J.P.Morgan Shareholder Engagement Presentation Deck
A Say-on-Pay Response
New disclosures were also added as a result of the Board's review of our
compensation program
A
EXPLAINING THAT THERE ARE NOT SEPARATE SHORT- AND LONG-
TERM INCENTIVE PLANS (SLIDE 6)
Cash Awards, RSUS and PSUs are all determined based on the annual performance
assessment before additional performance and vesting periods are applied to equity
grants. The sequence of the process is as follows (see pages 41 and 42 in Proxy):
Assess
performance
Determine
total
compensation
based on that
performance
Establish the
appropriate
pay mix of
total
compensation
Establish the
appropriate
variable pay
mix of cash
and long-term
equity
EXPLAINING HOW THE CEO'S ANNUAL PAY WAS DETERMINED
(SLIDE 5)
Grant cash
and equity
awards
B
To provide additional clarity on how the CMDC considers the amount of the CEO's
annual pay relative to peers, we substantially enhanced our quantitative and
graphical disclosure to demonstrate that:
For additional information and footnotes, please see slide 15
• The CMDC strongly emphasizes assessing sustained performance over the
long-term; and
• Our CEO's pay is in line with or below that of our peers, despite our larger
size, scale, complexity, global reach and consistently stronger earnings (see
pages 43 and 44 in Proxy)
JPMORGAN CHASE & CO.
EXPLAINING HOW THE CMDC REVIEWS THE RIGOR OF PSU
PERFORMANCE HURDLES EACH YEAR (SLIDE 7)
C
● CMDC reviews and calibrates ROTCE¹ hurdles each year based on:
Medium- and long-term market conditions;
Historical ROTCE performance in the banking industry; and
3. The current outlook on ROTCE over the next three years
● CMDC limits above target payouts to when the firm outperforms the majority
of its competitors or exceeds its absolute ROTCE threshold, while discouraging
excessive risk taking
D
1.
2.
● CMDC considered alternative performance measures including TSR and
chose to maintain ROTCE given its strong correlation to long-term TSR
outperformance. The CMDC considers ROTCE the most appropriate and
comprehensive metric of long-term operating performance, which is more directly
influenced by management effectiveness (see quantitative analysis on page 51 in
Proxy)
ESG FACTORS IN ANNUAL PERFORMANCE ASSESSMENTS (SLIDE 6)
Environmental & social, human capital, and governance factors are considered
in the assessment of the three qualitative performance dimensions. These
qualitative performance dimensions comprise a ~50% weighting in annual
performance assessments (see page 47 in Proxy)
Qualitative Performance Dimensions
Risk, Controls & Conduct
Client Customer / Stakeholder
Teamwork & Leadership
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