A top proxy advisor is urging JPMorgan Chase shareholders to reject bank boss Jamie Dimon’s proposed compensation package – arguing that payday is out of step with the institution’s performance.
Proxy advisory firm Glass, Lewis & Company noted that the $52.6 million one-time grant in option awards included in Dimon’s salary was “excessive.”
The report was also critical of a grant made to JPMorgan Chase COO Daniel Pinto, who received $53.3 million in total compensation, including $27.8 million in option awards.
“Excessive one-time grants to the CEO and COO come amid poor relative performance amid long-standing concerns about the company’s executive pay program,” the advisory firm said in a report to shareholders.
“Lack of performance-based implied stipulations associated with awards while the company has not achieved adequate alignment between executive pay and performance warrants shareholders’ scrutiny.”
“As a result, we do not believe that shareholders should support this proposal,” the firm said.
Dimon, the 66-year-old longtime chairman and CEO of JPMorgan Chase, received $84.4 million in total compensation for fiscal 2021. This amount included a $52.6 million option award, a $25 million stock award, a $5 million bonus and basic pay. $1.5 million.
JPMorgan Chase did not immediately return a request for comment.
Bloomberg was the first to report on the advisory firm’s recommendation.
“Given the size of the grant, a major concern is the lack of stringent performance-based vesting conditions that reward executives for consistent performance during the vesting period,” said Glass, Lewis & Co.
JPMorgan defended the compensation structure in its annual proxy statement — noting that special grants were necessary to retain Dimon.
“The special award awarded to Mr. Dimon reflects the willingness of the Board to continue to lead the firm for more years,” the proxy filing said.
“In creating the special award, the Board considered the importance of Mr. Dimon’s firm’s continued, long-term leadership, leadership continuity, and management succession planning in the midst of a highly competitive landscape for executive leadership talent.”
Shares of JPMorgan Chase are down about 24% over the past 12 months. The recession coincides with a downturn in the broader market as inflation and geopolitical tensions such as the Russia-Ukraine war weigh on stocks.
Dimon made a dire warning about the outlook for the global economy – arguing that the Ukraine war was a greater long-term risk to growth than the Federal Reserve’s plan to hike interest rates.
“The Cold War is back,” Dimon said during an interview with Bloomberg. “Allies have to be united not only for military purposes but also for global, economic, strategic investment purposes so that we can have a safer world. If we don’t do that, Ukraine, you can see it all over the world. You could see the form of anarchy.”
JPMorgan Chase’s annual shareholder meeting is scheduled for May 17. Since the resolution is non-binding, a shareholder vote against the measure will not prevent Daemon from receiving paydays.
Top publicly traded companies regularly face external pressure to cut executive pay. Apple CEO Tim Cook faced similar scrutiny earlier this year ahead of the tech giant’s annual meeting – shareholders ultimately voted in favor of his pay package despite some calls for disapproval.