healthy4u: JPMorgan Chase

The Greedy Leading the Greedy - Multimillionaire Former Johnson and Johnson CEO Approved Huge Compensation for JP Morgan Chase CEO After Company Paid $20 Billion in Legal Settlements

JP Morgan Chase CEO Got Huge Raise Despite Company's Recent Huge Legal Settlements The current compensation set by the board of directors of JP Morgan Chase for CEO Jamie Dimon, $20 million a year, has attracted some attention (e.g., see <a href="http://www.rollingstone.com/politics/blogs/taibblog/jamie-dimons-raise-proves-u-s-regulatory-strategy-is-a-joke-20140130">this commentary</a> by Matt Taibbi), especially given the contrast between his raise and the $20 billion or so the company had to pay out last year in settlements of allegations of unethical practices.  A New York Times <a href="http://www.nytimes.com/2014/02/01/business/accounting-for-jamie-dimons-big-pay-raise.html">opinion piece</a> rushed to Mr Dimon's defense <blockquote class="tr_bq">in the world of executive compensation, especially when viewed from the rarefied perspective of other chief executives, and more broadly on Wall Street, Mr. Dimon’s pay — and how it was determined — is not only defensible, but laudable.</blockquote> Also, <blockquote class="tr_bq">I spoke this week to several people with direct knowledge of the board’s discussions about Mr. Dimon’s pay. They said that the compensation committee went through an exhaustive process to determine the right level and that the board considered the likely negative reaction. 'We were mindful of it, but it didn’t influence our decision,' said one, who like the others, spoke only on condition of anonymity. 'Some people were going to criticize us unless we paid him nothing. We were trying to do the right thing.' </blockquote> The author did conclude with a quote from Rep Peter Welch (D - Vermont), <blockquote class="tr_bq">This isn’t really about Jamie Dimon. It’s about a whole culture of immunity for the consequences of your actions. </blockquote>A Retired Pharmaceutical CEO Who Also was Hugely Compensated Despite his Company's Troubles Set Dimon's Pay We have frequently discussed how the culture of immunity, or <a href="http://hcrenewal.blogspot.com/search/label/impunity">impunity</a> found in <a href="http://hcrenewal.blogspot.com/search/label/finance">finance</a> may carry over into health care, since now many extremely rich  leaders of finance firms sit on boards of trustees of health care institutions like hospitals and hospital systems, universities and their associated medical schools and teaching hospitals, and health related foundations, and boards of trustees of health care corporations. In this case, maybe the culture carried over from health care to finance. The NY Times article noted <blockquote class="tr_bq"> The compensation and management development committee of JPMorgan Chase’s board has three members, all seasoned business luminaries in their own right. Lee R. Raymond, the chairman, is the former long-serving chairman and chief executive of Exxon Mobil. Stephen B. Burke is chief executive of NBCUniversal. William C. Weldon is the former chairman and chief executive of Johnson & Johnson.</blockquote> Mr Weldon is the former pharmaceutical representative who rose to CEO of giant pharmaceutical/ biotechnology/ device company Johnson and Johnson.  Despite the appellation of business luminary above bestowed by the author of the NYT article, we noted <a href="http://hcrenewal.blogspot.com/2013/12/the-camels-aching-back-johnson-and.html">here</a> how many settlements have been made by, fines assessed against, and other adverse legal actions affecting Johnson and Johnson in the recent past.  Our lengthy summary of such cases is appended at the end of this post. Yet Mr William Weldon, the outgoing CEO on whose watch most of the misbehavior resulting in the legal actions listed in the appendix below occurred, retired with a huge retirement package, after receiving extremely generous compensation prior to that.   The retirement package was estimated to be worth from $143 to $197 million (look <a href="http://hcrenewal.blogspot.com/2012/03/despite-recalls-legal-settlements-and.html">here</a>).  In 2010, his total compensation was $29 million (look <a href="http://hcrenewal.blogspot.com/2012/02/semi-retirement-of-salesman-weldon-to.html">here</a>).   According to the <a href="http://www.investor.jnj.com/secfiling.cfm?filingID=1193125-12-113826">2012 Johnson and Johnson proxy statement</a>, his 2011 total compensation was greater than $26 million. As far as I can tell, Mr Weldon never suffered any negative consequences for his company's sorry record, and retired a very rich man. Yet the luminous Mr Weldon got to make the decision about how much to pay Mr Jamie Dimond after his company's recent sorry record. Summary So it appears that the top hired executives of health care and finance organizations, and the so-called stewards sitting on their boards of directors are all blending together.  Together they are in charge of assuring that top hired executives get richer and richer even while the companies they lead commit seemingly endless strings of ethical and sometimes legal offenses. Is this any way to run health care, or the economy? As I have repeated ad nauseum, <div class="A_Standard__35__20_Normal">Many of largest and once proud health care organizations now have recent records of repeated, egregious ethical lapses. Not only have their leaders have nearly all avoided penalties, but they have become extremely rich while their companies have so misbehaved. These leaders seem to have become like nobility, able to extract money from lesser folk, while remaining entirely unaccountable for bad results of their reigns. We can see from this case that health care organizations' leadership's nobility overlaps with the supposed "royalty" of the leaders of big financial firms, none of whom have gone to jail after the global financial collapse, great recession, and ongoing international financial disaster (look <a href="http://hcrenewal.blogspot.com/2012/08/duchess-of-wellpoint-abdicates-likely.html">here</a>). The current fashion of punishing behavior within health care organization with fines and agreements to behave better in the future appears to be more law enforcement theatre than serious deterrent.  As Massachusetts Governor Deval Patrick exhorted his fellow Democrats, I exhort state, federal (and international, for that  matter) law enforcement to "<a href="http://www.washingtonpost.com/blogs/election-2012/wp/2012/09/04/patrick-it-is-time-for-democrats-to-grow-a-backbone/">grow a backbone</a>" and go after the people who were responsible for and most profited from the ongoing ethical debacle in health care. Again, true health care reform would make leaders of health care organization accountable for their organizations' bad behavior.</div> <div class="A_Standard__35__20_Normal">Appendix - Johnson and Johnson Recent Legal Record</div><div class="A_Standard__35__20_Normal"></div><div class="A_Standard__35__20_Normal"></div><div class="A_Standard__35__20_Normal">2010 </div><div class="A_Standard__35__20_Normal">- Convictions in two different states in 2010 for misleading marketing of Risperdal - A guilty plea for misbranding Topamax in 2010 2011</div><div class="A_Standard__35__20_Normal">- Guilty pleas to bribery in Europe in 2011 by Johnson and Johnson's DePuy subsidiary - A guilty plea for marketing Risperdal for unapproved uses in 2011 (see <a href="http://hcrenewal.blogspot.com/2011/08/why-cultivate-weldons-confidence-ceo.html">this link</a> for all of the above) - A guilty plea to misbranding Natrecor by J+J subsidiary Scios (see post <a href="http://hcrenewal.blogspot.com/2011/09/johnson-and-johnson-pleads-guilty.html">here</a>) 2012 </div><div class="A_Standard__35__20_Normal">- In 2012, testimony in a trial of allegations of unethical marketing of the drug Risperdal (risperidone) by the Janssen subsidiary revealed a systemic, deceptive stealth marketing campaign that fostered suppression of research whose results were unfavorable to the company, ghostwriting, the use of key opinion leaders as marketers in the guise of academics and professionals, and intimidation of whistleblowers. After these revelations, the company abruptly settled the case (see post <a href="http://hcrenewal.blogspot.com/2012/02/texas-tmap-trials-as-illustration-of.html">here</a>). -  Also in 2012,  Johnson & Johnson was fined $1.1 billion by a judge in Arkansas for deceiving patients and physicians again about Risperdal (look <a href="http://hcrenewal.blogspot.com/2012/04/once-more-with-feeling-johnson-and.html">here</a>). -  Also in 2012, Johnson & Johnson announced it would pay $181 million to resolve claims of deceptive advertising again about Risperdal (see this <a href="http://hcrenewal.blogspot.com/2012/09/how-many-legal-settlements-does-it-take.html">post</a>). </div><div class="A_Standard__35__20_Normal">2013 </div><div class="A_Standard__35__20_Normal">-  In 2013, Johnson & Johnson settled case by shareholders alleging that management made misleading statements and withheld material information about manufacturing problems (see this <a href="http://hcrenewal.blogspot.com/2013/07/johnson-and-johnson-settles-suit.html">post</a>)</div><div class="A_Standard__35__20_Normal">-  In 2013, Johnson & Johnson Janssen subsidiary pleaded guilty to a charge of misbranding Risperdal, and settled for a total of $2.2 billion allegations that it promoted the drug for elderly demented patients and adolescents without an indication, and despite evidence of its harms (see this <a href="http://hcrenewal.blogspot.com/2013/11/another-and-huge-22-billion-settlement.html">post</a>).  </div><div class="A_Standard__35__20_Normal">-  In 2013, Johnson & Johnson DePuy subsidiary agreed to settle with multiple plaintiffs for $2.5 billion allegations that it sold defective mental-on-metal artificial hip, and hid evidence of its harms .</div><div class="A_Standard__35__20_Normal">- In 2013, Johnson & Johnsonn Janssen subsidiary was found by two juries to have concealed harms of its drug Topamax (see this <a href="http://hcrenewal.blogspot.com/2013/11/there-they-go-again-again-johnson-and.html">post</a> for this and above case).</div><div class="A_Standard__35__20_Normal">- In 2013, Johnson & Johnson Ethicon subsidiary's Advanced Surgical Products and two of its executives agreed to settle charges by US FDA that is sold mislabeled products used to sterilize equipment such as endoscopes (see this <a href="http://hcrenewal.blogspot.com/2013/12/how-many-straws-johnson-and-johnson.html">post</a>). </div><div class="A_Standard__35__20_Normal">- In 2013, Johnson & Johnson fined by European Commission for anticompetitive practices, that is, collusion with Novartis to delay marketing generic version of Fentanyl (see this <a href="http://hcrenewal.blogspot.com/2013/12/the-camels-aching-back-johnson-and.html">post</a>).  </div>

The Greedy Leading the Greedy - Multimillionaire Former Johnson and Johnson CEO Approved Huge Compensation for JP Morgan Chase CEO After Company Paid $20 Billion in Legal Settlements

JP Morgan Chase CEO Got Huge Raise Despite Company's Recent Huge Legal Settlements The current compensation set by the board of director...

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"The Banks Can Do It, Why Can't Hospitals?"

I have often heard the refrain that while away from one's home in Terre Haute, one can withdraw money from an ATM machine in Timbuktu. So, why can't my medical records from birth be called up instantly from the Timbuktu Regional Hospital if I fall unconscious at the <a href="http://en.wikipedia.org/wiki/Festival_au_D%C3%A9sert" title="Festival au Désert">Festival au Désert</a> and forgot my wallet? In other words, computing in the banking industry is perfected, so why can't healthcare get its act together? (Irrespective of the sea change of difference between simple financial data and incredibly complex medical data.) Not so fast, health IT <a href="http://hcrenewal.blogspot.com/2012/02/health-it-ddulites-and-irrational.html">Ddulites</a>: <blockquote>New York Times February 9, 2012 <a href="http://dealbook.nytimes.com/2012/02/09/online-users-of-citibank-bill-pay-app-charged-twice/">Users of Citibank Bill-Pay App Charged Twice</a> By BEN PROTESS A program error at Citibank was not detected for months. Citigroup’s effort to become “the world’s digital bank” has encountered a snag. ["<a style="font-weight: bold; font-style: italic;" href="http://hcrenewal.blogspot.com/search/label/glitch">Glitch</a>" is the health IT-specific term - ed.] A technical bug caused Citi, the nation’s fourth largest bank by deposits, to double the charge for customer payments in recent months. Some customers using their iPads to settle their cable bill or mortgage payment, for example, actually paid twice, according to customers and a bank official. The problem, which began in July but went undetected by the bank until December, prompted bogus payments big and small. Some customers quickly spotted the redundant transaction and complained to Citi, while other consumers were caught off guard when the bank recently notified them of the discrepancy. The snag even led some unsuspecting customers to overdraw their accounts, though a bank spokesman said that was rare. Citi has traced the error to its nascent iPad application. Other mobile applications and the bank’s broader online bill payment system were immune from the problem, the bank said. But a few clients who were charged twice said they had not used an iPad to pay bills. And the Citi spokesman declined to disclose the number of customers caught up in the mishap, saying only that it amounted to “a limited number of clients.” [It would appear that Citi was not in complete control of its systems; the systems were in control of Citi - ed.] Instead, the spokesman said that fewer than 2 percent of Citibank transactions executed through an iPad were counted twice. The spokesman would not elaborate on the number of iPad transactions at Citi, citing concerns about releasing proprietary data. [2% of a very large number is still a large number - ed.] ... While Citi may be the first company to stumble with the iPad, it is far from the only bank to encounter electronic hiccups. Customers have long been befuddled by accidental A.T.M. withdrawals and so-called transaction gaps, where a customer pays online but the transaction fails to process. A number of regional banks have also double-dipped with customer payments and even JPMorgan Chase, the nation’s biggest bank, recently had a minor brush with duplicate online withdrawals. The mishaps, while minor, underscore the risks that customers face when banks wade into the fledgling world of online banking. [That's peanuts compared to the risks they face when hospitals wade into the fledgling world of electronic medical records and CPOE - ed.] While banks are scrambling to please customers who prefer clicking a mouse to dealing with tellers, the industry is learning that new technologies come with some growing pains. “It’s a challenge for banks to keep up with the device proliferation — everything is moving very fast,” said David Albertazzi, a senior analyst with Aite Group, which advises financial institutions on technology and regulatory issues. “It is very important that financial institutions balance speed-to-market versus safety and soundness.” [Healthcare seems immune from that wise caveat. 'Full steam ahead, icebergs be damned' seems the siren call for IT in that domain - ed.] ... Last year, JPMorgan Chase owned up to its gaffe, a technical hitch with an online cash transfer system, within a day. “People make mistakes. Unfortunately, we made one twice,” Ryan McInerney, Chase’s chief executive of consumer banking, told customers, who received a $25 cash bonus for their troubles. [Every excuse term in the book's been used here - growing pain, hiccup, snag, bug, hitch, flaw - except one - 'incompetence' - ed.] Citi’s response, however, appears to have been not nearly as prompt. The error began in July, within days of the bank introducing its gleaming new iPad application. The coming-out for the application included a press release announcing the “new standard for digital banking” with a “one-of-a-kind app.” ... “EBusiness professionals at retail banks — and other financial institutions — should pay close attention to what Citibank has done, particularly its willingness to experiment and try out new ideas in a brand-new channel,” Forrester Research, a technology research company, said in a report. [Healthcare IT is a big experiment, except it's not just dollars and cents that can get farkled - ed.] But almost immediately, a smattering of anonymous customers began posting concerned comments online, wondering whether it was their own fault — the product of double-clicking. Then fingers began to be pointed at the bank. One online commenter posting on the company’s Apple store Web site called the application “very unreliable.” In late December, the bank tracked the error to an internal flaw. A technical command on the bank’s iPad application, it turned out, was wrongly set to redo transactions that had initially failed. The bank began alerting customers to the snag in mid-January, and made another round of calls this week, including to clients who say they had not paid their bills through the iPad. ... Citi has had other technology problems in the last year. Last summer, the bank disclosed that hackers had stolen the names and addresses of hundreds of thousands of North American credit card customers. A week later, the bank revised its estimates, saying that about 80 percent more customers had been ensnared than previously thought. The breach, which did not include Social Security numbers or security codes, was a lesson for Wall Street firms. Big banks, experts say, are now more reluctant to estimate the scope of a problem in case the numbers grow. “It’s very challenging to really pinpoint the number of customers affected,” Mr. Albertazzi said. “It’s the nature of the beast.” </blockquote> If these growing pains, hiccups, snags, bugs, hitches, and flaws are the "nature of the beast" in electronic banking systems, one can only wonder why banking is held up to be the "gold standard" that healthcare has to equal. Healthcare has a long tradition and obligations to implement new technologies with the greatest of caution and care, using clinical trials based on the scientific method, and with informed consent. Banking lacks such traditions. The healthcare IT industry has largely abandoned them. While a bank's computing may make a mistake with a decimal point, a hospital's computer errors can injure or kill people. The current rush to universal health IT needs to slow down. Further, HIT industry pundits need to stop making comparisons to other industries that are both irrelevant and unwarranted. -- SS

"The Banks Can Do It, Why Can't Hospitals?"

I have often heard the refrain that while away from one's home in Terre Haute, one can withdraw money from an ATM machine in Timbuktu. ...

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