June 26, 2022

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JPMorgan shareholders vote on CEO Jimmy Dimon’s pay bump

The pay offer they rejected included a massive $52.6 million retention bonus as part of Dimon’s 2021 compensation package, just months after the bank’s board of directors approved the incentive. With the bonus, Damon Total compensation was $84.4 million in 2021up from $31.7 million in 2020.
But Damon may get that payment. Compensation package for 2021 and results”say on pay“Votes are non-binding. However, this is an embarrassing blow to the bank, not to mention Dimon himself, and JPMorgan’s board said it takes investor opinions ‘seriously’.”
The new compensation package is designed to keep Dimon at the helm of the bank for the next five years by giving him 1.5 million stock options maturing in 2026. Shareholders voted against it A similar $27.8 million one-time special prize package for JPMorgan Chase COO Daniel Pinto.

Less than a third of shareholders approved Dimon’s salary package at the bank’s annual meeting this week. This is the first time since 2009, when JPMorgan first began an investor vote on executive compensation, that a majority voted against such a measure. Last year, 90% of shareholders voted for the bank’s 2020 salary packages.

The rejection suggests that shareholders may be unhappy with Dimon, who has led the bank since 2006 He led JPMorgan through two recessions as it emerged to become the largest US bank by assets. Or perhaps they thought the wage increase was too high.

Two prominent acting consulting firms, Glass and Lewis & Co. and Institutional Shareholder Services, have campaigned aggressively against bonuses, arguing that the massive payday has not kept pace with the bank’s recent performance. JPMorgan shares fell more than 25% in 2022, the worst performance among large US banks.

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“Excessive one-off grants to the CEO and COO amid tepid relative performance exacerbate long-standing concerns about the company’s CEO pay program,” Glass, Lewis & Co. wrote in a report to shareholders. “The lack of performance-based vesting conditions tied to awards while the company did not adequately align executive pay and performance warrants shareholder scrutiny,” they wrote.

A JPMorgan spokesman said after the vote that the compensation package was a rare one-time payment and meant it reflected “exemplary leadership”.

Goldman Sachs 2021 pay package, meanwhile, included a one-time bonus of $50 million for CEO David Solomon and passed with shareholder approval of nearly 82%. Goldman’s stock is down about 22% in 2022.