Why is Jamie Dimon so stingy?

While Goldman executives and shareholders appear more than willing to share profits equally with the firm's bankers, the same doesn't appear to hold for JPMorgan.

Compensation ratios in JPMorgan's investment bank fell to just 37% of revenues in the past quarter, down from 63% for 2008 as a whole, and well below the 50% typical of most US competitors.

With $233k in accrued compensation during the first half of the year, the average JPMorgan investment banker isn't exactly doing badly. But pay would be 35% higher if Jamie kept compensation ratios in line with everyone else.

So why doesn't he?

1). Innate parsimony: When Dimon arrived at the firm in 2004 he went on a cost cutting drive involving such crowd pleasing measures as the closure of staff gyms.

2). Memories of past profligacy: In the fourth quarter of last year investment banking revenues were negative, but $1.2bn of compensation was paid to investment bankers. Keefe Bruyette and Woods expressed concern over elevated compensation at the bank.

3). Retail banking mentality: JP Morgan employs 26,000 investment bankers and 103,000 retail bankers. $233k for six months' work seems an enormous amount when most of your staff are tellers. HSBC pays notoriously badly for the same reason.

4). The balance sheet: When you've got a $2 trillion balance sheet to help fund transactions, it's difficult to establish whether it's the balance sheet or the bankers who are winning business. Assume it's the balance sheet and the need to give bankers half your revenues disappears.