Institutional Shareholder Services reversed course Tuesday on an earlier recommendation that JPMorgan Chase shareholders oppose the bank’s executive compensation plan.
The proxy adviser is now suggesting investors cast a “cautionary vote” in favor of the pay strategy at the bank’s annual shareholder meeting May 16, Bloomberg reported.
The turnaround comes after JPMorgan wrote ISS on Monday, asserting the proxy adviser had incorrectly analyzed pay data from private-equity firm Blackstone when measuring JPMorgan’s compensation against that of its peers, according to the Financial Times.
ISS on Tuesday said JPMorgan’s pay and its performance were reasonably aligned, but that the proxy adviser still had concerns over how the bank calculates and discloses bonuses.
This is hardly the first pushback JPMorgan’s pay plans have received. Shareholders last year rejected the bank’s compensation plan for its six top executives, largely over a “special award” that granted CEO Jamie Dimon $52.6 million in share options.
The measure received 31% support last year but was nonbinding — meaning the bank was not required to follow shareholders’ recommendation.
But in a proxy statement last month, JPMorgan pledged “unequivocally” not to grant Dimon any future special awards and to include direct performance conditions in the “rare and appropriate circumstances” that another executive receive such a one-time payout.
Proxy recommendations, likewise, have earned little love from Dimon. The longtime JPMorgan CEO last June blasted investors who vote based on the advice of firms such as ISS and Glass Lewis.
“If that’s how you vote, shame on you. I mean seriously, you should be embarrassed, OK? And do your own homework,” he said at the Bernstein Strategic Decisions Conference last year.
JPMorgan paid Dimon $34.5 million for 2022, the bank disclosed in January. That’s the same level of compensation he received a year earlier. JPMorgan listed compensation levels for its other top executives in last month’s proxy materials:
- Daniel Pinto, the bank’s president, received $28.5 million for 2022.
- Mary Erdoes, the bank’s asset- and wealth-management chief, received $25.5 million.
- Marianne Lake and Jennifer Piepszak, co-CEOs of the bank’s consumer and community banking division, each received $17.5 million.
- Jeremy Barnum, the bank’s CFO, received $12 million.
In terms of the bank’s performance, JPMorgan last year notched records in revenue and profit — $128.7 billion and $37.7 billion, respectively.
With 2022 being an exception, JPMorgan’s compensation proposals typically have found backing from 90% or more of investor votes.
At least one of JPMorgan’s competitors saw a marked drop in shareholder participation this year. Just 69% of shareholders voted at Bank of America’s annual meeting last month, the Financial Times reported.
JPMorgan declined to comment Wednesday to the publication.
