by Kyle Colona on June 29, 2012
The splash of the Whale of London belly flop continues to wash through the hallways at JP Morgan Chase, but former CIO Ina Drew isn’t feeling any waves.
As it was reported yesterday, the losses may actually end up being in the ball park of $9 billion (Nine Billion!). As it was previously reported, Ina Drew, who was in charge of the Chief Investment Office in London, has “retired” from the bank.
Retired? Now there’s a word.
Of course the nuance built into her retirement play is that she gets to walk away with a package that is said to be worth about $21.5 million in stock and options. Of course, this was probably what the bank and Ms. Drew had agreed to in her employment contract. And far be it for anyone, whether a pundit, politico or president to intervene in contract law in determining executive compensation.
That being said, a $21.5 million payday in exchange for overseeing a $9 billion (Nine Billion!) loss seems rather odd, no?
But Ina Drew gets to walk away with $17.1 million in unvested restricted shares and about $4.4 million in options that she would have been forced to give back had the bank terminated her employment “with cause,” according to Bloomberg News. If you count accumulated unrestricted shares and pension pay, the total package comes to a hefty $57.5 million.
Of course this begs the question as to whether or not overseeing a $ 9 billion (Nine Billion!) loss is good enough cause for termination.
Some will argue that she had been with the bank for a long time and that she helped to earn the firm a lotto dough during her tenure. But the banking world is a “what have you done for me lately world” and $9 billion (Nine Billion) is a lot of dough, no?
Meanwhile JP Morgan head honcho Jamie Dimon acknowledged in his appearance on Capitol Hill that the huge play in synthetic credit swaps attempted by the Whale of London, Bruno Iksil, “violated common sense.” So, does Ina Drew’s $21.5 million pay day also violate common sense?
Oddly enough, Mr. Dimon could have restricted Drew’s package or “further defer vesting if her performance wasn’t satisfactory,” says Bloomberg. The bank’s employment terms require executives to forfeit unvested restricted stock and options if they are fired “with cause.”
Because Ina Drew was allowed to retire and keep that money, the company probably won’t claw back her bonuses, according to so-called pay specialists. In any case, Ms. Drew is crying all the way to the bank, and it would come as no surprise if Mr. Dimon is soon heard crooning here’s that rainy day too.
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Kyle Colona is a New York-based freelance writer and a Feature Writer for CompliancEX> and the Wall Street Job Report. He has an extensive background in legal and regulatory affairs in the financial services sector and his work has appeared in a variety of print and on-line publications. You can find him on linkedin.