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Jamie Dimon’s 10 commandments for thriving in an investment bank

Jamie Dimon shareholder letter

Don't make irrelevant comments in meetings.

Jamie Dimon has issued his annual letter to shareholders. Therein are buried some important nuggets of wisdom for all who would work at J.P. Morgan, despite the considerable competition to get in.

1. You shall not indulge in frivolous conversations 

Firstly, don’t gossip or indulge in light-hearted banter. Especially if you’re in a meeting.

Dimon says J.P. Morgan has asked that the people chairing its committees eliminate frivolous conversations from meetings. They’re also being asked to make sure ‘people arrive prepared and actually have read the pre-read documents.’ [Our emphasis].

2. You shall not work weekends, unless you happen to be on a live deal or you’re a junior who’s not on your one-weekend-off-a-month

Secondly, Dimon says J.P. Morgan’s protected weekends have been rolled out to all employees in the investment banking division – unless they’re working on, “essential execution work.”

Protected weekends for analysts and associates (ie. one full weekend off every month) have now been made mandatory globally.

3. You shall work in a control function, but possibly be paid less

Everyone knows that J.P. Morgan has been investing heavily in ‘controls’ (compliance, risk, finance). Dimon just quantified how much. Since 2011, he says headcount associated with control has gone up from 24,000 people to 43,000 people. Spending on controls has gone from $6bn to $9bn a year. Interestingly, this suggests that spending per head on control functions has fallen from $250k to $209k over the same period. Either JPM is paying its control people less, or swapping people for technology, or both.

4. You shall work in a technology role

As with controls, so with technology. J.P. Morgan’s technology numbers are big: the bank spends $9bn a year and employs 40,000 people in technology across the bank. 95% of J.P. Morgan’s spot FX transactions now take place electronically, 50% of its U.S. dollar swaps are processed electronically. Thanks to J.P. Morgan’s investments in equities technology, Dimon says the bank has nearly quadrupled its share of the US electronic cash equity market.

5. You shall not work in China, unless it’s as a researcher in the A-share market or a banker in IBD 

If you’re in with Tidjane Thiam, you’ll want to work in China. The CEO of Credit Suisse reiterated his commitment to the Chinese market this week, insisting that any recent problem are merely a blip and that now is the time to be expanding there.

Dimon is not so sure.

“Going forward, we do not expect China to enjoy the smooth, steady growth it has had over the past 20 years,” he says in his letter. “…There will be many bumps in the road.”

Nonetheless, Dimon said J.P. Morgan has doubled its research coverage of A-shares in China and is hiring investment bankers in the region.

6. You shall get hired in equity research or energy, technology and healthcare investment banking 

It’s not just China. Dimon said J.P.M. also has aspirations to hire “senior bankers” for energy, tech and healthcare, and that it’s been expanding its equity research coverage globally and now has, the “broadest equity company coverage platform among our competitors.” Equity research is becoming a key differentiator and selling point for banks’ online equity trading platforms.

7. You shall not work with a marginal client

Like most other banks, J.P. Morgan has been optimising its client list and dumping clients who don’t generate any real profits. Around 2,900 clients in the corporate and investment bank were “closed” last year.

8. You shall be like Citigroup 

Curiously, Dimon holds up Citi as an example of a bank that’s best in class in corporate and investment banking. Witness the chart below.

Best in class

9. If you work in sales and trading, you shall work for J.P. Morgan

Dimon also included a chart suggesting that J.P. Morgan’s market business is slowly taking over the world. Since 2006, its share of global markets revenues has increased from 7.9% to 15.9%. Unfortunately the same cannot be said for IBD.

JPM header

JPM CIB market share

10. You shall be tolerant, collaborative and a good listener 

Dimon rounds off his letter with a series of societal recommendations which seem aimed at the world as a whole, but could just as well apply to J.P. Morgan. He cautions against treating decisions as binary (“my way or your way”), against creating scapegoats (“these generally are subtle attempts to oversimplify someone’s position in order to attack it,”) against treating comments as if they’re complaints. He advocates listening, compromise, collaboration, and constant improvement.

Dimon ends by giving J.P. Morgan staff a pat on the back after noting that the bank’s senior managers have an average tenure of 15 years. Dimon himself has been the CEO of the combined J.P. Morgan Chase for 12 years; take heed of his advice.

Photo credit: Fortune Global Forum 2013 by Fortune Live Media is licensed under CC BY 2.0.

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