The influential Institutional Shareholder Services chief executive made a rare U-turn and recommended that JPMorgan Chase shareholders support the bank’s compensation plan for top executives, including Jamie Dimon.
The ISS led resistance to the bank’s pay policies in 2022 and last week advised investors against it again during a “say on pay” vote at the lender’s annual meeting on Tuesday.
However, this week ISS told clients it had decided to change its recommendation after using incorrect data when benchmarking the bank’s compensation against peers. The change was first reported by Bloomberg.
In a letter to ISS last week, JPMorgan said ISS had incorrectly analyzed payroll data from private equity firm Blackstone, which triggered the negative recommendation for JPMorgan.
In its updated salary recommendation, ISS said there was now a reasonable alignment between JPMorgan’s compensation and the bank’s performance, but added it still had concerns about how bonuses were calculated and disclosed.
JPMorgan, the largest US bank by assets, paid Dimon $34.5 million for 2022, unchanged from a year earlier after the lender reported record revenues of $128.7 billion and net income of $37.7 billion.
JPMorgan declined to comment.
JPMorgan shareholders last year voted against compensation plans for the bank’s management, mainly due to one-time bonuses awarded to Dimon, its longtime chief executive, and chairman Daniel Pinto. Vanguard, JPMorgan’s largest shareholder, joined the revolt.
The vote was not binding, but JPMorgan later said it would not award Dimon special awards in the future.
Over the years, Dimon has criticized what he sees as “Lazyshareholders following the recommendations of ISS and Glass Lewis, which provide voting advice to investors in publicly traded companies. Last year, Dimon told shareholders that Should “Do [their] own duties”.
In its proxy statement to shareholders ahead of its annual meeting, JPMorgan revealed that Pinto was paid $28.5 million and wealth management chief Mary Erdoes earned $25.5 million. Marianne Lake and Jennifer Piepszak, co-CEO of consumer and community banking and prospective bank successors at Dimon, each earned $17.5 million.
Shareholders have generally signed packages for top bank executives this year, with many lenders receiving higher approval ratings during “pay say” than in 2022.
One notable exception was Bank of America, where the percentage of shareholders who voted at its annual shareholder meeting last month dropped to 69% from 95% a year earlier.
Additional reporting by Stephen Gandel
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