Dimon's Pay Jumps 35% to $27 Millionby
Package includes $20.5 million linked to bank's future returns
New performance units come after shareholders rejected pay
JPMorgan Chase & Co. boosted Jamie Dimon’s pay 35 percent, tying most of the package to future performance after a record share of investors rejected the bank’s compensation practices last year.
The bank awarded Dimon, its chief executive officer and chairman, $27 million for 2015, up from $20 million a year earlier, according to a regulatory filing Thursday. The package includes $20.5 million in performance share units, a new pay element tied to future targets. Proxy advisers had complained last year that the company lacked concrete goals for its executives. Dimon also got a $5 million cash bonus and a $1.5 million salary.
Under Dimon, who has led JPMorgan since 2006, the bank managed to increase profit last year 12 percent to a record $24.4 billion despite stagnant revenue. He accomplished that by trimming expenses almost 4 percent to $59 billion. The company’s shares climbed 5.5 percent in 2015, outperforming the 3.5 percent decline of the Standard & Poor’s 500 Financials Index.
In May, JPMorgan’s board said it was weighing changes to executive compensation after a record low percentage of shareholders approved their pay packages. Roughly 60 percent voted in favor of the measure at the annual meeting, the lowest since so-called say-on-pay proposals were started at the New York-based bank in 2009.
The new performance units “were adopted by the board of directors after considering a variety of views on compensation structure, including views gained through the firm’s extensive engagement with shareholders on the topic,” the bank said in the filing.
Proxy advisers Institutional Shareholder Services and Glass Lewis & Co. had recommended investors vote against last year’s pay resolution, saying the bank lacks preset goals to determine compensation and didn’t give a good reason for giving Dimon a $7.4 million cash bonus for 2014.
Other top executives got half of their stock awards in the new performance-linked units, and the rest in restricted shares that vest over time.
Matt Zames, the firm’s chief operating officer, and Daniel Pinto, who runs the corporate and investment bank, each got packages valued at $18.5 million, or 8.8 percent more than in 2014, according to a person with knowledge of their compensation. Mary Callahan Erdoes, who runs the bank’s wealth management division, received a 9.1 percent raise to $18 million, and Chief Financial Officer Marianne Lake got a 10 percent raise to $11 million, the person said.
The performance units are tied to JPMorgan’s return on tangible common equity over three years starting January 2016. Executives will get zero to 150 percent of the grant amount in shares, depending on the firm’s returns on an absolute basis and versus 11 financial firms. Shares have to be held for two years after being vested. The firm didn’t explain what the specific targets were.
While Dimon earned $30 million in 2007, his pay for 2015 was the highest since the financial crisis. He was paid $15.2 million for 2009 and $23 million in each of the two years that followed. For 2012, his pay was cut in half to $11.5 million after the bank’s board said he bore some responsibility for the London Whale derivatives trading debacle. He got $20 million a year for 2013 and 2014.