JPMorgan Chase chief executive Jamie Dimon earned as much in a day as the typical employee at his bank took home in the whole of last year, putting him near the top of an emerging league table of big bank CEO pay.
In an annual proxy filing after the market close on Wednesday, the biggest US bank by assets said that its chairman and CEO was paid $28.3m last year, or 364 times the median employee, who received $77,799, including firm-paid benefits.
Mr Dimon’s pay ratio of 364 times the median worker puts him second in the list for the big banks, according to Autonomous Research, behind Citigroup chief Mike Corbat, whose pay of $17.8m last year was 369 times the median worker. Charlie Scharf of Bank of New York Mellon, a protégé of Mr Dimon who arrived at BNY in the summer of last year, ranks third, with a $20m package 354 times the average worker.
Amount awarded for Jamie Dimon’s ‘residential and related security’
The median ratio for the listed US banks to have reported so far is 135 times, according to Autonomous.
JPMorgan declined to comment.
The disclosures of pay multiples, mandated by the Dodd-Frank Act of 2010, finally came into effect for all listed US companies this year. Critics say such figures are a crude metric, telling investors very little about the composition of a company’s workforce or the particular ways in which it has identified the “median” worker. But advocates say the tool is necessary as a way to restrain pay for top executives, which has consistently outpaced gains for lower-ranked workers.
To arrive at a median pay number JPMorgan included its top 10 most populous countries, representing about 97 per cent of its 253,500 staff. The bank annualised the salary portion of pay for employees who were hired during 2017; but did not make any full-time equivalent adjustments to part-time, temporary and seasonal workers.
Mr Dimon’s total award of $28.3m included perks such as personal use of corporate aircraft ($73,921), personal use of cars ($29,848) and the cost of “residential and related security” ($48,259). But the bulk of his pay came in stock awards ($21.5m), bumped up after a year of record annual net income of $26.5bn, excluding the effects of the tax reform, on record revenues of $104bn.
JPMorgan made a switch to using so-called performance share units as part of variable pay for top managers in 2016, in response to a challenge by investor groups at its annual meeting a year earlier. At the time, more than a billion votes — a record 38 per cent — were cast against the bank’s pay policy after ISS and Glass Lewis, the proxy advisory firms, called for stronger ties between pay and performance.
Still, the bank’s new formulation has prompted some grumbling among shareholders, said Brian Foran, analyst at Autonomous. For Mr Dimon to get the maximum payout, he noted, JPMorgan needs to hit a 17 per cent return on tangible common equity. But a near-maximum payout can be achieved as long as the bank is above 6 per cent and in the second quartile of its peer group, which includes several struggling European banks.
On Wednesday the bank also disclosed that Mr Dimon now owns 9.76m shares in the lender in total; a stake worth just over $1.1bn at today’s prices. The CEO has never sold any of the stock he has been granted in his 14-year career at JPMorgan, and has sometimes taken advantage of dips in the price to buy more.
Another board member, James Crown, has an even bigger stake in JPMorgan, worth $1.4bn. Mr Crown, the 64 year-old scion of a Chicago family of industrialists, was a big investor in Bank One, which recruited Mr Dimon to run the bank in March 2000.
Today the Crown family holdings span the ski resort of Aspen, stakes in The New York Yankees and The Chicago Bulls, and one-fifth of Rockefeller Center, according to Forbes.
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