JPMorgan Chase CEO Jamie Dimon chaired the Business Roundtable in 2019, when the Roundtable's pro-stakeholder capitalism corporate purpose statement was adopted, and who was widely credited with having promoted it, suffered a major setback recently.
JP Morgan Chase’s 2022 proxy statement made much of Chase’s commitment to “sustainable business practices,” “including our engagement in communities and commitment to provide economic opportunity to underserved communities, and address environmental and social issues such as climate change and racial equity” and “creating a diverse, inclusive, respectful and accountable environment.” To be sure, the proxy statement also stressed how Chase’s pay practices “focus on risk-adjusted performance,” but that claimed focus had not prevented Chase from underperforming both the S&P 500 and the KBW Nasdaq Bank Index in 2021. Despite that underperformance, Chase paid Dimon $34.5 million in standard compensation for 2021 and gave him a one-time $50 million retention bonus.
In 2022, when Dimon’s pay package was subject to a say on pay vote, both ISS and Glass Lewis recommended a negative shareholder vote because Dimon’s pay package was inadequately linked to firm performance. At the annual meeting, unlike typical shareholder say on pay votes, which receive 90%-plus favorable votes, only 31% of Chase’s shares were voted in favor of the bank’s pay plans.
Although it would be pure speculation to suggest that Dimon and Chase’s high profile commitment to ESG was a factor in the negative shareholder vote, it is safe to say that that commitment did not prevent shareholders from objecting to Dimon’s pay.
