Jamie Dimon
1956–

President and chief operating officer, J. P. Morgan Chase & Company

Nationality: American.

Born: March 13, 1956, in New York City, New York.

Education: Tufts University, BA, 1978; Harvard Business School, MBA, 1982.

Family: Son of Theodore Dimon (broker) and Themis (maiden name unknown); married Judith Kent; children: three.

Career: Goldman Sachs, 1978, intern; Management Analysis Center, 1978–1980, consultant; American Express Company, 1982–1985, vice president and assistant to the president; Commerical Credit Group, 1986–1989, executive vice president and CFO; 1989–1991, president and CFO; Primerica Corporation, 1991–1993, president and CFO; Smith Barney, 1990–1993, chief administrative officer; 1993–1995, COO; 1996–1997, chairman and CEO; Salomon Smith Barney Holdings, 1997–1998, cochairman and coCEO; Citigroup, 1998, president; Bank One, 2000–2004, chairman and CEO; J. P. Morgan Chase & Company, 2004–, president and COO.

Address: 270 Park Avenue, New York, New York 10017; http://www.jpmorgan.com.

■ In 2004 James Dimon—well known as Jamie—an executive who spent most of his career under the tutelage of Citigroup's Sandy Weill, finally emerged from the tycoon's shadow, doing so as a viable threat to his once revered mentor. The most interesting chapter of Dimon's life remained to be written after he resurrected the struggling midwestern Bank One by cutting costs and administering financial discipline. Effective June 15, 2004, J. P. Morgan Chase & Company acquired Bank One for about $58 billion in stock, forming the second-biggest U.S. bank, with loans and assets of $1.1 trillion. Dimon was expected to succeed the J. P. Morgan chair and CEO William Harrison in 2006.

By 2004 Bank One had become the sixth-largest U.S. bank, with assets of $320 billion. Its businesses, which

spanned the United States and about a dozen other countries, comprised consumer, corporate, and institutional banking; lease financing; investment management; and brokerage, insurance, and consumer finance, including mortgages and student loans. The company had some 1,800 branches in 14 mostly midwestern and southeastern states. Bank One also managed the One Group mutual-fund family and was one of the largest issuers of credit cards in the world, with nearly 52 million cards in circulation and $74 billion in managed receivables. Early in 2004 the company bought most of the business of the U.S.-based Zurich Life from Zurich Financial Services.

A CHILD OF THE INDUSTRY

Dimon's career in the brokerage business seemed preordained by his lineage. His grandfather, a Greek immigrant from Smyrna, was a broker and passed on his knowledge of the business to his son and partner, Theodore Dimon. Jamie Dimon's father and grandfather worked together for 19 years, and Dimon worked summers in their New York office.

SHAPED BY A MENTOR

In 1978 Dimon graduated cum laude from Tufts University. He worked for the Management Analysis Center, a consulting firm in Boston, for several years and then enrolled in Harvard Business School. The Harvard professor Jay O. Light noted in BusinessWeek, "He was generally perceived as one of the very brightest guys in finance in that class" (October 21, 1996).

While a student at Harvard, Dimon interned at Goldman Sachs and was offered a job there after graduation in 1982. He declined, instead going to work for the mentor who would profoundly shape his career: Sandy Weill. The two men had met six years earlier; Weill knew Dimon's father and the two families had formed a close relationship, convening annually for Passover dinners. Dimon's mother gave Weill a copy of the college thesis her son had written about the 1970 merger of the two brokerage firms Shearson Hammill and Hayden Stone—a union engineered by Weill, who had been running Hayden at the time. Impressed, Weill offered Dimon a summer job. Recalled Weill in the New York Times, "After a week he was telling me how we could do things better" (July 13, 1995).

BUILDING FROM THE GROUND UP

From 1982 to 1985 Weill and Dimon teamed up at American Express, where Dimon signed on as vice president and assistant to the president. Dimon's abilities to crunch numbers meshed well with Weill's people skills. When Weill was forced out of American Express, he made Dimon his second in command at the little-known consumer-lending outfit that he bought called Commercial Credit Company. That tiny firm was the beginning of what would eventually become Citigroup; as quoted by the New York Times, when asked about his decision to stay with Weill, Dimon replied, "I love the idea of being in on the ground floor" (July 13, 1995).

RESTRUCTURING AN ULTIMATE WINNER

Dimon was a key member of the team that launched and defined Commercial Credit's strategy. He served as the company's chief financial officer and an executive vice president and then later as president. Through the course of Dimon's time at the firm, Commercial Credit was completely restructured and made numerous acquisitions and divestitures, substantially improving its profitability. The most significant transaction was the 1987 acquisition of Primerica Corporation, which included Smith Barney. Commercial Credit then assumed the Primerica name. In 1983 Primerica had acquired the Travelers Corporation (of which Smith Barney was a part), which had then been renamed Travelers Group. Between 1987 and 1994 the Travelers unit of Primerica touted compound annual growth of 21 percent in per-share earnings—an achievement that executives credited to Dimon's staunch financial discipline.

EMERGING FROM MERGER AFTER MERGER

At Travelers, Dimon was named chairman and CEO of its Smith Barney subsidiary in January 1996, having previously served as COO and chief administrative officer. Dimon's father had once worked at Smith Barney, so the younger Dimon knew the firm well; he would help transform Smith Barney from a small brokerage into a major Wall Street player. He was put in charge of integrating Smith Barney with Shearson, the brokerage business that Smith Barney purchased in 1993. Dimon recalled the difficulty of extricating Shearson from Lehman Brothers, its former sister company, and from American Express, its old parent—comparing the process in the New York Times to "splitting apart Siamese twins" (July 13, 1995). Elsewhere he stumbled trying to build the company's investment-banking business, luring bankers from Morgan Stanley with exorbitant pay packages that robbed colleagues of a substantial portion of the bonus pool. Morale declined and dozens of bankers left the company. In January 1996 Dimon apologized to his team, as quoted by BusinessWeek : "I know I made mistakes, and I'm sorry. Let's move forward" (October 21, 1996).

A PRECOCIOUS PERFORMER

Dimon quickly rebounded and in 1996 became the chairman and CEO of Travelers' Smith Barney subsidiary—at age 40 he was the youngest CEO of a major securities firm. His achievements included spearheading the firm's arrival on the Internet, making Smith Barney the only brokerage to tie into the widely used personal-finance software program Quicken, and pushing the company to become the first brokerage to offer no-load mutual funds to customers. As Dimon emerged from his mentor's shadow with the confidence to make his own decisions, tensions between the two began to surface. One insider who wished to remain anonymous noted in BusinessWeek, "Jamie's riding high on Smith Barney's success. He can hold stronger views than ever before" (October 21, 1996).

NUMBERS ARE NOT EVERYTHING

A bullish market—along with Dimon's unrelenting focus on keeping costs down—continued to fuel Smith Barney's strong performance. In 1996 the company's return on equity was among the highest in the industry; in the second quarter of that year it was a record 36.7 percent. In the fall of 1996 Smith Barney contributed 30 to 40 percent of its parents' earnings. Dimon's only demerit throught that period of time was his lack of people skills; during one meeting with 20 employees, as reported by BusinessWeek, Dimon openly disparaged one underling, saying, "That is the stupidest thing I ever heard" (October 21, 1996). An employee who witnessed the exchange noted, "It wasn't personal or mean spirited, but he would be more effective if he would lighten up" (October 21, 1996).

TOO MANY MERGERS COMPROMISE QUALITY

In November 1997, with the merger of Smith Barney and Salomon Brothers, Dimon became cochairman and co-CEO of the combined firm. In 1998 Weill and Dimon engineered a $73 billion deal: Travelers Group, the brokerage and investment-banking and insurance giant they had created from humble beginnings, purchased the retail market leader Citicorp to form Citigroup. Their aim was nothing less than to transform the financial-services landscape by creating the first comprehensive financial-services behemoth with dealings in both the consumer and corporate banking markets.

For half a year after the $73 billion 1998 merger of Citicorp and Travelers, Dimon, Sir Deryck Maughan, and Victor Menezes were all given co-CEO status to supervise the investment-banking segment of Salomon Smith Barney (SSB). Under their watch SSB lost hundreds of millions of dollars in overseas markets and other risky bond investments.

POWER STRUGGLES DESTROY A RELATIONSHIP

Concurrently the tension between Dimon and Weill reached a boiling point when Dimon refused to appoint Weill's daughter, Jessica Bibliowicz, as chief of asset management at Travelers and as well to turn over Salomon's bond business to Weill's son, Marc. A $1.3 billion trading loss in Dimon's Salomon division further exacerbated the situation. On November 1, 1998, the man Dimon had once referred to as a second father asked him to resign. Dimon said several years later in Money magazine, "It was a surprise. And yes, it was hard, because that company was my baby, my family" (February 2002). Dimon had been forced out. Given the choice between his own children and his "adopted" son, Sandy Weill had favored his blood. Ironically both of Weill's children wound up leaving their father's firm.

The news of Dimon's departure seemed to stun Wall Street, which had expected Dimon to become chairman of Citigroup after Weill's retirement. Sally Krawcheck, the analyst at Sanford C. Bernstein & Company, told the Washington Post, "I was shocked, followed by terror about his resignation. I went through mourning, denial, all that stuff. This is a man who is tremendously respected" (November 3, 1998). In fact Dimon was so well respected that when he stepped onto the Salomon Smith Barney trading floor after handing in his resignation, one thousand traders responded by giving him a standing ovation. In the Washington Post a Salomon investment banker said, "We all wanted to hate him, but he turned out to be a real quality guy. He was thoughtful and always willing to spend time explaining" (November 3, 1998). In a coincidental twist, in 2003 Krawcheck joined Citigroup as director of research for its Smith Barney Division—the unit Dimon had helped build.

As far as Dimon was concerned, Weill's motivation in forcing out his right-hand man and protégé of 17 years was transparent. He compared the situation to a Shakespearean tragedy, casting himself as the Earl of Kent, who paid the price for challenging the authority of King Lear.

TIED TO THE BANKING INDUSTRY

On March 27, 2000, after an 18-month break from the financial-services industry, Dimon became the chairman and CEO of Bank One, the fifth-largest bank in the country. Dimon said he turned down top jobs at Amazon.com and other coveted employers because banking was an inextricable part of his life. As he told Money magazine, he came to his decision after taking more than a year off: "I just took out that old white pad: Maybe I want to be an investor. Maybe I want to be a teacher. Maybe I want to write books. Maybe I want to stay home and be with my kids when they're growing up. I thought about all of that, and I was very open-minded about it, and what I came to is: My craft is financial services. Right or wrong, that's what I know, and I'm pretty good at it" (February 2002).

Dimon had been hired to turn around the ailing Bank One, which had been hit by a series of management missteps and earnings shortfalls beginning in 1999 that left the bank with a $511 million net loss in 2000. Dimon told the Lafayette (IN) Journal and Courier, "I want to make the company strong so it's a predator, not the prey" (April 3, 2000). Dimon backed up his words with cash, buying two million shares of his new company. He remarked in Money magazine, "Ownership is a critical thing. Even if you run a retail store, you think, 'Hey, it's my store, my company,' and you run it like it's your own. And I learned that from Sandy" (February 2002).

A FOCUS ON COSTS BEGETS A TURNAROUND

In his first year at Bank One, Dimon strengthened the management team and fortified the corporation's balance sheet, saving more than $1 billion through waste-reduction efforts. He severed relationships with corporate borrowers that failed to purchase the company's more profitable services, such as money management and stock underwriting, and closed the much-hyped but unprofitable online division, WingspanBank.com. Each of the company's 1,800 offices were ordered to post profit-and-loss statements, and branch managers were compensated based on net revenues, not sales. Dimon scrutinized every dollar the company spent. As reported by Money, when a high-level executive informed him of the numerous subscriptions held by the company, Dimon said, "You're a businessman; pay for your own Wall Street Journal " (February 2002).

During this period Dimon's conservative side emerged. After taking the reins at Bank One, he immediately implemented a complex risk-management system that left the company with a more diversified investment portfolio. The procedure put in place by that system led Bank One to reduce loans to WorldCom and other risky firms by billions of dollars—before the technology market tanked; Dimon's leadership was prescient. Effective May 2004 Dimon's former employer Citigroup agreed to pay $2.65 billion to settle a lawsuit brought by WorldCom investors, opening an expensive new chapter in the company's efforts to clean up after various corporate scandals.

Dimon judiciously turned down several possible deals. Household International, the struggling consumer-finance company based in the Chicago area, went up for sale in 2002. Dimon was more than familiar with the firm's core business: like Commercial Credit, the outfit he had developed with Weill, Household offered loans to consumers with poor credit. But Dimon passed; Household was later sold to HSBC. Dimon told London's Financial Times, "I don't think we are ready to take on whole other business lines" (March 28, 2003).

A CAREER-BOOSTING MERGER

In January 2004 Dimon negotiated a deal to merge Bank One and J. P. Morgan Chase & Company of New York. Both banks needed each other in order to truly compete globally—and especially to keep up with Citigroup, the world's largest financial-services firm in 2003 with more than $100 billion in revenues. The merged entity would be headquartered in New York but would base certain retail operations in offices in Chicago.

J. P. Morgan Chase described the transaction as a merger of equals; it had acquired Bank One for about $58 billion in stock, forming the second-biggest U.S. bank, with loans and assets of $1.1 trillion. Following the merger both of the companies' U.S. consumer and commercial banking businesses would operate under the Chase brand. The transaction combined Bank One's strength in consumer financial services with J. P. Morgan's formidable hold on the corporate-banking market. The combined network of branch banks comprised 2,300 outlets—three times as many as were run by Citigroup. Thomas Brown, the independent analyst with Bankstocks.com, said in Fortune, "Their strengths and weaknesses match up almost perfectly" (February 9, 2004).

When asked if he was bothered by the fact that the new entity would have no retail brokerage network—a hallmark of Weill's various companies dating back to the 1960s—Dimon's response, as reported by the New York Times, was telling: "My dad is still a stockbroker; but we have to get this done and then dream about the next thing" (January 18, 2004).

Under the agreed-upon terms at the new J. P. Morgan, Dimon would succeed William Harrison as CEO in 2006—until that time he would remain president and chief operating officer, and the board would evenly comprise Bank One and J. P. Morgan directors. While the advantages to both Bank One and Dimon were evident, Dimon recalled feeling extremely anxious about making the deal official. He said in Fortune, "It's terrifying. Do you push the button or not? But if you don't and this opportunity is gone when you want it later, you've made a horrible mistake. So I pushed the button" (February 9, 2004).

MANAGEMENT STYLE MATTERS

The J. P. Morgan deal provided Dimon with the career opportunity of a lifetime and the chance to directly challenge his one-time mentor. Whether or not he would excel in his new position was said to be largely dependent on his ability to keep his hallmark intrusiveness in check. At Bank One, Dimon spent half of each day drilling employees from the top of the management chart on down about the tiniest details of the business. He disliked being caught off guard and went to incredible lengths to amass and digest huge amounts of information. Linda Bammann, Bank One's chief risk officer, noted in Fortune, "God help you if you go on vacation. He'll meet with your people and start changing things" (February 9, 2004).

In early 2004 Dimon claimed that he would take a more laid-back approach in the future at J. P. Morgan. Fortune quoted him as saying, "After the merger I won't say, 'I want A, B, or C.' I will try it their way. I'll put out ideas and let them work it" (February 9, 2004).

See also entries on Bank One Corporation and J. P. Morgan Chase & Co. in International Directory of Company Histories.

sources for further information

"Bank One Hopes Kid Wonder's Game Plan Works," Journal and Courier (Lafayette, Ind.), April 3, 2000.

Day, Kathleen, and Ianthe Jeanne Dugan, "Clash of Corporate Cultures Shakes Citigroup Management," Washington Post, November 3, 1998.

Kurson, Ken, "Jamie Dimon Wants Respect," Money, February 2002, p. 46.

Silverman, Gary, "I Am Not Restless in Chicago," Financial Times (London), March 28, 2003, p. 15.

Spiro, Leah Nathans, "Whiz Kid," BusinessWeek, October 21, 1996, p. 96.

Thomas, Landon, Jr., "Dimon's Bank Deal: Big, but Maybe Not His Last," New York Times, January 18, 2004.

Truell, Peter, "Becoming His Own Man," New York Times, July 13, 1995.

Tully, Shawn, "The Deal Maker and the Dynamo," Fortune, February 9, 2004, p. 76.

—Tim Halpern