Elizabeth Hester’s article (JPMorgan’s Dimon Says He Won’t Recruit Rivals’ Staff) published in Bloomberg on October 27, 2009 shares that Jamie Dimon, JPMorgan’s CEO has gallantly stated that “…he won’t actively recruit the best employees from competitors operating under pay restrictions imposed after federal bailouts.” Hester quotes Dimon as saying “ “I morally have an issue with people going against those companies that are hamstrung… It’s wrong to say, ‘Let’s go hire the best people.’ We’re not going to do that.” Other than wondering how Messers Jeffries (formerly of Citigroup and now of JPMogan) and Rifkin (formerly of Merrill Lynch and now of JPMorgan) felt about that last statement, we also wonder if anything can be read between the lines of Dimon’s proclamation.
Under Dimon’s leadership, JP Morgan now among best performing of the big banks in the U.S. Dimon, the darling of the Obama administration for his business management and communications skills, is clearly supporting the Federal Reserve’s efforts to reduce and manage bank executives’ pay by saying he is “hands off” (or at least passive) when it comes to recruiting talent from the TARP recipient organizations. Given that the argument most often posed by the TARP companies in the face of the Pay Czar’s plans to reduce compensation is: “If we don’t pay we will lose our best talent”, Dimon’s comments are particularly well timed from the administration’s viewpoint.
But let’s also remember that JPMorgan completed two major acquisitions in 2008 – Bear Sterns and Washington Mutual. Yet, because the bank is in the process of absorbing the physical and people assets acquired from these enormous organizations, it likely Dimon already has more senior talent than he needs to move JPM aggressively into the next decade. Because Dimon may not need to add to his executive team, he may be using this platform to send a clear message to his own people that the talent pool is big enough to run the bank, while simultaneously attempting to dampen the financial impact that talent raids might have on overall industry pay levels, including (obviously) those at JPM.
It is also possible that the TARP companies don’t have any key talent remaining that Dimon wants to secure for JPMorgan. Using the examples of Jeffries and Rifkin, it appears that Dimon has already hired the talent he wants from the troubled banks and his hands off statement could be seen as the verbal equivalent of closing the barn door after the horses have bolted.
Finally Dimon may be concerned that as the economy and the financial services industry continues its recovery, that other organizations may attempt to recruit talent from JPMorgan. Thus, Dimon may be floating a trial balloon in an attempt to declare a truce in the war for talent, at least for now.
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