How has JPMorgan Chase been able to weather a financial crisis that consumed other giants such as Citigroup and Merrill Lynch? The answer is gifted leadership says Patricia Crisafulli, who has authored a new book on Jamie Dimon, JPMorgan’s chief executive, titled “The House of Dimon.”
According to a review of the book by the Wall Street Journal online, Crisafulli says JP Morgan Chase has been skillfully stewarded by a hardcore number cruncher who pays particular attention to risk management. While other CEOs such as Citigroup’s Charles Prince allowed underlings to pile up off-balance sheet structured investment vehicles (SIVs), Mr. Dimon saw the warning signs in advance and gradually began reducing JP Morgan’s exposure to subprime mortgages well before the collapse.
In her book, Crisafulli says Dimon’s style is exactly what shareholders and companies need at a time like this. He works 80-hour weeks fine-tuning the operations of the firm, is constantly communicating with subordinates, is fanatical about cost-cutting and tying executive pay to actual performance, and prudently increased reserves when he was heading up Bank One in preparation for “rainy days.”
In 2004 when Bank One merged with JPMorgan Chase, Dimon became president of the merged entity. He immediately cut country-club memberships, first-class airline tickets, rich outsourcing contracts and more than a handful of jobs as well. The cost-cutting paid off when JPMorgan Chase was able to pick up assets of Bear Sterns in 2008 for $1.2 billion, as well as some of Washington Mutual’s assets on the cheap.
For an in-depth look at Dimon’s history and management style, pick up a copy of “The House of Dimon.”