JPMorgan Says 91.5% of Shareholders Approve Pay Proposal
JPMorgan Chase & Co. (JPM), the biggest U.S. bank by assets, said its executive compensation plan won the approval of 91.5 percent of shareholders in a non-binding annual advisory vote, up from 73 percent last year.
JPMorgan announced the preliminary results today at the company’s annual shareholder meeting in Tampa, Florida, where Chairman and Chief Executive Officer Jamie Dimon also addressed the $2 billion trading loss disclosed last week.
“This should never have happened,” Dimon, 56, said at the meeting, where about a dozen protesters stood outside carrying signs. “I can’t justify it.”
The board awarded $23 million in salary and bonuses to Dimon for his 2011 performance, the same amount he received for 2010. The New York-based bank reported record net income for 2011 and its stock fell 22 percent during the year.
JPMorgan’s compensation plan also awarded $14 million in salary and bonuses to Ina Drew, 55, who resigned yesterday. Her departure came four days after JPMorgan disclosed that the chief investment office that Drew oversaw lost $2 billion and may lose more. The company will consider reclaiming some of her stock awards, according to two senior executives.
“All corrective action will be taken as necessary,” Dimon said at the meeting. “Ina served the firm for more than 30 years and has been a great partner. But it’s important that we bring in new management.”
Most of the votes on compensation and other proposals were probably cast before the loss was announced, according to Nell Minow, co-owner and board member of GMI Ratings, a research firm that specializes in corporate governance.
“I don’t think that the vote will be indicative of shareholder concerns on this issue,” Minow said. “It’s unusual to have such shocking and bad news come in after most of the votes have been cast.”
Dimon read a statement about the losses at the start of the meeting and the matter was raised only in passing by shareholders who were given an opportunity to speak. Talking to reporters after the meeting concluded, Dimon said, “The buck always stops with me.”
ISS Proxy Services USA and Glass Lewis & Co., two shareholder advisory firms, recommended on April 30 that JPMorgan shareholders approve the bank’s compensation plan.
ISS said that while JPMorgan “continues to resist adopting incentive plans with pre-established goals and long-term objectives,” it added a feature “that provides both an incentive for sustained performance and some mitigation against excessive risk-taking.”
Shareholders also approved the re-election of all the directors up for a vote, with each receiving at least 86.2 percent of the ballots cast, according to preliminary results announced at the meeting. They defeated a proposal that would have split the role of chairman and CEO.
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