JPMorgan investors hand Dimon a rare rebuke and oppose $53 million bonus

JP Morgan Chase & Co. Chairman and CEO Jamie Dimon testifies before the House Financial Services Committee on the accountability of megabanks at the Rayburn House office building on Capitol Hill in Washington, DC, on April 10, 2019.

Mandel Ngan | AFP | Getty Images

JPMorgan Chase CEO Jamie Dimon received a rare rebuke on Tuesday after shareholders rejected a huge retention bonus announced by the bank last year.

Only 31% of investors attending the New York-based bank’s annual shareholder meeting backed the $52.6 million award that was part of Dimon’s 2021 compensation package.

The bonus, in the form of 1.5 million options that Dimon can exercise in 2026, was designed to keep the CEO and chairman at the helm of JPMorgan for another five years. Its estimated value, indexed to last year, fluctuates and depends on the appreciation of the bank’s share price, according to bank spokesman Joe Evangelisti.

“The special award was extremely rare – the first in more than a decade for Mr. Dimon – and it reflected exemplary leadership and added incentive for a successful leadership transition,” Evangelisti said.

Although the results of the so-called ‘pay’ vote are not binding, JPMorgan’s board said it takes investor feedback ‘seriously’ and wants Dimon’s bonus to be an event. punctual, he added.

The disapproval was the first time JPMorgan’s board faced a negative vote on compensation since the measures were introduced more than a decade ago. Dimon, 66, has led JPMorgan since 2006, helping it through several crises and growing it into the largest US bank by assets.

Earlier this month, proxy advisory firms including Glass, Lewis & Co recommended shareholders reject the pay package for Dimon and his top lieutenant. Including the retention bonus, Dimon’s salary last year was valued at $84.4 million.

“Excessive one-time grants to the CEO and COO amid tepid relative performance add to long-standing concerns about the company’s executive compensation package,” Glass Lewis said in its report.

Dimon and his other directors received support from investors, which is more typical of a shareholder vote at a large corporation.

Glass Lewis had also advised shareholders to reject compensation for rival CEO David Solomon, who heads Goldman Sachs and received a $30 million retention bonus in October. In this case, however, about 82% of Goldman shareholders voted in favor of management.

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