INA Drew, the JP Morgan banker in charge of the largely London-based unit behind $2bn (€1.5bn) of trading losses at the bank, was paid $14m last year.
The 54-year-old, regarded as a key lieutenant of chief executive Jamie Dimon, has been running the chief investment office since February 2005. The bank uses the CIO to make broad bets to hedge its portfolios.
Ultimately, she is in charge of Bruno Michel Iksil, the London-based trader nicknamed the 'London Whale', whose trades are reported to be behind the loss.
Last year she received a cash bonus of $4.7m, a share award of $7.1m, options worth $1.5 million and a base salary of $750,000, according to regulatory filings by the bank.
Mr Iksil, whose immediate boss is Achilles Macris, is understood to still be with the bank.
Mr Dimon warned last night that the trading losses – racked up over the past six weeks – could get worse.
Shares in JP Morgan, which dropped 5pc in extended trading in New York wiping around $10bn off the bank's value, fell a further 9pc on Friday when trading opened on Wall Street.
“It puts egg on our face and we deserve any criticism we get,” Mr Dimon told analysts in a hastily arranged call after stock markets closed in New York late on Thursday.
He admitted the losses were linked to a Wall Street Journal report last month about the 'London Whale', who, the report said, had amassed an outsized position which hedge funds were betting against.
The Journal reported that hedge funds were making bets in the market for credit default swaps to try to take advantage of trades done by French-born Mr Iksil.
At that time, Mr Dimon said that the media coverage was “a complete tempest in a teapot”, but on Thursday he said the bank's loss had "a bit to do with the article in the press". He said: "I also think we acted a little too defensively to that."
Some of the losses have been offset by gains of about $1bn from the sale of other financial assets, according to the bank, which said that the division that made the trades will now lose about $800m this quarter.
The trading losses are an acute embarrassment for Mr Dimon, who has led Wall Street’s fight against what banks have deemed excessive regulation in the wake of the financial crisis.
Mr Dimon said that the set of trades, which includes credit default swaps, was designed to shield the bank from risk in the financial markets. “In hindsight, it was bad strategy, bad execution,” he said.
However, the scale of the losses will prompt renewed debate about the level of regulation that is needed to ensure the safety and soundness of the financial system. The CIO had moved from hedging risk to making speculative bets designed to reap profits for the bank, Bloomberg reported last month.
Mr Dimon refused to disclose any details about the trades that the bank had put on, but said that its focus was now on “maximising the economic value of these positions. We’ve got staying power and we’re willing to use it.”
Carl Levin, a Democratic Senator who has pushed for tougher regulation of banks' trading, said that the loss "is just the latest evidence that what banks call 'hedges' are often risky bets that so-called 'too big to fail' banks have no business making." Mr Dimon said that the trading losses “plays right into the hands of a bunch of pundits”. He added: “That’s life.”
JP Morgan held talks with City regulator, the Financial Services Authority, about the loss before last night's announcement.
JP Morgan was the only bank not to lose money during the financial crisis, and snapped up Bear Stearns for a bargain-basement price in 2008. It employs thousands of people in the City of London and generated a record $19bn in profits in 2011 due to an improving US economy.