JPMorgan Chase (NYSE: JPM) Chairman and Chief Executive Jamie Dimon thinks outrage over bonuses being paid to executives of firms involved in the financial crisis and now receiving federal assistance is not entirely justified.
In his keynote speech to the "Future Of New York" conference sponsored by Crain's New York, Dimon took issue with President Obama's characterization of bonuses and the way they have been paid out.
Dimon said that although bonuses have been very large, sizable portions are paid in stock, with strict rules on when that stock can be sold. He said an employer wants to support the best people on the payroll, and the quality of an employee is not always based on performance.
Although he suggested the president should not be pointing a finger at the financial community, Dimon acknowledged that banks are to blame for the crisis, with too much leverage, too many products, and bad underwriting.
Banks, he said, did not cause the troubles experienced by American International Group (NYSE: AIG), the collapse in monoline credit, the woes of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), or the poor regulation of the mortgage business.
He pointed to recent positive developments as signs that the credit markets are recovering, saying his own bank did several high-yield deals in the last month, and he expressed confidence in the abilities of Treasury Secretary Tim Geithner and top economic adviser Larry Summers to do what needs to be done.
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