The influential proxy adviser Institutional Shareholder Services has carried out a uncommon U-turn and is recommending JPMorgan Chase shareholders assist 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.
However, ISS instructed purchasers this week it had determined to modify its advice after utilizing misguided information when benchmarking the financial institution’s pay towards friends. The change was first reported by Bloomberg.
In a letter to ISS final week, JPMorgan argued ISS had incorrectly analysed pay information from personal fairness agency Blackstone, which triggered the detrimental advice for JPMorgan.
In its up to date pay advice, ISS stated there was now an affordable alignment between JPMorgan’s pay and the financial institution’s efficiency, however added it nonetheless had considerations over how bonuses had been calculated and disclosed.
JPMorgan, the biggest US financial institution by property, paid Dimon $34.5mn for 2022, unchanged from the prior yr after the lender reported document revenues of $128.7bn and internet earnings of $37.7bn.
JPMorgan declined to remark.
JPMorgan shareholders final yr voted towards the pay plans for the financial institution’s administration, primarily on account of one-off awards given to Dimon, its longtime chief govt, and president Daniel Pinto. Vanguard, JPMorgan’s largest shareholder, joined the revolt.
The vote was non-binding however JPMorgan subsequently stated it could not give Dimon particular awards sooner or later.
Over the years, Dimon has criticised what he views as “lazy” shareholders who observe suggestions by ISS and Glass Lewis, which offer voting recommendation to traders in publicly traded firms. Last yr, Dimon instructed shareholders they need to “do [their] own 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 group banking division and potential successors to Dimon, every earned $17.5mn.
Shareholders have usually signed off on packages for high financial institution executives this yr, with many lenders receiving increased approval scores throughout “say on pay” than they did in 2022.
A notable exception was Bank 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 yr earlier.
Additional reporting by Stephen Gandel