JPMorgan chief investment officer Ina Drew — one of the most powerful women on Wall Street — resigned on May 14 following the bank’s trading loss of at least $2 billion (possibly as much as $5 billion, reports suggest). But though some think high-ranking Wall Street women are more likely to take the fall for major mistakes than men, Drew’s gender doesn’t seem to have much to do with why she’s stepping down. And in fact, her resignation actually just highlights her incredible power and sheer ballsiness.
A female banker who used to work at JPMorgan and knew Drew casually said that while Drew was heavily pressured by those within the bank to resign, she alone made the decision to step down. “Someone had to fall for this, and she was the chief investment officer,” said this banker. “Simple as that. People say there aren’t enough women in power and that women don’t take as much risk as men. She took a lot of risk and ended up looking down the edge of a cliff. Whether she jumped or was pushed will probably not be known for a long time, but it looks like she was trying to jump for a few weeks.” (Drew reportedly offered her resignation multiple times following the losses.)
Yet some wonder if Drew’s much more famous boss, JPMorgan CEO and chairman Jamie Dimon, is shouldering enough of the blame. Pressure mounted on Drew to step down following an early evening conference call on May 10, in which Dimon spoke to reporters, investors and analysts about what he called “egregious” trading missteps that sent the bank into a tailspin. (The share price dropped 6 percent in after-hours trading on May 10, with around $13 billion of the bank’s value depleted by the next day.)
Drew was one of Dimon’s closest advisers — a former member of the bank’s operating committee, she was also one of its most handsomely paid executives, making $15.5 million in 2011, and almost $16 million the year before, according to public proxy filings.
Meanwhile, Drew’s boss Jamie Dimon has been one of the most vocal opponents to further regulation of the financial industry, while also wielding massive amounts of power from his seat on the advisory board of the Federal Reserve Bank of New York. After Dimon was interviewed on Meet the Press, U.S. Senate candidate from Massachusetts Elizabeth Warren — the former head of the Consumer Protection Bureau — called for him to step down from Fed position. (Warren has pushed hard for banking reform and oversaw the Trouble Asset Relief Program [TARP].) Others have gone a step further, arguing that Dimon should quit along with Drew.
“It’s always hard to know if [any] of these people know the kind of risk they’re taking on. Even the London Whale” — Bruno Iksil, the British trader who is largely responsible for the screw-up and is set to resign — “may not have known, or wanted to believe he could hedge it or unwind it without this sort of catastrophe,” said a New York-based trader. “But if it were anyone else but Jamie Dimon, there would be even more pressure for him to leave.”
During a shareholders’ meeting on May 15, Dimon said that so-called “clawbacks” — the repossessing of bonuses — for those affiliated with the losses are being considered. This means Drew and others’ hefty compensation packages from last year could be taken away as further punishment. Dimon, however, is likely keeping his $23 million earned last year, as 94.8 percent of the board gave an OK to his pay.
“Because he was so out in front with his beliefs on increased regulation, his mea culpas are a little much for some people to handle,” said a banker at a competing bank.
Drew has yet to do an interview regarding her resignation and role, leaving her former boss to do the talking. By the look of things, more admissions of fault may be imminent as the bank continues in full damage control mode. And while more resignations could follow, Drew’s wasn’t necessarily unfair.