Jamie Dimon isn’t letting the backlash against bonuses and expensive perks slow him down. ABC News is reporting that JP Morgan Chase is planning to go head with the plan to buy two new luxury corporate jets and build a fancy new hanger at Westchester Airport.
The price tag for the jets and the “premeire corporate hanger” will be $138 million, almost as much as the AIG bonuses that caused such an uproar.
- $120 million for two Gulfstream 650 planes, described by the manufacturer as the fastest, widest and most comfortable private jets ever made.
- $18 million for a lavish renovation of a hangar at the Westchester Airport, just north of New York City.
Dimon may be gambling that the public’s impression that JP Morgan is far healthier than Citigroup—which was forced to give up its own plan to buy jets earlier this year—may mute the populist backlash against this type of spending. JP Morgan has taken $25 billion in TARP money, which it plans to pay off before the bills for the jets and the hanger come due, according to The Deal.
Will the gamble pay off? We’re not sure. Already journalists and good governance types are objecting. JPMorgan already has four private jets at the Westchester airport.
- “It’s a remarkably boneheaded decision,” Nell Minow, the editor and founder of The Corporate Library, a group that provides independent corporate governance research and analysis, tells ABC News. “It’s completely tone deaf.”
- “There’s simply no conceivable way in which these jets represent a necessary and legitimate business expense,” Portfolio’s Felix Salmon writes. “They would have been an extremely lavish and barely-justifiable perk in good times; in bad times, they look like nothing so much as a calculated affront to JP Morgan’s customers.”
- “Let’s not forget the shareholders, who bear the brunt of this kind of corporate spending with little say in it,” Ryan Chittum of Columbia Journalism review writes.
Our opinion is simpler: this is yet another demonstration that there is no good way to run banks partially capitalised with taxpayer funds.