EFTA01821609.pdf

To: Jes Stale From: Jeffrey E Sent Sun 12/20/2009 9:24:32 PM Subject: Re: i like it On Sun, Dec 20, 2009 at 2:48 PM, Jes Stale wrote: In response to your questions on Friday, here are some thoughts on this year's compensation. I will start with a couple of facts, as I see them: • We were one of the most profitable investment banks in the industry, and our profitability was driven by the extraordinary results of the fixed income businesses. • In 2009, there was a significant appreciation of the value of financial assets following the collective action of world central banks in 2008 to avert a systemic failure in the global financial system. • The banking industry has lost the support and trust of society. There is a general belief that we are gaining unfairly, a financial reward at society's expense. • 27 of the 34 JP Morgan people currently listed to earn over $10,000,000.00 for 2009 are in the markets businesses. We have stated for some time that our philosophy is to pay for performance. And I would add to this the belief that we need to pay competitively if we arc to keep the talent we need to deliver the returns that our shareholders should expect. Now we are faced with the reality of a society that is asking whether what we make is fair. Forget whether our bottom line merits the personal returns we expect, but rather, does the financial community deserve such riches when the majority of our society, whether they be doctors or teachers, live the financial hardship of an economy in a struggle. I think Jamie is struggling with this philosophical debate. And I think he is asking for room. If you were in his shoes what would you do? If you were out of the financial world, what would you argue? I wrestle with giving ground on the commitment to be competitive and to pay for performance. I also wrestle with explaining the pain of taking a trader down from $15,000,000.00 to $12,000,000.00, and calling such a move, an unwarranted sacrifice given today's reality. And the reality is that you and I are now beyond the internal. game of playing for one side. We are now asked to shoulder the presence of the bank within the broader community. Leadership expands our responsibility beyond our team. What I do know is that we need to regain society's trust in the financial sector in general, and JP Morgan in particular. If not, we EFTA_R1_00194871 EFTA01821609  may be regulated out of our current construct. We need to demonstrate that what we earn is justified and that what we do benefits the broader community. If Jamie is trying to buy us time by showing restraint, perhaps we should rely on his judgment. Unfortunately, the weight of that decision will rest with your area. That is the where the battle will rage for that is where the money is. I will be in the office shortly. Jestt This email is confidential and subject to important disclaimers and conditions including on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, confidentiality, legal privilege, and legal entity disclaimers, available at http://www.jpmorgan.com/pages/disclosures/email. ******* ****** ************************** ******************** The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of Jeffrey Epstein Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return c-mail or by c-mail to [email protected], and destroy this communication and all copies thereof, including all attachments. EFTA_R1_00194872 EFTA01821610