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JPMorgan's board wants 6 shareholder proposals rejected; says Dimon's pay increase reflects 'exceptional' performance

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JPMorgan's board wants 6 shareholder proposals rejected; says Dimon's pay increase reflects 'exceptional' performance

The board of JPMorgan Chase & Co. recommends shareholders to voteagainst all six shareholder proposals, which include appointing a stockholdercommittee to address whether divesting all noncore banking business segmentswould enhance shareholder value.

According to an April 7 proxy statement, after reviewing apotential separation scenario, the board concluded that continuing thecompany's strategy "is the highest-certainty path to enhancing long-term shareholdervalue," and that the company's operating model benefits fromdiversification and scale.

Another shareholder proposal called for an independent boardchairman. The company responded that the adoption of the proposal would limitthe board's ability to determine the best leadership structure.

Shareholders also submitted a proposal to amend the wayshareholder votes are counted, a proposal which seeks to prohibit the vestingof equity-based awards for senior executives due to a voluntary resignation toenter government service, a proposal to amend JPMorgan's clawback provisions,and a proposal to adopt an executive compensation philosophy with societalfactors.

In addition, the proxy filing disclosed details on executivecompensation, including that of Chairman, President and CEO Jamie Dimon.According to the board, its decision to increase Dimon's compensation to$27.0 million in 2015from $20.0 million in 2014 reflects his "exceptional performance over a sustainedperiod of time, including outstanding performance in 2015."

Dimon's 2015 compensation consisted of $1.5 million annualsalary, and variable compensation composed of a $5.0 million, or 20%, cashincentive and $20.5 million, or 80%, in the form of performance share units.His 2015 compensation also reflects a decrease in his cash incentivecompensation, from $7.4 million, and an increase in his equity compensation,from $11.1 million.

The board's decision to change Dimon's pay mix"reflects the desire to more closely align his interests with those ofshareholders, as PSU awards are 100% at risk, and will result in no payoutunless a threshold performance level is achieved, and a 150% payout in theevent a significant performance level is achieved," according to thefiling.

JPMorgan added that, as a percentage of profits, Dimon isthe lowest-paid CEO among the company's financial services peers, as measuredby total compensation as a percentage of net income from 2012 to 2014.

JPMorgan's annual meeting of shareholders will be held onMay 17 in New Orleans.