By Emily Glazer
Proxy-advisory firms Institutional Shareholder Services Inc. and
Glass Lewis & Co. recommended J.P. Morgan Chase & Co.
shareholders vote against the company on matters including bank
chief James Dimon's pay package, according to its 2015 report on
the bank.
In reports published within the past week, ISS and Glass Lewis
disagreed with the bank board's recommendations on senior-executive
pay. ISS endorsed the board's approach the past two years. The
advisory firms also recommended voting for an independent chairman
of J.P. Morgan--something they both last suggested in 2013.
ISS and Glass Lewis recommended a vote for all the 11 directors
of the largest U.S. bank by assets. But they said they are
recommending a vote against the pay package of Mr. Dimon and other
top executives.
The ISS rationale wasn't because the pay was too high-- Mr.
Dimon's compensation for 2014 of $20 million was flat from the
prior year. Instead, ISS and Glass Lewis each said the bank didn't
outline the performance criteria for its pay packages clearly
enough.
ISS, whose recommendations are relied upon or taken into account
by some large fund shareholders, said J.P. Morgan "significantly
weakened" the performance basis of Mr. Dimon's pay be reintroducing
a cash bonus "without compelling rationale."
ISS added that company performance is mixed, performing better
than peers by some metrics but lagging the S&P 500 in
stock-price performance recently.
Glass Lewis added that the bank's executives are paid more than
the median compensation for a group of peer companies.
ISS again recommended that J.P. Morgan be required to have an
independent board chairman. "For a company of this size and
complexity and in consideration of past concerns with risk
oversight and legal concerns, and current concerns with CEO pay,
shareholders would benefit from the greater oversight that could be
realized by an independent board chairman," according to the
report.
ISS recommended voting to amend the bank's bylaws on calling for
special meetings, because a 10% threshold is "a more reasonable
threshold for a company of this size and ownership structure than
the current threshold, " according to the report. The current
threshold is 20% of shareholders with at least one-year of
continuous stock ownership. It recommended voting for a report on
certain vesting program because shareholders could benefit from
more information about compensation.
ISS and Glass Lewis also recommended voting for more disclosure
on the firms' pay clawback policies.
Write to Emily Glazer at emily.glazer@wsj.com
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