(Bloomberg) – Jamie Damon was handed a rare defeat from shareholders after they turned down a salary offer, just months after the board announced lucrative incentives for JPMorgan Chase & Co. chief.
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Salary packages for Dimon and other company leaders were backed by only 31% of shareholders, the bank announced at its annual meeting on Tuesday. Preliminary results mark the first time since 2009 – when JPMorgan began seeking investors’ votes on wages – that most shareholders have refused to support the firm’s move.
The rate is a significant blow to the billionaire dean of Wall Street, who was given a special bonus by his lieutenant Daniel Pinto last year to keep them around. Prominent shareholder advisors are Glass, Lewis & Co. and Institutional Shareholder Services Inc. He took particular note of the rewards, advising investors to reject the pay package – a move that could send a message of dissatisfaction not only with executive compensation but also with the company’s performance. . Shares of JPMorgan have fallen nearly 23% this year, the worst performance among Wall Street giants.
Joe Evangelisti, a spokesman for the company, said the board of New York-based JPMorgan takes shareholders’ feedback “very seriously” and will continue to work with investors on pay. The resolution was consultative, meaning the vote was non-binding. In general, shareholders overwhelmingly supported the company’s offer, and the offer of compensation was the only such move rejected at JPMorgan’s annual meeting.
Shareholder rejection of such a resolution may also change. Last year, rival Goldman Sachs Group Inc. reversed its position on the effect of the forced arbitration after nearly half of investors backed a shareholder proposal.
“This is a very unusually low vote,” Alan Johnson, managing director of compensation consultant Johnson Associates Inc., said in an interview with JPMorgan Tally. Although the bank was probably not surprised that some shareholders did not like its pay offer, the results were “a little embarrassing”.
Since 2009, JPMorgan has received over 90% support for compensation. Prior to Tuesday, the lowest level of approval was a 2015 resolution that won only 61% of the support. At the time, the board said it would consider changes to the compensation policy for top executives.
In contrast, Goldman Sachs’ 2021 pay package, which included a এক 50 million one-time bonus for Chief Executive Officer David Solomon and his top deputies, passed with approximately 82% approval. Glass Lewis also advised investors to reject the firm’s executive compensation.
Opposing the JPMorgan executive-pay resolution for 2021, Glass Lewis noted that the পুরস্কার 52.6 million in alternative rewards given to Dimon, chairman and CEO of JPMorgan, was “almost double his regular equity grant for 2021” and much of his $ 84 million. Represents. Annual salary. The firm also criticized a total of .3 53.3 million in compensation for Pinto, including about $ 27.9 million in alternative rewards.
Evangelist said after the vote, “The board said it wanted to be a single award that reflects exemplary leadership.” “The prize will not be awarded for five years and Damon will not be allowed to sell any vested shares for an additional five years. The special award was extremely rare – the first in more than a decade for Mr. Dimon – and it reflects exemplary leadership and extra enthusiasm for a successful leadership transition. “
Pinto, 59, recently became the sole president and COO of JPMorgan until Smith retired late last year after sharing these titles with Gordon Smith. The pair served as acting co-CEOs when Dimon was removed by emergency heart surgery just as the coronavirus epidemic was wreaking havoc on the market. In another emergency, Pinto is widely seen as a possible replacement for the 66-year-old Damon, but the chances of an orderly change are slim.
In response to a shareholder’s question on Tuesday, Dimon said he was feeling “great” after the 2020 surgery. Whenever asked how long he would be CEO, he joked that he would stay for another five years. Damon, who has been in the lead since late 2005, defended his compensation last year, calling it part of a broader “umbrella” designed to retain senior management.
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