JPMorgan needs to pay less

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The unthinkable has happened - Jamie Dimon has been castigated for profligacy when it comes to pay.

Previously known for such frugalities as eliminating corporate gymnasiums, Dimon has stood up for compensation of late.

In the past month he has defended the payment of bonuses for hard jobs and reflected that he would be particularly upset if TARP-related pay restrictions meant his best talent left for European competitors.

However, JPMorgan's recent generosity towards its own employees has not gone unnoticed. In a research note published yesterday, Keefe Bruyette & Woods expressed "concern" over "continued elevated comp levels at JMP."

At 107% in the fourth quarter, KBW's analysts point out that adjusted (for IPO stock awards) compensation costs as a proportion of net revenues were well above their historical range of 55-60%.

For 2008 as a whole, compensation costs as a percentage of revenues at JPMorgan's investment bank rose to 63%, up from 44% in 2007.

In yesterday's investor day presentation JPMorgan stressed its intention to be 'disciplined' about capital, expenses and headcount.

It also said it planned to expand prime brokerage internationally, build out its physical commodity trading capabilities in Asia, expand its FX presence in local markets and spend money on tech platforms across various areas.