Top shareholder advisory firm U-turns to back JP Morgan pay plan after misinterpreting data
Influential shareholder advisory firm Institutional Shareholder Services (ISS) has U-turned on its initial recommendation to reject the pay packages for senior executives at JP Morgan.
Just last week ISS had urged shareholders to vote against executive’s pay packages.
However, JP Morgan wrote a letter to the firm on Monday, arguing it had wrongly interpreted data from private equity firm Blackstone.
Ahead of the bank’s annual meeting next Tuesday, ISS has reversed its decision, admitting it had used misleading information when benchmarking the bank’s pay against peers. The news was first reported by Bloomberg.
With updated data, ISS now said there was a reasonable alignment between the pay package of executives and the bank’s performance. However, it signalled concern about how bonuses were calculated.
Last year, in a non-binding vote, shareholders voted against JP Morgan’s proposed pay package, with only 31 per cent of shareholders voting in favour of the proposals. Under the plan, the bank’s top six executives would have received $201.8m (£160.9) between them.
The proposals included significant one-off awards to chief executive Jamie Dimon and its president Jamie Pinto.
Although the vote was non-binding, JP Morgan has not awarded Dimon special awards. Last year he was paid $34.5m (£27.5).
The bank saw record revenue in 2022, but its profit slipped 22 per cent to $37.7bn as it suffered from a slowdown in investment banking.
In the first quarter of this year profit soared 52 per cent to hit $12.6bn as the Wall Street giant weathered turmoil in the banking sector.
JP Morgan also saw a $37bn increase in deposits compared to the prior quarter suggesting it had been a beneficiary of the flight to safety following the collapse of Silicon Valley Bank. Its preeminent position amongst US lenders was demonstrated by its emergency acquisition of First Republic a few weeks ago.
JP Morgan were contacted for comment.