In contrast to the proxy brouhaha over Vikram Pandit's paycheck at Citigroup, there was no expectation, until maybe now, that anyone would complain about the enormous booty Jamie Dimon earns.

JPMorgan Chase's stunning announcement Thursday evening changes everything. Chairman and CEO Dimon admitted to a "poorly monitored, poorly constructed, poorly reviewed" trading strategy that has cost the bank $2 billion since the beginning of the second quarter. On a hastily arranged conference call after hours, Dimon admitted the bank's substantial loss was a "terrible, egregious mistake" that will tarnish the firm's reputation.

 Dimon is suddenly down, although not yet out as I predicted earlier this year he might be.

JPMorgan will hold its annual meeting on Tuesday. Support for Dimon has been strong since the financial crisis and he has become more critical of those calling for tougher regulation of banks. Dimon and his bank are not supporting President Obama's reelection as he and the bank's employees did in 2008, according to the latest data from OpenSecrets.Org, the campaign contribution-tracking site.

Dimon earns the highest pay of the four CEOs of the largest US banks. JPMorgan has also outperformed its rivals, using its highly acclaimed "fortress balance sheet" as a shield against both scrutiny of smaller losses in specific businesses and concern over growing litigation costs. Proxy advisors Glass Lewis and Institutional Shareholder Services both urged shareholders to vote no on Pandit's pay this year, but they recommended a "Yes" vote for Dimon's.

The standard "advisory resolution to approve executive compensation," mandated by the Dodd-Frank Act, is included in this year's JPMorgan proxy as Proposal 3. According to the proxy, "shareholders approved a similar resolution in 2009 and 2010 by an average vote of 96% and in 2011 by a vote of 73%, in each case as a percentage of shares cast including abstentions."

JPMorgan's 2012 proxy says the lower approval vote in 2011 was because ISS urged a "No" vote. The 2011 proxy noted that ISS's standard test for correlation between CEO compensation and total shareholder return was positive, but ISS chose to recommend against JPM's Say on Pay proposal anyway "[i]n light of above-median CEO paycoupled with a discretionary naturein the company's executive compensation program."

It's not too late for JPMorgan shareholders to change their votes on Dimon's pay package. The proxy instructions say that votes can be changed at the meeting if you attend in person or revoke or amend your prior instructions by contacting the Corporate Secretary in the same way they were initially given – by telephone, email or in writing.

JPMorgan implemented incentive pay clawback provisions, per Dodd-Frank requirements, that allow the board to pull back incentive pay from any employees. The bank's policy, however, was initially criticized by New York City Comptroller John Liu. His office submitted a shareholder proposal to JPM aimed at clarifying all the ways the bank could claw back pay.

The original shareholder proposal specifically asked that when applied to senior executives, the word "material" be deleted from the requirement that to recover compensation there had to be "material financial or reputational harm" to JPMorgan or its business activities or a failure to properly identify raise or assess "risks material" to JPMorgan. The problem with the "m" word is that it's subjective. Had it been left in, the board would have had a lot of discretion about whether and when to claw back pay.

The Comptroller, as custodian and trustee for the New York City Employees' Retirement System, the New York City Fire Department Pension Fund, the New York City Teachers' Retirement System, the New York City Police Pension Fund and the New York City Board of Education Retirement System, also recommended executives should have incentive pay clawed back if they fail to appropriately manage or monitor an employee who failed to properly identify, raise or assess risks to JPMorgan or engaged in conduct that causes financial or reputational harm to JP Morgan or who engaged in conduct that's cause for termination.

That proposal was withdrawn when JPMorgan relented and added additional disclosures clarifying that the clawback provisions generally apply to acts or omissions and could apply to persons in a supervisory role. JPM agreed that an error or misstatement does not have to be "material" to the firm as a whole to trigger a clawback, but the impact can be also measured at the business or sub-business level.

Late Sunday there were reports some heads are already rolling.

Michael Garland, the Executive Director For Corporate Governance for the Comptroller's Office, says that $2 billion may or may not be material to the firm as a whole (he believes it certainly is). But there is no question that it is material to the business unit.

"Management has already acknowledged egregious errors. The onus is now on management and the board to hold accountable those responsible, including potentially up the ladder."

We shall see.

Francine McKenna writes the blog re: The Auditors, about the Big Four accounting firms. She worked in consulting, professional services, accounting and financial management for more than 25 years.