& Co. is giving Chief Executive
1.5 million reasons to stay at the bank for five more years.
The bank’s board of directors granted Mr. Dimon, 65 years old, a retention bonus in the form of 1.5 million options that he can exercise in 2026, according to a regulatory filing Tuesday. The award requires Mr. Dimon to stay at the bank the whole time and hit certain performance targets to receive the full amount.
The move is meant to send a message to those inside and outside the bank that Mr. Dimon isn’t going anywhere soon, according to people familiar with the matter. JPMorgan’s directors had given Mr. Dimon a similar award in 2008, and in recent years had been discussing how to reaffirm their desire to keep him, the people said. The coronavirus pandemic and Mr. Dimon’s emergency heart surgery in early 2020 put those conversations on hold, they said.
“This special award reflects the board’s desire for Mr. Dimon to continue to lead the firm for a further significant number of years,” the bank said in the filing.
The options are in addition to Mr. Dimon’s regular compensation. He received $31.5 million in compensation last year—the same as 2019—mostly in restricted stock he gets if the bank hits certain performance hurdles. In 2020, he was overtaken as the highest-paid big-bank CEO by Morgan Stanley’s
who made $33 million.
Mr. Dimon can’t sell any shares he gets from exercising the new options until 2031, according to the filing. The current value of the award is around $50 million, according to Andy Restaino of Technical Compensation Advisors. Their ultimate value will be determined by the difference in the stock at the time he exercises his options and the stock price this week.
Mr. Dimon has amassed more than 8.3 million JPMorgan shares, a position that is now worth around $1.27 billion. That doesn’t include awards he has been granted but not yet earned.
Mr. Dimon has run the bank since 2005 and has said that his retirement isn’t a near-term event. The bank’s board earlier this year indicated that it wanted him to stay on for five to seven years, people familiar with the matter have told The Wall Street Journal.
It has been a topsy-turvy year for America’s largest bank. JPMorgan, which spent much of 2020 socking away funds to prepare for a painful recession and a wave of loan defaults, instead posted record profits. Its investment bankers just notched their best quarter on record. The bank’s stock fell sharply early in the pandemic and rebounded to record levels. Shares are up 20% in 2021.
Mr. Dimon himself rebounded from a near-fatal heart condition. In March 2020, he rushed to the hospital in New York for emergency surgery to repair an acute aortic dissection. Mr. Dimon has since made a full recovery; follow-up scans have revealed no lasting damage.
JPMorgan in May tapped
to lead its sprawling consumer-banking operation, which serves half of all U.S. households and accounts for roughly 40% of the bank’s profit. The reshuffling came two years after the bank put them among the front-runners to one day lead the company.
Ms. Lake joined JPMorgan in 1999. Before taking on consumer lending—where she oversaw credit card, mortgage and auto lending—she was the bank’s finance chief. Ms. Piepszak, a 27-year JPMorgan veteran, was running the bank’s credit-card business when she was tapped to be finance chief in the 2019 reshuffling.
The move leaves
the head of corporate and investment banking, the only executive primed to take over for Mr. Dimon should he step down sooner than planned.
the bank’s co-president with Mr. Pinto and one of Mr. Dimon’s closest allies, is retiring at the end of the year. Messrs. Pinto and Smith together ran the bank when Mr. Dimon was recovering from heart surgery.
The options grant leaves one exit strategy open for Mr. Dimon: He can exercise them if he leaves the bank for an elected or unelected government job, according to the regulatory filing.
Mr. Dimon’s political ambitions are a popular topic of conversation on Wall Street. He makes frequent trips to Washington, D.C., armed with policy recommendations and reams of the bank’s own data. He has called for education reform; job-training programs and tax changes that lift the take-home pay for lower-income workers; infrastructure spending and litigation reform; and tweaks to banking regulation.
In his annual letter to shareholders this year, Mr. Dimon called for a yearslong, nationwide “Marshall Plan,” a reference to the U.S. initiative to help Western Europe rebuild after World War II.
Still, Mr. Dimon has repeatedly said he has no plans to one day run for president. As for a cabinet position or other high-ranking government job, he has said he would consider it if offered.
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