JPMorgan Chase & Co. shareholders should vote against 2014 pay packages for Chief Executive Officer Jamie Dimon and other leaders, Institutional Shareholder Services said.
The bank, the largest in the U.S. by assets, lacks preset goals to determine compensation and didn’t provide a “compelling rationale” for giving Dimon his first cash bonus in three years, the proxy-advisory firm said in report dated May 5. The pay relative to performance and peers generated concerns on a quantitative basis for a fourth straight year, ISS said.
JPMorgan shareholders can ratify or disapprove of executives’ pay packages in a non-binding vote when the New York-based lender holds its annual meeting on May 19 in Detroit. While the bank had record net income in 2014, the firm’s compensation committee has sometimes highlighted operating performance and other times share price gains to justify Dimon’s awards, ISS said.
“It is unclear what metrics the committee intends to incent or reward, or in what capacity, if any, lower performance may have negatively affected pay,” ISS said in the report. “The company is now one of the few, if not the only, large financial institution that does not tie any element of CEO pay to achievement of goals for a specific metric or metrics.”
ISS also recommended voting for shareholder proposals that would require an independent board chairman and a lower threshold of ownership to call a special shareholder meeting.
Joe Evangelisti, a spokesman for JPMorgan, declined to comment beyond the firm’s proxy statement. In it, the board said it took into account historical performance in determining pay and “focused on the firm’s strong results in 2014, continuing its track record of successfully adapting to an evolving and challenging landscape.”