Subject: Re: Greg Abel compensation
Mungofitch:
I would say that there are vanishingly few executives worth more than (say) $5m/year for the work they do in their day jobs. The rest of the pay is because they can get away with it--it's not much per shareholder, everybody else is doing it, and there is a myth that bigger companies need more expensive bosses.

If this came from a lot of people I would just dismiss it as ignorance of things like how rare true management talent is, how easy it is for the "wrong" CEO to reduce corporate returns by billions of dollars, and how economics suggests that ANY scarce resource will have its cost bid up to something approaching the value it enables unless, unlike virtually everything else in the economic world, it is not subject to being bid for.

Coming from Jim, I expect there is at bare minimum a coherent theory that differs from what I daresay is the usual in market driven hiring of CEOs and its moral or immoral basis. I would love to know what that alternative is.

To be clear, I would submit your claim above is that JP Morgan could go out and easily hire someone for $5Million a year which replacement would not reduce the earnings of JP Morgan by even as much as 0.01%. Or that once JP Morgan and accomplished that feat, that this individual would not be offered 10X or even 100X of his $5Million compensation at JPMorgan by other companies to be their CEO.

The 0.01% is not arbitrarily chosen. Dimon's 2024 compensation was about $39 million while JP Morgan earned $58.5 BILLION. So if replacing Dimon with a $5Million dollar CEO reduced earnings to $58.45 Billion or less, it would be a net negative to shareholders.

I am curious, do you actually think there are a bunch of $5Million dollar CEO candidates who would predictably do as well as or better than Jamie Dimon at running JP Morgan? If so, could you comment on which of my assumptions are wrong and why you think that?

Thanks,
R:)