Yahoo Finance Increases to JPMorgan Chase & Co.'s (NYSE:JPM) CEO Compensation Might Cool off for now
CEO Jamie Dimon has done a decent job of delivering relatively good performance at JPMorgan Chase & Co. (NYSE:JPM) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 18 May 2021. However, some shareholders will still be cautious of paying the CEO excessively.
Check out our latest analysis for JPMorgan Chase
How Does Total Compensation For Jamie Dimon Compare With Other Companies In The Industry?
At the time of writing, our data shows that JPMorgan Chase & Co. has a market capitalization of US$480b, and reported total annual CEO compensation of US$32m for the year to December 2020. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.5m.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$8.0m. Hence, we can conclude that Jamie Dimon is remunerated higher than the industry median. Furthermore, Jamie Dimon directly owns US$1.3b worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$1.5m | US$1.5m | 5% |
Other | US$30m | US$30m | 95% |
Total Compensation | US$32m | US$32m | 100% |
Speaking on an industry level, nearly 42% of total compensation represents salary, while the remainder of 58% is other remuneration. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Jamie Dimon as compared to non-salary compensation over the one-year period examined. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at JPMorgan Chase & Co.'s Growth Numbers
JPMorgan Chase & Co. has seen its earnings per share (EPS) increase by 21% a year over the past three years. In the last year, its revenue is up 16%.
Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has JPMorgan Chase & Co. Been A Good Investment?
Most shareholders would probably be pleased with JPMorgan Chase & Co. for providing a total return of 54% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
JPMorgan Chase prefers rewarding its CEO through non-salary benefits. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for JPMorgan Chase that you should be aware of before investing.
Important note: JPMorgan Chase is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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