Posted March 20, 2013 by Samantha Meade in Markets

Fed’s Decision Can Give Dimon Extra Profit Payout

Fed’s Decision Can Give Dimon Extra Profit Payout
Fed’s Decision Can Give Dimon Extra Profit Payout

If the last week’s decision of Federal Reserve to stress test the results do not provide with justified dividend and its gain, the chief executive officer of JP Morgan Chase & Co., Jamie Dimon states that he will stand to accept the loss of around $1.39 million in one year.

As per the predictions of analysts, Dimon can get to enjoy extra income from his shares and stakes about almost around 6 million, in case the New York established bank declare to increase its payout. In accordance to the predictions and forecasts done by analysts with data and information compiled by Bloomberg, it is stated that the combined sum will be $73,300 in the new yearly dividend is at stake for not only the CEO of Bank of America but also other organizations including Goldman Sachs Group Inc., Wells Fargo & Co. and more.

Bankers will need to know whether they will want to enhance the market tomorrow after the announcement of Fed with capital plans of 18 biggest US lenders who won approval. The regulators of the market have pressed the organizations since the year of 2008 to provide executives with more stock facility, and limited cash access to align the interests of investors and shareholders. In case of payout increase, the CEOs will get to enjoy a windfall with rise in shares; or suffer the side effects in case of any sputter.

The last week’s stress test provides with a clear message that the financial institutes and banks will be going to have to make their capitals go high, especially in the large banks. “The banks should be able to raise their dividend ratio, without indulging in an odd fashion.” says Nancy Bush, the analyst of SNL Financial LC, which is a research firm established at Virginia.

To get this new policy offer, banks will need to clear through the stress test that is run by Fed. They will need to submit capital plans which will include reformation in the programs of dividends and stock buyback. The 4 lenders have however not disclosed anything regarding the raise they are asking for. On the other hand, Citigroup based in New York and Morgan Stanley states that they haven’t asked for any increase in the dividend.

If JP Morgan gives its quarterly payouts a high from the current 30 cents to 36 cents, Dimon will be getting an extra of $1.39 million, which is estimated by the team of 14 analysts as per the survey. Dimon will then get to avail as much as $2.3 million excess in one year, offering a high in the dividend rate, the highest as per the assets of US banks.

Banking on this new forecast, it is stated that new annual income of Dimon will go up to $8.3 million annually, as per the current filing of regulatory.

Samantha Meade

Samantha Meade is a General Assignment Reporter. Samantha graduate of Northwestern's Medill School of Journalism and a graduate of the University of Florida, where she majored in broadcast journalism. The Associated Press has recognized Samantha for four of her business and market features. She was also nominated four times for a national Cable Ace Award. In 2003, Samantha won a Georgia Association of Broadcasters.