Summary
JPMorgan Chase & Co. (JPM) announced two significant governance-related developments in an 8-K filing on October 26, 2015. The Board of Directors has directed management to prepare an amendment to the company's by-laws to allow shareholders proxy access for director nominations. This "3/3/20/20" structure would permit shareholders owning 3% of stock for at least three consecutive years, or a group of up to 20 shareholders meeting this threshold, to nominate up to 20% of the Board (at least two directors). This move reflects engagement with shareholder views on proxy access. Furthermore, the Board adopted a Clawback Disclosure Policy, which outlines the company's intention to disclose any instances where incentive compensation is recouped from senior executives. This disclosure will be made in the annual proxy statement if the clawback event has already been publicly disclosed by the firm, or if no clawback occurred in a given year. The policy aims to provide transparency regarding executive compensation recovery, subject to certain limitations to avoid legal or regulatory complications, and is also informed by shareholder feedback.
Key Highlights
- 1JPMorgan Chase Board to consider by-law amendment for shareholder proxy access.
- 2Proposed proxy access structure: shareholders owning 3% for 3 years can nominate up to 20% of the Board (minimum two directors).
- 3Up to 20 shareholders can collectively meet the ownership threshold for proxy access.
- 4Board adopted a Clawback Disclosure Policy regarding executive incentive compensation.
- 5Policy mandates disclosure of compensation clawbacks from senior executives in annual proxy statement if event is already public.
- 6Disclosure will also indicate if no compensation was clawed back in a given year.
- 7Policy is subject to potential limitations for legal, regulatory, or privacy reasons.