The Beginning of the End for Jamie Dimon? JPMorgan’s CEO Must Face the Revolt of Shareholders.
The man who always says he plans to leave in five years could leave sooner.
Is Jamie Dimon's star fading? At the annual general meeting on Tuesday, May 17, 2022, JP Morgan's shareholders only approved 31% of the resolution on the compensation of the CEO of the first American bank. This one planned to grant Jamie Dimon, for the year 2021, a “special bonus” of 52.6 million dollars, in stock options, conditional to his presence for several more years in the company.
This bonus was in addition to his usual compensation for the past year: a base salary of 1.5 million dollars and 33 million dollars in bonuses. The resolution proposed the same type of package for the number two of the bank Daniel Pinto, for 53.3 million dollars. This is the first time since 2009 when resolutions on salaries began to be presented to shareholders, that they did not adopt it with a clear majority.
JPMorgan's shareholders followed the advice of the two proxy advisors Glass, Lewis & Co, and ISS, who recommended voting against, judging the amounts excessive.
The vote is taken “very seriously”, said a JP Morgan spokesman to the Bloomberg agency. However, it is only advisory and therefore not binding on the board of directors. The bank tried to defend the spirit of the text presented. “The award will not vest for five years and Dimon will not be allowed to sell vested shares for another five years,” spokesman Joe Evangelisti said.
With a less buoyant business going into 2022, and a more uncertain environment, JP Morgan has been falling on the stock market - by almost 27% since the beginning of the year:
A little more heavily than its competitors Goldman Sachs or Citigroup.
Is this the beginning of the end for the man who always says he plans to leave in five years?
At the helm of the bank since 2005 and despite health problems in 2020, Jamie Dimon, 66, continues to repeat, for years, that he plans to let go of the reins of the bank “in five years”. For a long time the best-paid banker of the place, he has been overtaken in 2020 by the CEO of Morgan Stanley, James Gorman, while having amassed a fortune worthy of a successful entrepreneur - it would reach 1.6 billion dollars according to Forbes.
The subject could come up again next week, at an investor day during which JP Morgan is to give an update on its strategy and prospects. Mike Mayo, one of the most renowned analysts in the U.S. banking sector, has already put the pressure on, saying on Monday 16 May 2022 that he expects the bank to demonstrate that its “superior standards for strategic and financial discipline are intact”. Financial observers were mainly concerned, earlier this year, about the pace of spending planned by the bank.
This is a matter for Jamie Dimon, whose reign at the head of JPMorgan may end sooner than he had anticipated.
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