Business

Dimon wants Darling to reject bonus tax

(China Daily)
Updated: 2009-12-30 08:05
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NEW YORK: JPMorgan Chase & Co Chief Executive Officer Jamie Dimon told UK Chancellor of the Exchequer Alistair Darling that his 50 percent tax on banker bonuses would unfairly penalize the US bank, a person close to the firm said.

Dimon wants Darling to reject bonus tax

Dimon, 53, mentioned plans to build European headquarters in London's Canary Wharf for 1.5 billion pounds ($2.4 billion) as an example of the New York-based company's commitment to the city, the person said. Dimon reiterated that the bank, the second-biggest US lender by assets and deposits, paid British taxes and didn't take a UK taxpayer bailout, the person said, declining to be identified because the conversation was private.

The telephone call was made after Darling on Dec 9 imposed a 50 percent tax on discretionary bonuses greater than 25,000 pounds at all banks operating in the UK.

The tax, which the Treasury says will raise more than 550 million pounds, covers about 20,000 people in the UK.

JPMorgan is considering dropping plans to build its European headquarters at Canary Wharf because of the UK bonus tax, the Financial Times newspaper reported, citing an unidentified bank executive. The bonus tax will be a factor in the decision, the executive told the newspaper.

The Dimon phone conversation with Darling was reported yesterday by the London Telegraph. JPMorgan spokesman David Wells declined to comment.

A UK Treasury spokesman yesterday defended the tax as fair because it would apply to all banks and said he couldn't confirm whether the conversation took place.

The UK Treasury is working with banks to identify employees who are excluded from the tax, and Darling said on Dec 16 he will resist calls to change the policy.

He suggested banks' complex operations won't allow them to escape the levy by arguing that some activities aren't defined as banking.

JPMorgan paid 237 million pounds in November 2008 to acquire land in London's Canary Wharf financial district to build a 176,500 sq m tower.

Under the agreement with Canary Wharf's owners, who will build the offices, JPMorgan can scale back the size of the project.

The planned headquarters will house JPMorgan employees from seven other buildings after the bank scrapped plans to build its new head office in London's main financial district.

Bloomberg News

(China Daily 12/30/2009 page16)