The influential proxy adviser Institutional Shareholder Companies has carried out a uncommon U-turn and is recommending JPMorgan Chase shareholders help the financial institution’s pay plan for high executives together with Jamie Dimon.
ISS spearheaded resistance to the financial institution’s pay insurance policies in 2022 and final week suggested that traders oppose them once more throughout a “say on pay” vote on the lender’s annual assembly on Tuesday.
Nonetheless, ISS informed shoppers this week it had determined to change its suggestion after utilizing inaccurate knowledge when benchmarking the financial institution’s pay in opposition to friends. The change was first reported by Bloomberg.
In a letter to ISS final week, JPMorgan argued ISS had incorrectly analysed pay knowledge from personal fairness agency Blackstone, which triggered the damaging suggestion for JPMorgan.
In its up to date pay suggestion, ISS mentioned there was now an affordable alignment between JPMorgan’s pay and the financial institution’s efficiency, however added it nonetheless had issues over how bonuses had been calculated and disclosed.
JPMorgan, the most important US financial institution by belongings, paid Dimon $34.5mn for 2022, unchanged from the prior 12 months after the lender reported document revenues of $128.7bn and internet earnings of $37.7bn.
JPMorgan declined to remark.
JPMorgan shareholders final 12 months voted in opposition to the pay plans for the financial institution’s administration, primarily as a consequence of one-off awards given to Dimon, its longtime chief government, and president Daniel Pinto. Vanguard, JPMorgan’s largest shareholder, joined the revolt.
The vote was non-binding however JPMorgan subsequently mentioned it might not give Dimon particular awards sooner or later.
Through the years, Dimon has criticised what he views as “lazy” shareholders who observe suggestions by ISS and Glass Lewis, which give voting recommendation to traders in publicly traded firms. Final 12 months, Dimon informed shareholders they need to “do [their] personal homework”.
In its proxy assertion to shareholders forward of the annual assembly, JPMorgan disclosed that Pinto was paid $28.5mn and asset and wealth administration boss Mary Erdoes earned $25.5mn. Marianne Lake and Jennifer Piepszak, co-CEOs of the financial institution’s client and neighborhood banking division and potential successors to Dimon, every earned $17.5mn.
Shareholders have usually signed off on packages for high financial institution executives this 12 months, with many lenders receiving increased approval scores throughout “say on pay” than they did in 2022.
A notable exception was Financial institution of America, the place the share of shareholders voting on the annual shareholder assembly final month dropped to 69 per cent from 95 per cent a 12 months earlier.
Extra reporting by Stephen Gandel