JP Morgan shareholders urged to revolt against Jamie Dimon $7.4m bonus

Jamie Dimon

JP Morgan has been accused of giving its chief executive, Jamie Dimon, a $7.4m cash bonus “without compelling rationale”.

Leading corporate governance firm ISS on Wednesday advised shareholders in America’s biggest bank to revolt against Dimon’s pay package – which totals $20m – because the “large discretionary cash bonus” is not linked to the company’s performance.

“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 said in its advice to shareholders ahead of JP Morgan’s annual meeting on 19 May.

JP Morgan shareholders have regularly clashed with management over executive pay and governance. The vote on pay at the annual meeting in New York is non-binding.

ISS also advised shareholders to vote to install an independent chairman at the bank. At present Dimon is both chairman and chief executive. “Shareholders would benefit from the strongest form of independent board oversight which an independent chairman could provide,” ISS, which advises many of the world’s largest institutional investors, said in its report.

A second advisory firm, Glass Lewis, also advised shareholders to rebel against JP Morgan’s remuneration policy, which it said was “deficient in aligning pay with performance”. Glass Lewis gave JP Morgan an “F” grade for its pay-for-performance policies, down from a “D” last year.

The bank said it was not increasing the overall amount paid to Dimon, just paying a bigger proportion of it in cash as the bank had done in previous years before a string of crises hit the bank, including the $6.2bn “London Whale” trader losses.

In a circular to shareholders, the bank said Dimon’s pay was “focused on the firm’s strong results in 2014, continuing its track record of successfully adapting to an evolving and challenging landscape”.

Powered by Guardian.co.ukThis article was written by Rupert Neate in New York, for theguardian.com on Wednesday 6th May 2015 22.27 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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