JP Morgan Chase 2014 Annual Report Download - page 40

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V. A STRONG CORPORATE CULTURE
internal justice, we can review someone’s
total performance across all measures,
and we can understand how a manager
manages up, down and across the organiza-
tion – not just up.
We want to have the best people, and competi-
tive compensation is critical. We must
continue to pay our people properly,
competitively and well for doing a good job.
It is imperative at JPMorgan Chase that we
continue to attract and retain the best.
We treat all of our people fairly. While we
generally talk about compensation for the
most senior managers, the compensation
levels of our entire employee population
are fairly similar to that of the U.S. popula-
tion’s household income distribution. We
invest a significant amount of time and
money to ensure that all of our employees
are properly compensated. We still have
a defined benefit pension plan for most
of our employees that provides a fixed
income upon retirement to supplement
Social Security and any other savings they
have. We also provide a 401(k) plan with
matching dollars. In addition, we have excel-
lent healthcare plans that incentivize people
to take care of themselves. For example,
premiums are lower if an employee gets
an annual physical examination or stops
smoking. We also subsidize these health-
care plans more for lower paid employees
(at 90%) versus our higher paid employees
(who are at 50%). And each year, we are
recognized as a great place to work by
various groups, including Working Mother
100 Best Companies, Top 100 Military
Friendly Employers by G.I. Jobs magazine
and Best Employers for Healthy Lifestyles
by the National Business Group on Health,
among many others.
As we centralize all risk functions, we also
must be certain that line of business CEOs
remain empowered to manage their business
end to end
We always have tried to be very thoughtful
about which functions are centralized or
decentralized at the company. We always
have centralized functions that can create
huge economies of scale like data centers or
utilities that are used by the entire company
(like general ledgers and payroll) or critical
control functions (like Corporate Legal,
firmwide accounting policies, etc.). We try
to decentralize where we can and when it
makes sense to do so. For example, while a
lot of finance functions reside at Corpo-
rate (like accounting policy), some finance
people are devoted to only one line of
business, so we keep them within that line
of business. We do this to provide direct
accountability, speed up decision making
and minimize bureaucracy.
In the new world, in order to improve the
consistency of controls, regulators have
demanded that most risk and control func-
tions be centralized, including Risk, Compli-
ance, Finance, Oversight & Control, Audit
and Legal. In doing this, we have given huge
amounts of additional authority to functions
at our corporate headquarters. Corporate
headquarters can sometimes forget that it
exists only because there is a banker in front
of a client somewhere. The Home Depot, one
of America’s great companies, does not call its
corporate headquarters the corporate head-
quarters – it’s called Store Support Center to
remind employees every day why they are
there: to support the stores and the clients.
This still remains true at JPMorgan Chase
– we at Corporate would not be here if we
didn’t have our bankers in front of clients.
We need to work hard to get the best of both
centralization and decentralization. And we
need to manage Corporate so the line of busi-
ness CEOs and management teams are fully
responsible and empowered to manage their
businesses. Centralization should not mean
demoralizing bureaucracy or slowing down
services as multiple committees and layers