Convenience

Chapter 14:
Basic Elements of Control
4 5 3
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
www.MyEbookNiche.eCrater.com

---

of the executives they were waiting for. Then he called
up each one, asking, “Too good for the subway?” or
“Why don’t you try walking?” Dimon denies the story,
but limo service at J.P. Morgan Chase is way down.
• Dimon also takes a close look at compensation.
Regional bank managers at J.P. Morgan Chase once
earned $2 million a year, compared with Bank One’s
modest salary of $400,000. “I’d tell people they were
way overpaid,” says Dimon, and, as he suspected,
“they already knew it.” He cut pay for most staff by
20 to 50 percent, but most people elected to stay with
the company. Today, a strict pay-for-performance
formula keeps compensation in line.
• “In a big company,” Dimon advises, “it’s easy for
people to BS you. A lot of them have been practicing
for decades.” So he gathers outcome data from every
manager, various forms of information from low-
level staffers, and even candid performance critiques
from suppliers. “If you just want to run your busi-
ness on your own and report results,” warns Steve
Black, co-head of investment banking, “you won’t
like working for Jamie.”
• Finally, Dimon is convinced that IT is critical to the
bank’s long-term strategy and once cancelled a long-
running information-services contract with IBM.
“When you’re outsourcing,” he explained, “… people
don’t care” about your performance. At J.P. Morgan
Chase, “we want patriots, not mercenaries.” Between
2007 and 2008, he invested $2 billion in technology
developed in-house and considers it money well spent.
Dimon, however, doesn’t like being thought of as a
control freak. “It’s offensive … to be called a cost cutter,”
he complains, and besides, his long-run goal isn’t merely
control—it’s growth. “It’s thousand-mile march,” observes
one J.P. Morgan analyst, “and not everyone will survive.”