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JPMorgan (NYSE: JPM) CEO Jamie Dimon Can Wallow in $23 Million

By , Contributing Writer, Money Morning •

JPMorgan (NYSE: JPM) CEO Jamie Dimon continued his apology and damage control roadshow Tuesday when he addressed shareholders at the bank's annual meeting.

Even amidst regrets over the massive $2 billion trading loss, the merciful bunch of investors approved Dimon's $23 million pay package.

The repentant Dimon briefly addressed the group after the meeting began, requesting forgiveness.

"This should never have happened. I can't justify it. Unfortunately these mistakes were self-inflicted," Dimon admitted.

According to preliminary votes, an overwhelming 91.5% of shareholders approved Dimon's $23 million in salary and bonus for his 2011 performance, the same amount the 56-year-old CEO received in 2010.

Good news considering the Justice Department has started a probe into the $2 billion trading loss at JPMorgan, The Wall Street Journal reported. With few details about the investigation, The Journal noted that the inquiry has yet to zero in on what legal infractions may have been committed.

Nell Minow, co-owner and board member of research firm GMI Ratings, told Bloomberg News that the majority of votes regarding compensation and other topics were most likely cast before the loss was announced.

"I don't think that the vote will be indicative of shareholder concerns on this issue. It's unusual to have such shocking and bad news come in after most of the votes have been cast," Minow said.

Dimon, no doubt anxious to exit from the piercing eyes of concerned shareholders, moved the meeting along quickly, with the official assembly lasting just shy of an hour.

But Dimon left the pow-wow only to be greeted by a crowd of protesters, making its presence loud and clear with signs that criticized the $2 billion loss as well as the bank's actions in the housing market.

CEO Jamie Dimon Addresses Loss

The $2 billion loss stemmed from trades that were originally designed to hedge against risk. But those hedged trades ballooned in size and complexity, raising questions about whether the bank's dicey exploits violated the Volcker Rule.

Passed in response to the financial crisis, the rule aims to ensure that banks don't engage in risky trades for their own profit, often referred to as proprietary or in-house trading.

Even as Dimon acted contrite about the enormous losses, he let shareholders know that he believes it is important for the bank to continue to be able to hedge against risk. He added that he recognizes the need for rules that ensure hedging doesn't transform into something different.

"What this hedge morphed into violated our own principles in terms of complexities and risk," Dimon said.

Shareholders also cast votes on a series of proposals regarding political contributions, controversial investments in Sudan, and the contentious appointment of an independent chairman, which would take some control away from Dimon.

Shareholders split on this idea, with early results showing only 40% support the proposal.

Final votes will be filed with the U.S. Securities and Exchange Commission, but the discussions and probes will continue.

The biggest U.S. bank by assets also awarded former Chief Investment Officer Ina Drew, who resigned Monday amid the trading fallout, a very generous $14 million in salary and bonus-not a bad parting gift.

Dimon commented Monday, "Despite our recent losses in the CIO, Ina's vast contributions to our company should not be overshadowed by these events."

But the company is considering reclaiming some of her stock awards.

JPMorgan (NYSE: JPM) Stock: A "Buy"?

Money Morning Capital Waves Strategist Shah Gilani wrote that the trades that caused the losses were not done carelessly even though they were "chances."

"The whole thing, the whole "chance" thing doesn't have anything to do with chance. Things happen for a reason," said Gilani.

Gilani notes that before all is said and done, these hedged trades will probably cost JPMorgan another $1 billion-$3 billion to wind down.

But, Gilani wrote, "As far as JPM losing a few billion, it's nickel and dime in the big picture of their earnings clout. Actually, I think the stock is close to a "buy" here. I'm thinking about taking on some JPM stock and adding to it, as it might drop another 10% to 20%."

JPMorgan's share price has dropped more than 14% over the previous five trading sessions. Tuesday afternoon shares gained some back, rising about 3% to $36.88, not too far from its 52-week high. JPM closed up 1.29% to $36.25.

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