Summary
JPMorgan Chase & Co. (JPM) filed an 8-K on January 19, 2023, detailing the annual compensation for CEO James Dimon for 2022. Mr. Dimon's total compensation remained unchanged at $34,500,000, comprising a $1,500,000 base salary and $33,000,000 in performance-based variable incentive compensation. Notably, the variable portion is predominantly equity-based, with $28,000,000 in at-risk Performance Share Units (PSUs) directly tied to ongoing performance metrics, specifically Return on Tangible Common Equity (ROTCE). The company highlighted that 100% of Mr. Dimon's annual equity compensation is linked to these performance metrics, representing 85% of his total variable pay. The Board affirmed that no special awards were granted to Mr. Dimon in 2022 and committed to not granting any in the future, aligning with a desire for stability and a focus on long-term performance. This compensation decision was made in the context of a strong operational year for JPM, despite significant global economic headwinds. The firm reported record revenue for the fifth consecutive year ($132.3 billion) and net income of $37.7 billion, with an ROTCE of 18%. JPM maintained its dividend and a robust capital position, ending the year with a Common Equity Tier 1 ratio of 13.2%. The Board considered Mr. Dimon's leadership in navigating these challenges, maintaining market leadership, investing in strategic initiatives, and fostering client relationships, alongside investor feedback and the firm's overall financial health.
Key Highlights
- 1CEO James Dimon's total compensation for 2022 is unchanged at $34,500,000.
- 2Compensation structure remains consistent: $1.5 million base salary and $33 million in variable incentive compensation.
- 385% of Mr. Dimon's variable pay ($28 million) is in the form of at-risk Performance Share Units (PSUs) tied 100% to performance metrics.
- 4The primary performance metric for PSUs is Return on Tangible Common Equity (ROTCE) with absolute and relative goals.
- 5The Board committed to not granting any special awards to Mr. Dimon in the future.
- 6JPMorgan Chase reported record revenue of $132.3 billion and net income of $37.7 billion for 2022.
- 7The firm maintained a strong capital position with a CET1 ratio of 13.2% and significant liquidity.
- 8Compensation decisions considered holistic performance, investor feedback, and overall firm stability during economic uncertainty.