by Adam Hartung | Jul 13, 2016 | Employment, Leadership, Regulations, Trends
This week Starbucks and JPMorganChase announced they were raising the minimum pay of many hourly employees. For about 168,000 lowly paid employees, this is really good news. And both companies played up the planned pay increases as benefitting not only the employees, but society at large. The JPMC CEO, Jamie Dimon, went so far as to say this was a response to a national tragedy of low pay and insufficient skills training now being addressed by the enormous bank.
However, both actions look a lot more like reacting to undeniable trends in an effort to simply keep their organizations functioning than any sort of corporate altruism.
Since 2014 there has been an undeniable trend toward raising the minimum wage, now set nationally at $7.25. Fourteen states actually raised their minimum wage starting in 2016 (Massachusetts, California, New York, Nebraska, Connecticut, Michigan, Hawaii, Colorado, Nebraska, Vermont, West Virginia, South Dakota, Rhode Island and Alaska.) Two other states have ongoing increases making them among the states with fastest growing minimum wages (Maryland and Minnesota.) And there are 4 additional states that promoters of a $15 minimum wage think will likely pass within months (Illinois, New Jersey, Oregon and Washington.) That makes 20 states raising the minimum wage, with 46.4% of the U.S. population. And they include 5 of the largest cities in the USA that have already mandated a $15 minimum wage (New York, Washington D.C., Seattle, San Francisco and Los Angeles.)
In other words, the minimum wage is going up. And decisively so in heavily populated states with big cities where Starbucks and JPMC have lots of employees. And the jigsaw puzzle of different state requirements is actually a threat to any sort of corporate compensation plan that would attempt to treat employees equally for common work. Simultaneously the unemployment rate keeps dropping – now below 5% – causing it to take longer to fill open positions than at any time in the last 15+ years. Simply put, to meet local laws, find and retain decent employees, and have any sort of equitable compensation across regions both companies had no choice but to take action to raise the pay for these bottom-level jobs.
Starbucks pointed out that this will increase pay by 5-15% for its 150,000 employees. But at least 8.5% of those employees had already signed a petition demanding higher pay. Time will tell if this raise is enough to keep the stores open and the coffee hot. However, the price increases announced the very next day will probably be more meaningful for the long term revenues and profits at Starbucks than this pay raise.
At JPMC the average pay increase is about $4.10/hour – from $10.15 to $12-$16.50/hour. Across all 18,000 affected employees, this comes to about $153.5million of incremental cost. Heck, the total payroll of these 18,000 employees is only $533.5M (after raises.) Let’s compare that to a few other costs at JPMC:
Wow, compared to these one-off instances, the recent pay raises seem almost immaterial. While there is probably great sincerity on the part of these CEOs for improving the well being of their employees, and society, the money here really isn’t going to make any difference to larger issues. For example, the JPMC CEO’s 2015 pay of $27M is about the same as 900 of these lowly paid employees. Thus the impact on the bank’s financials, and the impact on income inequality, is — well — let’s say we have at least added one drop to the bucket.
The good news is that both companies realize they cannot fight trends. So they are taking actions to help shore up employment. That will serve them well competitively. And some folks are getting a long-desired pay raise. But neither action is going to address the real problems of income inequality.
by Adam Hartung | Jun 22, 2015 | Current Affairs, Defend & Extend, Lock-in
The Economic Policy Institute issued its most recent report on CEO pay yesterday, and the title makes the point clearly “Top CEOs Make 300 Times More than Typical Workers.” CEOs of the 350 largest US public companies now average $16,300,000 in compensation, while typical workers average about $53,000.
Actually, it is kind of remarkable that this stat keeps grabbing attention. The 300 multiple has been around since 1998. The gap actually peaked in 2000 at almost 376. There has been whipsawing, but it has averaged right around 300 for 15 years.
The big change happened in the 1990s. In 1965 the multiple was 20, and by 1978 it had risen only to 30. The next decade, going into 1990 saw the multiple rise to 60. But then from 1990 to 2000 it jumped from 60 to well over 300 – where it has averaged since. So it was long ago that large company CEO pay made its huge gains, and it such compensation has now become the norm.
But this does rile some folks. After all, when a hired CEO makes more in a single workday (based on 5 day week) than the worker does in an entire year, justification does become a bit difficult. And when we recognize that this has happened in just one generation it is a sea change.
If average workers are angry, and some investors are angry, and politicians are increasingly speaking negatively about the topic why does CEO pay remain so high?
Reason 1 – Because they can
CEOs are like kings. They aren’t elected to their position, they are appointed. Usually after several years of grueling internecine political warfare, back-stabbing colleagues and gerrymandering the organization. Once in the position, they pretty much get to set their own pay.
Who can change the pay? Ostensibly the Board of Directors. But who makes up most Boards? CEOs (and former CEOs). It doesn’t do any Board member’s reputation any good with his peers to try and cut CEO pay. You certainly don’t want your objection to “Joe’s” pay coming up when its time to set your pay.
Honestly, if you could set your own pay what would it be? I reckon most folks would take as much as they could get.
Reason 2 – the Lake Wobegon effect
NPR (National Public Radio) broadcasts a show about a fictional, rural Minnesota town called Lake Wobegon where “the women are strong, the men are good-looking, and all of the children are above average.”
Nice joke, until you apply it to CEOs. The top 350 CEOs are accomplished individuals. Which 175 are above average, and which 175 are below average? Honestly, how does a Board judge? Who has the ability to determine if a specific CEO is above average, or below average?
So when the “average” CEO pay is announced, any CEO would be expected to go to the Board, tell them the published average and ask “well, don’t you think I’ve done a great job? Don’t you think I’m above average? If so, then shouldn’t I be compensated at some percentage greater than average?”
Repeat this process 350 times, every year, and you can see how large company CEO pay keeps going up. And data in the EPI report supports this. Those who have the greatest pay increase are the 20% who are paid the lowest. The group with the second greatest pay increase are the 20% in the next to lowest paid quintile. These lower paid CEOs say “shouldn’t I be paid at least average – if not more?”
The Board agrees to this logic, since they think the CEO is doing a good job (otherwise they would fire him.) So they step up his, or her, pay. This then pushes up the average. And every year this process is repeated, pushing pay higher and higher and higher.
Oh, and if you replace a CEO then the new person certainly is not going to take the job for below-average compensation. They are expected to do great things, so they must be brought in with compensation that is up toward the top. The recruiters will assure the Board that finding the right CEO is challenging, and they must “pay up” to obtain the “right talent.” Again, driving up the average.
Reason 3 – It’s a “King’s Court”
Today’s large corporations hire consultants to evaluate CEO performance, and design “pay for performance” compensation packages. These are then reviewed by external lawyers for their legality. And by investment bankers for their acceptability to investors. These outside parties render opinions as to the CEO’s performance, and pay package, and overall pay given.
Unfortunately, these folks are hired by the CEO and his Board to render these opinions. Meaning, the person they judge is the one who pays them. Not the employees, not a company union, not an investor group and not government regulators. They are hired and paid by the people they are judging.
Thus, this becomes something akin to an old fashioned King’s Court. Who is in the Boardroom that gains if they object to the CEO pay package? If the CEO selects the Board (and they do, because investors, employees and regulators certainly don’t) and then they collectively hire an outside expert, does anyone in the room want that expert to say the CEO is overpaid?
If they say the CEO is overpaid, how do they benefit? Can you think of even one way? However, if they do take this action – say out of conscious, morality, historical comparisons or just obstreperousness – they risk being asked to not do future evaluations. And, even worse, such an opinion by these experts places their clients (the CEO and Board) at risk of shareholder lawsuits for not fulfilling their fiduciary responsibility. That’s what one would call a “lose/lose.”
And, let’s not forget, that even if you think a CEO is overpaid by $10million or $20million, it is still a rounding error in the profitability of these 350 large companies. Financially, to the future of the organization, it really does not matter. Of all the issues a Board discusses, this one is the least important to earnings per share. When the Board is considering the risks that could keep them up at night (cybersecurity, technology failure, patent infringement, compliance failure, etc.) overpaying the CEO is not “up the list.”
The famed newsman Robert Krulwich identified executive compensation as an issue in the 1980s. He pointed out that there were no “brakes” on executive compensation. There is no outside body that could actually influence CEO pay. He predicted that it would rise dramatically. He was right.
The only apparent brake would be government regulation. But that is a tough sell. Do Americans want Congress, or government bureaucrats, determining compensation for anyone? Americans can’t even hardly agree on a whether there should be a minimum wage at all, much less where it should be set. Rancor against executive compensation may be high, but it is a firecracker compared to the atomic bomb that would be detonated should the government involve itself in setting executive pay.
Not to mention that since the Supreme Court ruling in the case of Citizens United made it possible for companies to invest heavily in elections, it would be hard to imagine how much company money large company CEOs would spend on lobbying to make sure no such regulation was ever passed.
How far can CEO pay rise? We recently learned that Jamie Dimon, CEO of JPMorganChase, has amassed a net worth of $1.1B. It increasingly looks like there may not be a limit.
by Adam Hartung | Jan 24, 2014 | Current Affairs, In the Swamp, Leadership
JPMorganChase Board of Directors this week voted to double CEO Jamie Dimon’s pay to something north of $20million. That he received such a big raise after the bank was forced to pay out more than $20B in fines for illegal activity has raised a number of eyebrows among analysts and shareholders. That he is receiving this raise after the bank laid off some 7,5000 employees in 2013, and recently announced it would not give employees raises due to the large fines, shows a distinct callousness toward employees, while raising questions about company leadership.
The Wall Street Journal reported that there was a lot of Board discourse about CEO Dimon’s pay package. But in the byzantine world of large company governance, apparently the Board felt compelled to pay Mr. Dimon tremendously well in order to send a message to Washington that the Board thought the regulators were wrong in pursuing malfeasance at JPMC. A show of support for the CEO who claimed this week he felt the bank had been treated unfairly.
Did that last paragraph leave you a bit confused? Because the logic, to be honest, is far from straightforward. The Board of a troubled bank with long-term leadership issues creating billions in trading losses and billions in fines for illegal behavior decided to withhold employee pay raises but double the CEO compensation in order to snub the nose of the regulators who have been pointing out years of unethical, if not illegal, behavior? The same regulators who might well see this very action as a good reason to heighten their investigations?
I’m not trying to oversimply the complexities of corporate governance, but this is some pretty tortured logic. When so many things have gone wrong, and it can be traced to leadership, rewarding that leader handsomely has the clear appearance of supporting his behavior, while punishing employees for the results of that leader’s actions.
Mr. Dimon is a media darling, and has been most of his career. He has also been outspoken on many issues during his career, drawing the attention of friends and foes. He is unabashed in his opinions, and even when he’s dead wrong – as when he referred to massive London trading losses as “a tempest in a teapot” he always speaks with total confidence. Mr. Dimon shows complete faith in his ability to be smarter than everyone else, and complete faith in his decisions, and he has no problem making sure everyone is fully aware of his absolute trust in himself.
But people are able to see trends. Although his defenders would like to say that the fines were related to issues which predated Mr. Dimon’s leadership, there are clear markers that differ. For example, it was the desperate search for higher profits under Mr. Dimon which led to the creation of the London trading desk, and giving it lattitude for big bets, that created some $7B in losses. Mr. Dimon’s final reaction was akin to “we make mistakes. Sorry. Time to move on.”
Oh yeah, and he fired the employees while claiming no personal responsibility.
And in January we learned that the bank was paying a $2.6B fine for aiding and abetting the ponzi scheme operated by Mr. Bernie Madoff. This behavior was something which had gone on for decades, without any oversight or reporting at the bank. This had continued while Mr. Dimon was CEO.
Why did these things happen? Because there was a huge desire to make more money.
Mr. Dimon is known for being as blunt with executives and employees as he is with the media. His “take no prisoners” style has been seen as crippling by many. Mr. Dimon focuses on results, and he is known for being brutal when he doesn’t receive the results he wants. For executives and employees that created a culture where delivering results to Mr. Dimon was paramount. And if that required taking big risks, or looking the other way about troubling behavior, well, people did what they had to do to make things happen at JPMC. If you had to bend the rules, or look the other way, to get results that was better than having to deal with the wrath of Mr. Dimon.
“The person at the top” sets the tone by which the organization behaves. And the more we learn about JPMC the more we see a company where the CEO loves to flash his POTUS cufflinks at the Congress and press, claim he’s taking the high road, and blame employees or predecessors when things go wrong. And that’s not a healthy environment.
Across the river from Wall Street Chris Christie, Governor of New Jersey, has become embroiled in controversy. His staff created an enormous traffic debacle in Fort Lee as retaliation against a mayor who did not support the Governor’s re-election bid. Mr. Christie fired the staffer, and claimed he knew nothing about it. But the majority of people in New Jersey aren’t buying the Governer’s ignorance.
Instead most Americans see a negative pattern in the governor’s behavior. His “take no prisoners” attitude has created accomplishments, but simultaneously he’s shown he thinks its OK to take off the gloves and fight bare knuckle – and not stop before taking some pretty sketchy shots at people in his quest to come out on top. Now regulators are digging even deeper to see if his bullying behavior set the stage for problems, even if he didn’t do the dastardly deed himself. And, as for governance, it will be up to voters to decide if Mr. Christie’s leadership is what they want, or not.
But at JPMC the governance is up to the Board. And this Board is, unfortunately, controlled by Mr. Dimon. He is not just CEO, but also Chairman of the Board. He holds the “bully gavel” when it comes to Board matters. He is able to set the agenda, and control the data the Board receives. He is able to call the Board members, and strong arm them to see things his way. Although it is clear the bank would benefit from a seperation of the roles of CEO and Chairman, Mr. Dimon has stopped this from happening. And the big winner has been – Mr. Dimon.
The signal this sends for JPMC employees, customers and investors is not good. While the stock is up some 22% the last year, governance and the CEO should have a long-term vision and not be influenced by short-term price changes. In the case of JPMC the culture appears to be one where seeking results is primary. Even if it leads to taking inordinate risks (which can create huge losses,) or taking and supporting questionable clients (Bernie Madoff,) or operating on the edge of financial industry legality. And if things go wrong – look for a scapegoat. Primarily someone below you who you can blame, while you claim you either didn’t know about it or didn’t support their behavior.
At JPMC the important question now is less about CEO pay and more about governance. The Board clearly has lost its ability to control a CEO + Chairman able to push his will, even when the logic of some actions appears hard to follow. The Board should be addressing who should be the Chairman, what should be the strategy, is the bank doing the right things, are the right compliance tools in place, and then – after all of that – is compensation being set correctly. That Mr. Dimon received such an undeserved raise simply points to much bigger problems in governance – and raises questions about the future of JPMC.
by Adam Hartung | Dec 19, 2013 | Current Affairs, Leadership
Everyone has a stake in America’s big, public corporations. Either as an investor, employee, customer, supplier or community leader. So how these corporations perform is a big deal for all of us.
Unfortunately, we’ve had all too many corporations that have their problems. But, amazingly, we see little change in the CEO, or CEO compensation. When one of the USA‘s largest employers, McDonald’s, uses its hotline to tell low-paid employees they should avoid breaking open Christmas gift boxes, and instead return gifts for cash to buy gas and groceries, it’s not a bad idea to take a look at top executive pay. And with so many people still looking for work, and unemployment for people under 25 at something like 15%, there is an ongoing question as to whether CEOs are being held accountable or simply granted their jobs regardless of performance.
Given that Scrooge was a banker, why not start by looking at bank CEOs? And who better to glance at than the ultra-high profile Jamie Dimon, CEO and Chairman of JPMorganChase.
In 2012 Mr. Dimon told us there were really no problems in the JPMC derivatives business. We later learned that – oops – the unit did actually lose something like $6billion. Mr. Dimon was nice enough to admit this was more than a “templest in a teapot,” and eventually apoligized. He asked us to all realize that JPMC is really big, and mistakes will happen. Just forget about it and move on he recommended.
But in 2013 the regulators said “not so fast” and fined JPMC close to $1billion for failure to properly safeguard the public interest. The Board felt compelled to reflect on this misadventure and cut Mr. Dimon’s pay in half to a paltry $18.7million. That means in the year when things went $7billion wrong, he was paid nearly $37million – and the penalty was to subsequently receive only $19million. Thus his total compensation for 2 years, during which $7billion evaporated from the bank, was (roughly) $50M.
It appears unlikely anyone will be returning gifts to buy ham and beans in the Dimon household this year.
Mr. Dimon was spanked by the Board, and he is no longer the most highly paid CEO in the banking industry. That 2013 title goes to Wells Fargo CEO John Stumpf, who received about $23M. Wells Fargo is still sorting out the mess from all those bad mortgages which have left millions of Americans with foreclosures, bankruptcies, costly short-sales and mortgages greater than the home value. But, hotlines are now in place and things are getting better!
CEO compensation is interesting because it is all relative. Pay is minimally salary – never more than $1M (although that alone is a really big number to most people.) Bonuses make up most of the compensation,based on relative metrics tied to comparisons with industry peers. So, if an industry does badly and every company does poorly the CEOs still get paid their bonuses. You don’t have to be a Steve Jobs or Jeff Bezos with new insights, lots of growth, great products and margins to be paid a lot. Just don’t do a whole lot worse than some peer group you are compared against.
Which then brings us to the whole idea of why CEOs that make big mistakes – like the whopper at JPMC – so easily keep their jobs. Would a McDonald’s cashier that missed handing out change by $7 (1 one-billionth the JPMC mistake) likely be paid well – or fired? What about a JPMC bank teller? Yet, even when things go terribly wrong we rarely see a CEO lose their job.
During this shopping season, just look at Sears. Ed Lampert cut his pay to $1 in 2013. Hooray! But this did not help the company.
Sears and Kmart business is so bad CEO Lampert changed strategy in 2013 to selling profitable stores rather than more lawn mowers and hand tools in order to keep the company alive. Yet, as more employees leave, suppliers risk being repaid, communities lose their stores and retail jobs and tax base, Mr. Lampert remains Sears Holdings CEO. We accept that because he owns so much stock he has the “right” to remain CEO.
Perhaps Mr. Lampert deserves a visit from his own personal Jacob Marley, who might make him realize that there is more to life (and business) than counting cash flow and seeking lower cost financing options. Mr. Lampert can arise each morning before dawn to browbeat employees via conference webinars, and micromanage a losing business. But it leaves him sounding a lot like Scrooge. Meanwhile those behaviors have not stopped Sears and KMart from losing all market relevancy, and spiraling toward failure.
CEO pay-to-worker ratios have increased 1,000% since 1950. (How’s that for a “relative” metric?) Today the average CEO makes 200 times the company’s workforce (the top 100 make 300 times as much – and the CEO of Wal-Mart has a pension 6,182 times that of the average employee.) Is it any wonder so many investors, employees, customers, suppliers and community leaders are paying so much attention to CEO performance – and pay?
We are all thankful for the good CEO that develops long-range plans, spends time investing in growth projects, developing employees, increasing revenue and margins while expanding the communities in which the company lives and works. It just doesn’t happen often enough.
This Christmas, as many before, as we look at our portfolios, paychecks, pensions, product quality, service quality and communities too many of us wish far too often for better CEOs, and compensation really aligned with long-term performance for all constituencies.
by Adam Hartung | Jul 17, 2012 | Current Affairs, Defend & Extend, In the Swamp, Leadership, Lock-in
Most investors shouldn't be. Given demands of work and family, there is almost no time to study companies, markets and select investments. So smaller investors rely on 3rd parties, who rarely perform better than the most common indeces, such as the S&P 500 or Dow Jones Industrial Average. For that reason, few small investors make more than 5-10% per year on their money, and since 2000 many would beg for that much return!
Most investors would make more money with their available time by studying prices on the web and simply buying bargains where they could save more than 10% on their purchase. The satisfaction of a well priced computer, piece of furniture, nice suit or pair of shoes is far more gratifying than earning 2-4% on your investment, while worrying about whether you might LOSE 10-20-30%, or more!
And that's why you don't want to own JPMorganChase (JPMC.) Last week's earning's call was a remarkable example of boredom. Yes, Chairman and CEO Jamie Dimon and his team spent considerable time explaining how the London investment office lost $6B, and why they felt it was an "accident" that would not happen again. But the truth is that this $6B "mistake" wasn't really all that big a deal, compared to the $100B in mortgage and credit card losses since the financial crisis started!
Perhaps Mr. Dimon was right, given JPMC's size, that the whole experience was mostly "a tempest in a teapot." Throughout the call the CEO kept emphasizing that JPMC was "going to go about the business of deposits and lending that is the 'core' business for the bank." Although known for outspokenness, Mr. Dimon sounded like any other bank CEO saying "things happen, but trust us. We really are conservative."
So if a $6B surprise loss isn't that big a deal, what is important to shareholders of JPMC?
How about the unlikelihood of JPMC earning any sort of decent return for the next decade, or two?
The world has changed. But this call, and the mountain of powerpoint slides and documents put out with it, reiterated just how little JPMC (and most of its competition, honestly) has not. In this global world of network relationships, digital transactions, struggling home values and upside down mortgages, and very slow economic growth in developed countries, JPMC has no idea what "the next big thing" will be that could make its investors a 20-30% rate of return.
Yes, in many traditional product lines return-on-equity is in the upper teens or even over 20%. But, then there are losses in others. So lots of trade-offs. Ho-hum. To seek growth JPMC is opening more branches (ho-hum). And trying to sign up more credit card customers (ho-hum) and make more smalll-business loans (ho-hum) while running ads and hoping to accumulate more deposit acounts (ho-hum.) And they have cut compensation and other non-interest costs 12% (ho-hum.)
You could have listened to this call in the 1980s, or 1990s, and it would have sounded the same.
Only the world isn't at all the same.
And Mr. Dimon, and his team, knew this. That's why JPMC created the Chief Investment Office (CIO) in London, and the synthetic credit portfolio that has caused such a stir. The old success formula, despite the bailout which created these highly concentrated, huge banks, simply doesn't have much growth – in revenues or profits. So to jack up returns the bank created an extremely complex business unit that made bets – big bets – sometimes HUGE bets – on interest rates and securities it did not own.
These bets allowed small sums (like, say, $1B) to potentially earn multiples on the investment. Or, lose multiples. And the bets were all based on forecasts about future events – using a computer model created by the CIO's office. As Mr. Dimon's team eloquently pointed out, this model became very complicated, and as reality varied from forecast nobody at JPMC was all that clear why the losses started to happen. As they kept using the model, losses mounted. Oops.
But now, we are to be very assured that JPMC's leaders are paying a lot more attention to the model, and thus JPMC isn't going to have such variations between forecast and reality. So this event won't happen again.
Right.
If JPMC didn't need to use the highly complicated world of derivatives to potentially jack up its returns it would have closed the CIO before these losses happened. Now they claim to have closed the synthetic trading portfolio, but not the CIO. Think about that, if you had a unit operated by one of your very top leaders that "made a mistake" and lost $6B wouldn't you closing it? You would only keep it open if you felt like you had to.
Anybody out there remember the failure of Long Term Capital Management (LTCM?) Certainly Mr. Dimon does. In the 1990s LTCM was the most famous "hedge fund" of its day. The "model" used at Long Term Capital supposedly had zero risk, but extremely high returns. Until a $4B loss created by the default of Russion bonds wiped out all the bank's reserves and capital.
Let's see, what's the big news these days? Oh yeah, possible bond defaults in Greece, Portugal, Spain, Ireland……
The recent "crisis" at JPMC reflects a company locked-in to an antiquated business model which has no growth and declining returns. In order to prop up returns the bank took on almost unquantifiable additional risk, through its hedging operation. Even though hedging long had a risky history, and some spectacular failures.
But this was the only way JPMC knew how to boost returns, so it did it anyway. In an almost off-hand comment Mr. Dimon remarked a capable executive fired CIO Ina Drew was. And that she was credited with "saving the bank" by some of Mr. Dimon's fellow executives. Most likely her money-losing, high risk efforts were another attempt by Ms. Drew to "save the bank's returns" and thus why she was lauded even after losing $6B.
But no more. Now the bank is just going to slog it out being the boring bank it used to be. Amidst all the slides and documents there was NO explanation of what JPMC was going to do next to create growth. So JPMC is still susceptible to crisis – from debt defaults, Euro crisis, no growth economies, etc. – but shows little, if any, upside growth.
And that's why you don't want to invest in JPMC. For the last 3 years the stock has swung wildly. Big swings are loved by betting stock traders. But quarter to quarter vicissitudes are not helpful for investors who need growth so they can generate a 50% gain in 5 years when they need the money for junior's college tuition.
For that matter, I can't think of any "money center" bank worth investing. All of them have the same problem. After being "saved" they are less likely to behave differently than ever before. At JPMC leadership took bets in derivatives trying to jack up returns. At Barclay's Bank it appears leadership manipulated a key lending rate (LIBOR.) All actions typical of executives that are stuck in a lousy market, that is shifting away from them, and feeling it necessary to push the envelope in an effort to squeek out higher returns.
If you feel compelled to invest in financial services, look outside the traditional institutions. Consider Virgin, where Virgin Money is behaving uniquely – and could create incredible growth with very high returns. In a business no "traditional" bank is pursuing. Or Discover Financial Services which is using a unique on-line approach to deposits and lending. Although these are nothing like JPMC, they offer opportunity for growth with probably less risk of another future crisis.
