Jamie Dimon, chairman, and chief executive officer of JP Morgan Chase & Co., testifies before the House Financial Services Committee on accountability for megabanks on April 10, 2019, in the Rayburn House Office Building on Capitol Hill, Washington, D.C.
Jamie Dimon, the chief executive officer of JPMorgan Chase, received a rare rebuke on Tuesday due to shareholder disapproval of his massive retention bonus announced by the bank the previous year.
At the annual shareholder meeting of the New York-based bank, only 31 percent of investors supported the $52.6 million award that comprised Dimon’s 2021 compensation package.
The bonus, which consists of 1.5 million options exercisable by Dimon in 2026, is intended to keep the CEO and chairman of JPMorgan at the helm for another five years. According to bank spokesman Joe Evangelisti, its estimated value, which was determined a year ago, fluctuates and depends on the bank’s share price appreciation.
Evangelisti stated, “The special award was extremely rare — Mr. Dimon’s first in more than a decade — and it reflected exemplary leadership and added incentive for a successful leadership transition.”
Despite the fact that the results of the so-called “say on pay” vote are nonbinding, JPMorgan’s board stated that it takes investor feedback “seriously” and intended Dimon’s bonus to be a one-time event, he added.
Since the introduction of pay-watch measures more than a decade ago, this was the first time JPMorgan’s board voted against compensation. Dimon, 66, has led JPMorgan since 2006, guiding it through multiple crises and transforming it into the largest bank in the United States by assets.
Earlier this month, proxy advisory firms including Glass, Lewis & Co. advised shareholders to vote against Dimon and Daniel Pinto’s compensation package. Last year’s total compensation for Dimon, including the retention bonus, was $84.4 million.
In its report, Glass Lewis stated, “Excessive one-time grants to the CEO and COO amid mediocre relative performance exacerbate long-standing concerns regarding the company’s executive pay program.”
Investors supported Dimon and his fellow directors in a manner more typical of a shareholder vote at a large corporation.
Glass Lewis also recommended shareholders vote against the compensation of rival CEO David Solomon, who leads Goldman Sachs and received a $30 million retention bonus in October. In this instance, however, approximately 82% of Goldman’s shareholders supported management.