We have all been there. That meeting with your boss to discuss pay usually leaves you feeling frustrated and is best dealt with in the pub over a pint and a rant into the sympathetic ear of a friend.
However, JPMorgan CEO Jamie Dimon took a different approach when only 61% of shareholders backed the bank’s compensation for top executives at its AGM in Detroit in May.
Some 35.9% of them had the temerity to back calls for the posts of CEO and chairman to be separated and 43.8% voted against the bank’s recommendation that it should not have to disclose when it clawed back the pay of senior executives. Shareholder advisers Institutional Shareholder Services (ISS) and Glass Lewis recommended voting against Dimon’s pay and for an independent chairman of the JPMorgan board. ISS said there was no compelling rationale for Dimon’s discretionary $7.4 million cash bonus on top of his $1.5 million base salary.
Far from being chastened, Dimon laid into the shareholders, calling them irresponsible and lazy.
“God knows how many of you place your vote based on ISS or Glass Lewis. If you do that you are just irresponsible, I’m sorry,” he told an investor conference on May 27. “And you probably aren’t a very good investor either,” he added for good measure. “And you do. Believe me. I know some of you here do it because you are lazy.”
He was on a roll now. “The whole board does my compensation,” he told the shareholders. “It is not like it is done in a dark room somewhere. The chairman-CEO thing is not as important. You’ve had chairman and CEO splits where the chairman and CEO were in cahoots.”
And, to finish: “We have to do a better job of describing to the investor class how the board of directors oversees executives,” Dimon said, indicating that the only explanation for shareholder voting behaviour was a lack of understanding, not a reflection of his performance.
The row erupted just a week after JPMorgan pleaded guilty to criminal conspiracy to manipulate foreign exchange rates.