So how did Jamie Dimon do?
As with most things, it depends on the person you ask. Some thought Dimon’s brash attitude got in the way of his testimony Wednesday in front of the Senate Banking Committee. “Dimon has come off too much like a know-it-all,” wrote David Weidner at MarketWatch. “His inner confidence and cockiness have come to the surface.” But others thought the JPMorgan CEO’s performance was impressive. “I wanna know who taught Jamie #Dimon to handle crisis communication. He's admitting fault, answering directly, not taking things personally,” wrote CNBC technology correspondent Jon Fortt on Twitter.
Others noted he’s at least done more than most banking CEOs have. Austan Goolsbee, the former chairman of President Obama’s Council of Economic Advisors, tweeted that “Dimon has apologized and expressed remorse for this 2b mistake. And that exceeds what all bank CEOs combined did re: the financial crisis.”
And when it comes to crisis communications, a performance that’s relatively good may be good enough. As JPMorgan’s leader, Dimon’s job was to show real contrition over the trading debacle, explain what he had done and will do to try to keep it from happening again, protect his shareholders from divulging too much information, and not forget who was in charge in the room. As Michele Davis, a partner at the communications firm Brunswick and a former public affairs official at the Treasury Department, told The Wall Street Journal: “The biggest thing for CEOS to realize [in Senate committee testimony] is they are not the star of the show. It’s the senators’ show. It’s all about them scoring the points they need to score.”
Dimon did the first three fairly well, saying in his prepared remarks that the situation was “embarrassing” and that “we have let a lot of people down, and we are sorry for it.” During questioning, he admitted “the buck stops with me” and that he was “dead wrong” about statements he’d made about the costly trades being “a tempest in a teapot.” He outlined the personnel moves that had been made, the risk-model changes that had taken place as a result of the huge losses, and the review the bank was undergoing.
While he would not say specifically which executives’ pay would be “clawed back” for playing a role in the trading mess, he did say it would likely happen. And of course, time after time, he was either granted reprieve by the senators from answering questions that could give away proprietary information — Sen. Richard Shelby even offered to make the hearing a closed-door session — or politely refused to answer questions that would do so.
How well he was at letting the senators run their show, however, was debatable. There were tense exchanges between Dimon and both Sen. Robert Menendez (D-N.J.), who asked whether the bank’s infamous trade morphed into “Russian roulette,” and Sen. Jeff Merkley (D-Ore.), who reminded the CEO when he attempted to interrupt Merkley that "Sir, this is not your hearing." The two sparred about a Bloomberg report that said Dimon could have spotted the trouble earlier: “I don’t believe everything I read, and I hope you don’t either,” Dimon told Merkley.
But plenty of senators, particularly Republicans, didn’t seem to want to make it “their show,” choosing instead to applaud Dimon or beseech his financial wisdom. Some skipped the topic of the day entirely, asking his advice about subjects such as the crisis in the Eurozone or how to fix the financial system. Others were downright effusive with praise. “You are rightfully known as one of the best,” Sen. Bob Corker (R-Tenn.) told Dimon. Sen. Jim DeMint (R-S.C.) went so far as to say “we can hardly sit in judgment of you losing $2 billion when we lose $2 billion every day.” With questions and comments like that, it wasn’t hard for Dimon to let the senators score all the points they wanted.
My own opinion is that Dimon’s performance Wednesday matters far less than how he leads the company going forward. When the review comes out, how aggressively will he make systematic changes to limit the chances of something like this ever happening again? How will he change the way he manages on a day-to-day basis so that he’s not the victim of what Harvard Business School professor Max Bazerman calls “bounded awareness,” or the “human tendency to fail to perceive and process important information that is easily available to us?” And how well will the board follow through with Dimon’s expectations for clawbacks in executive compensation, and will Dimon’s pay also get docked for the sizable losses?
Of course, if you really want to know what people thought of Dimon’s performance on the Hill, there is one pretty incontrovertible way of measuring it: the market. At midday, JPMorgan’s shares were among the top gainers on Wall Street Wednesday, rising more than 3 percent shortly after the testimony ended.
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