JP Morgan Chase, the largest bank in the U.S., offered incentives estimated to be worth about $50 million to keep Jamie Dimon, CEO of the U.S., in the position longer.
According to Bloomberg, JP Morgan gave CEO Dimon 1.5 million shares of Stock Appreciation Rights (SAR) in a report on the change of revenue ownership submitted to the SEC the previous day. The share price is JPMorgan’s then-share price of $148.73.
SAR is a type of stock option that provides virtual shares to beneficiaries and pays the difference between option price in cash or shares when the company’s stock price rises over the next few years.
According to stock valuation expert Terry Adamson, the option received by CEO Dimon is worth about $50 million on paper. JPMorgan did not disclose its own valuation.
This option is separate from the annual compensation that CEO Dimon has received regularly. It cannot be exercised until at least July 2026. Shares paid in compensation must be held until July 2031.
JP Morgan also added a clause that allows the company to retrieve up to half of the shares provided to CEO Dimon if its performance is unsatisfactory, such as negative annual profits.
“It reflects the board’s desire for Damon to continue to lead the company over the next few years,” JPMorgan said in the report. “We considered the company’s long-term responsibility, leadership continuity and importance of management succession plans amid fierce competition among executives.”
CEO Dimon has been the head of JP Morgan since 2005. It is said that it made JP Morgan the most profitable bank in the United States through the financial crisis. CEO Dimon’s fortune is estimated at $2.1 billion. His annual salary last year was $31.5 million.
He underwent emergency heart surgery last year. He did not disclose his retirement plans. When asked when he would retire, CEO Dimon jokingly said, “After five years.” JPMorgan also promoted a potential successor to CEO Dimon in May.
