Adam Schwab, a corporate lawyer and company director, writes:

Fortune (03/04) has produced a great profile of the rise and rise of the “Toughest Guy on the Street”, JP Morgan Chase CEO, Jamie Dimon. In a past life, Dimon was Sandy Weill’s (former CEO and chairman of Citigroup) right hand man. After being fired by Weill in 1998, Dimon resurfaced at Bank One (which later merged with the struggling JP Morgan Chase in 2004).

Fortune focused on Dimon’s history of cost cutting and pay-for-performance metrics which enabled Dimon to steer Citigroup into the world’s largest financial institution and also double Bank One’s market cap (to $58 billion).

It wouldn’t hurt if the CEOs of the big Australian banks took the time to consider Dimon’s attitudes. Fortune unearthed a few Dimon gems, noting that after Dimon became CEO of JP Morgan he:

[C]onvened an emergency meeting and ripped into his new colleagues for letting pay get totally out of hand…Outraged, Dimon announced he was slashing comp for hundreds of staff positions by 20% to 50% over two years. “I’d tell people they were way overpaid”, Dimon recalls, “and guess what? They already knew it.” The kicker: most of the managers stayed on despite the cuts.

Can you imagine the CEO of an Australian bank doing that? Rather than reigning in salaries, Australian banks seem to be forever raising the ceiling and paying management ever increasing sums. In 2004, while still reeling from the Homeside and foreign exchange fiascos, NAB CEO John Stewart lured Ahmed Farour from rival Citibank to run NAB’s Australian operations. Since joining NAB, Farour has been paid a whopping $10.3 million in 2004 and $4.9 million in 2005.

Farour isn’t the only person being paid on a good wicket at NAB, UK CEO Lynne Peacock collected a cool $3.6 million in 2005 while John Hooper (executive manager of institutional markets) took home a handsome $2.3 million.

But perhaps Australian CEOs and boards just aren’t gutsy or shrewd enough to adopt Dimon’s tough stance on executive pay. It’s a lot easier for everyone to just keep increasing executive pay, heck, there’s nothing shareholders can really do about it anyway.

What Australian shareholders need is someone like Dimon to change the culture of executive pay. A culture that, as Fortune noted, starts at home. Dimon is allegedly so frugal “that, to the shock of family and friends, he continued to wear T-shirts with the Citigroup logo long after Citi had fired him.” Alas, with more than $15 million to splash around, it is unlikely that Ahmed Farour will be dipping into his old Citigroup wardrobe any time soon.