chinese banks and the 'american' normality should be hit in 5 years.

Quite a good reason for many chinese to push for 'Americanism'

'Americanism' is spreading in China.

akak's picture

 

'Americanism' is spreading in China.

Insanitation is spreading in the warped and bigoted mind of AnAnonymousAsshole.

TN Jed's picture

Not to mention that picture of him looks like Alfred E. Neuman.  You can almost hear, "What, me worry?"

Bahamas's picture

White as...hhhmm...askenazi white

Monedas's picture

We have firemen who make more than Jiang .... he's underpaid !

Whoa Dammit's picture

Jamie gets the big bucks because he can magically vaporize customer funds from completely unaffiliated brokerage firms and keep that cash as a JPM asset. 

Chinese CEO bankers can't compete with Dimon because the Chinese people have an intense rope fetish when it comes to banksters who cheat them.

thefedisscam's picture

The U.S. will be Bankrupt BEFORE ICBC is in default!

pepperspray's picture

Cufflinks differential--

Quinvarius's picture

They must base it on how much money you lose.

GetZeeGold's picture

 

 

Jamie wins again......give that boy a raise.....and have him go on a vacation.

 

I'm serious...the last conference call cost us a freakin fortune!

 

Temporalist's picture

Corzine's severance package from Muppet Fleecing Gulag was worth $12.1 million.

Jason T's picture

Wasn't that how is was in the US 50 years ago?  Substantially lower pay of our execs.   

dwayne elizando's picture

Well maybe chinese bankers should take a class on how to properly rape their country from Jamie Dimon.

jayman21's picture

 

 

 

Lesson One - Create a central bank that sounds like the people own it.  Make sure you own it but say it must remain secret or the central bank cannot do its job.

Lesson Two - Make sure you own or have influence on the media.  They will be useful to herd the slaves into bad trades.  There is always a sucker.  Also useful to keep the herd distracted from the banking game.

Lesson Three - Make sure your version of history is being taught.  This sounds long term but it does pay off.  Make sure to leave out that the run from 1932-1937 was one of the largest bull runs in the history of the markets.  This one got away from us.

Lesson Four - Make sure you hire from a few Universities and pay the people handsomely.  Have professors make bullshit studies to keep the herds in check.  They think these people are smart.

Lesson Five -Make sure you set up spender of last resort so you can continue to make loans out of thin air.  The herd might take breaks.  It is documented through out history.  Federal gov't are always eager to be spender of last resort.  The herd will pay the interest with taxes.

Lesson Six - Laugh all the way to the bank.  It is good to be king.

buzzsaw99's picture

it's only clownbux

shovelhead's picture

Yabut,

See how happy Jaime looks compared to Jiang.

Priceless.

Disenchanted's picture

 

 

No matter how much more Jaime makes in 'clownbux', he's still just an employee...as is Jiang.

Disenchanted's picture

 

 

LOL! Would one of you -5 folks care to prove how I'm wrong?

 

Does stating the fact that Dimon is just an employee ruin his future scapegoat value?

The bottom line is, even though he might act the bigshot Jaime does as he's told.

New American Revolution's picture

In the 1600 and 1700's, Jamie and Lloyd would have been hung by the neck... not a bad idea today.

Bazinga's picture

China is the one place where bankers who screw you get executed. Nice approach.

Disenchanted's picture

 

 

Seems like the Asians don't worship their banksters...

 

Vietnamese police arrest top banker - International - Scotsman.com 

 

Vietnamese police have arrested one of the country’s wealthiest banking tycoons for undisclosed financial crimes.

AnAnonymous's picture

It is not like the US did not wage a war on Vietnamese to teach'em 'Americanism'

akak's picture

It is not like the Communist Chineses did not invade Vietnam and wage war on the Vetnamese in 1978 --- and got their butts kicked.

Freewheelin Franklin's picture

A seat on the NY Fed is expensive, these days.

Al Gorerhythm's picture

He gets paid by incentive on how much wealth he is able to skim from the rest of us. 

jayman21's picture

I would have that smile too.  I just took a shit and stole another 2 million dollars:-)

Temporalist's picture

This is not news compared to what is really important:

Tom Cruise and Katie Holmes divorce finalised

http://www.telegraph.co.uk/news/worldnews/northamerica/usa/9491893/Tom-C...

TrustWho's picture

Katie did a number on Tom.

GetZeeGold's picture

 

 

Not all that impressive considering he's batsh!t crazy.

 

caimen garou's picture

jamie getting paid 22,999,999; to much!

tallen's picture

$23,000,000 too much. That's why he's smiling.

malikai's picture

I'd say he's getting paid $250,000,000,000 too much.

TrustWho's picture

When a person needs $23 million to do her job to the best of her abilities, the morality of that society must be questioned.

I understand value based pricing but also appreciate cost based pricing and the value of team work. The Bible documents a code that drives a successful society and a society can ignore this code at its peril. Other religious documents do the same. 

Econmike's picture

I thought we agreed not to believe any Chinese numbers. $308,000 a year, but he's also got about 15 condos in Beijing, his relatives are on the Boards of every SOE, and he has a horde of mistresses.

Chinese don't declare assets under any circumstances. They learned that lesson.

mckee's picture

you had me at horde of mistresses

Monedas's picture

The real question is how high up the Communist hierachy in North Korea/China do you have to be to enjoy all the benefits, perks, freedom and food choices of an average welfare slut in America !    My guess is upper 1 per centile !          "Never underestimate the power of the greed of the poor !".... Monedas    1929         Comedy Jihad Pampered Poor Tour

Econmike's picture

I teach economics at a Chinese high school in Qingdao. We have 24 year old assistants that drive BMW's.