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JPMorgan entices chief Jamie Dimon to stick around with a lucrative carrot

The board said it gave the award to motivate Dimon, who already has a $US2.1 billion fortune, to keep doing his job well. Dimon, who received $US31.5 million in compensation for 2020, won’t be able to exercise the options for at least five years, and must hold any net shares gained from the award until mid-2031.

For the next five years the board can take away as many as half of his options if the bank’s performance is “unsatisfactory for a sustained period of time,” if the bank’s annual profit excluding certain items turns negative, or if the bank’s business units don’t meet certain financial thresholds.

The bank’s share price has nearly quadrupled over the last decade and is up 18 per cent this year.

It’s not unusual for companies to grant large one-off awards to senior executives when they sign new employment agreements or as part of succession planning. Some compensation experts say such awards have become increasingly common since Tesla granted a massive moonshot award to founder Elon Musk in 2018.

But Wall Street banks have largely shied from such grants since the financial crisis and instead maintained largely uniform and predictable executive pay programs.

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In May, the firm named Lake and Piepszak as the co-heads of JPMorgan’s sprawling consumer and community banking business, effectively elevating them in the race to the financial world’s most prized throne. Daniel Pinto, the bank’s president, is still widely seen as the obvious replacement for Dimon in an emergency, though a less likely candidate in a slow and orderly handoff.

Bloomberg

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