JPMorgans Dimon faces shareholder advisory vote on $52.6 million retention award

div classBodysc17zpet90 cdBBJodivpBy David Henry and Ross Kerberp

pNEW YORK Reuters – Longtime JPMorgan Chase & Co Chief Executive Jamie Dimon will find out on Tuesday how shareholders feel about a special 52.6 million stock option award he received to stay on for five more years, which is opposed by two key investor advisory firms.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pThe extra award dished out in July was the most significant change in Dimon‘s annual pay, which faces a nonbinding vote at the bank’s online annual meeting. p

pWhile sayonpay votes are only advisory and Dimon, 66, is expected to keep the award regardless, they are closely followed as a test of investors attitudes toward executive pay, which have hardened in recent years. p

pAverage support for pay packages at S&P 500 companies was 88.3 in 2021, down from 89.6 in 2020 and 90 in 2019, according to consulting firm Semler Brossy.p

pJPMorgan has won approval from more than 90 of votes cast in its annual compensation ballots in eight of the last 12 years.p

pBut this year two major advisory firms, from which investors take their cue when voting, have recommended that they vote “no” because of the special award. p

pThe last time both Institutional Shareholder Services Inc and Glass Lewis & Co objected was in 2015. Then, only 62 of votes were cast for JPMorgans payouts, according to data firm Insightia.p

pThis year, the firms have criticized Dimons new options as lacking performance requirements for vesting.p

pJPMorgan directors have said that Dimon‘s special award “reflects the board’s desire for him to continue to lead the firm for a further significant number of years.”p

pIf Dimon, a billionaire, keeps working at the bank for five years the options will vest, although he could still receive them if he leaves to work for the government or to run for public office.p

pStock from the options must be held until 10 years after being granted.p

pThe board said it considered Dimons performance, his leadership since 2005 and “management succession planning amidst a highly competitive landscape for executive leadership talent.”p

pThe award was separate from Dimons usual annual pay package, which was up 10 to 34.5 million for 2021.p

pAmericas toobigtofail banks are following other companies with retention awards to keep their leaders from being lured away by competitors, according to Glass Lewis. p

p“The result has been another ratcheting up of CEO pay,” Glass Lewis wrote to clients about the upcoming JPMorgan vote.p

pGoldman Sachs Group Inc also gave some of its top executives special awards last year, including one to CEO David Solomon worth 17 million.p

pISS endorsed Goldman‘s compensation after concluding that Solomon’s special award is “entirely performancebased” and carries “rigorous” goals for shareholder returns. Last month, 82 of votes cast backed the pay. p

pGlass Lewis recommended voting against Goldmans compensation, citing the “excessive sizes” of the awards. p

pIn December, JPMorgan directors also gave a special 27.9 million stock option grant to Daniel Pinto, the banks chief operating officer. p

pJPMorgans board described the special awards as “onetime” and that they would not be made on a “regularly recurring basis.”p

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pp Editing by Michelle Price and Nick Zieminskip

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