Huge paydays for major CEOs are nothing new.
In 2021, Expedia CEO Peter Kern got $296 million—the highest of any CEO that year. In 2018, Tesla gave Elon Musk a record-setting $2.3 billion pay package.
But JP Morgan Chase’s CEO Jamie Dimon’s planned $52.6 million bonus was a bridge too far for some investors. On Tuesday, shareholders voted overwhelmingly against the bank’s proposed $52.6 million all-stock retention bonus for Dimon. Just 31% voted in support of the bank’s compensation plan.
The vote is not binding, however, and the bank made no commitment to reduce or eliminate Dimon’s bonus based on shareholder opposition.
“The board said it appreciates the feedback from shareholders and takes it very seriously,” Mike Fusco, JPMorgan Chase’s spokesman, told Fortune on Wednesday.
Jamie Dimon has helmed JPMorgan Chase, the largest U.S. bank, since 2005. In January, the company reported $48.3 billion in profits in 2021, its highest ever. In response, Dimon was given a $3 million raise to his base pay, bringing it up to $34.5 million. His compensation had remained flat the previous two years.
Fusco says that the retention bonus comes amid a competitive market for executive leadership talent, adding that Dimon’s annual pay relative to the bank’s size and scale “has historically been lower than peers, demonstrating our strong pay-for-performance alignment and a more efficient CEO pay allocation ratio.”
Glass Lewis, a firm that guides shareholders on voting decisions, advised JPMorgan shareholders to reject the retention bonus in a recent report ahead of the vote, according to a report shared with Fortune published April 27. It said that the size of the retention bonus raises concerns regardless of the bank’s executive compensation history.
“We believe that shareholders should consider the company’s rationale for retention awards,” said the firm, citing concerns with the size of Dimon’s proposed bonus, and the absence of performance-based vesting conditions that would make it a more effective incentive.
“The special award was extremely rare, the first in more than a decade for Mr. Dimon, and it reflected exemplary leadership and additional incentive for a successful leadership transition,” says Fusco about the retention bonus. He adds that the award, given as 1.5 million stock options, will not vest for five years. Dimon will not be allowed to sell any vested shares for an additional five years.
Glass Lewis said the vesting plan for the $53 million still lacks any adequate performance-based checks.
“Such conditions assure shareholders that the investment in these executives’ service is matched by the results of their execution,” the firm wrote in its report.
“The Board will continue to actively engage with investors on compensation and other matters,” says Fusco.
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