Jamie Dimon has been the CEO of JPMorgan Chase & Co. (NYSE:JPM) since 2005, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for JPMorgan Chase.
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Comparing JPMorgan Chase & Co.'s CEO Compensation With the industry
According to our data, JPMorgan Chase & Co. has a market capitalization of US$307b, and paid its CEO total annual compensation worth US$32m over the year to December 2019. That's a fairly small increase of 5.3% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.5m.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$13m. This suggests that Jamie Dimon is paid more than the median for the industry. Furthermore, Jamie Dimon directly owns US$813m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$1.5m | US$1.5m | 5% |
| Other | US$30m | US$29m | 95% |
| Total Compensation | US$32m | US$30m | 100% |
Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Jamie Dimon as compared to non-salary compensation over the one-year period examined. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
JPMorgan Chase & Co.'s Growth
JPMorgan Chase & Co.'s earnings per share (EPS) grew 3.1% per year over the last three years. It saw its revenue drop 8.1% over the last year.
We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has JPMorgan Chase & Co. Been A Good Investment?
JPMorgan Chase & Co. has served shareholders reasonably well, with a total return of 21% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
JPMorgan Chase prefers rewarding its CEO through non-salary benefits. As we touched on above, JPMorgan Chase & Co. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, EPS growth is not moving in the right direction, and the returns to shareholders could have been better, over the last three years. We'd stop short of saying CEO pay is inappropriate, but we'd like to see healthier business growth from the company, moving forward.
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at JPMorgan Chase.
Important note: JPMorgan Chase is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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