Welcome to the annual shareholders meeting for JPMorgan Chase & Co., which will be led by Jamie Dimon, Chairman and CEO of JPMorgan Chase.
Good morning, ladies and gentlemen. It's 10:00 A.M., and I'm pleased to call to order the annual meeting of shareholders of JPMorgan Chase & Company. Welcome to everybody. I am Jamie Dimon, Chairman of the Board and Chief Executive Officer of JPMorgan Chase, and chair of this meeting. With me today is Stacey Friedman, our general counsel. Stacey will serve as secretary of this meeting and will lead us through the formalities and the agenda. Also with us is Mikael Grubb, our head of Investor Relations, who will be reading questions submitted by our shareholders. Stacey?
Thank you, Jamie. I'd like to add my welcome to everybody joining us today. As for the business of the meeting, I have the affidavit of mailing of the notice of meeting, the proxy statement, the form of the proxy, and the annual report. The list of shareholders of record was made available for inspection as described in our proxy statement. Representatives of the America Election Services, LLC, have been appointed to serve as our inspectors of elections, are with us virtually today. Dan Feldner, our audit partner from PwC, is with us by phone. The meeting is properly convened, the quorum is present. The proposed resolution set forth in the proxy statement will be filed as part of these proceedings.
It is 10:02 A.M., and the polls on all proposals set forth in the proxy statement are now open and will remain open until we announce they have been closed. Please note that if we experience technical issues such as the loss of audio or webcast, we ask that shareholders and guests stand by, allow us time to try and resolve the issue and resume the meeting. Otherwise, provide an update. If a technical disruption occurs that prevents us from continuing, the polls will be closed immediately. The votes received prior to the time the polls close will be counted. The meeting will not be reconvened, and the vote results will be announced publicly. The meeting is being conducted solely through remote communication, and you will be able to participate in the meeting by voting and submitting questions through our virtual website.
You may submit questions at any time, and I encourage you to do so. Our meeting agenda and rules of conduct for this meeting are provided on our website and will be strictly followed. Because this is a meeting of our stockholders, only shareholders who were holders of record on March 22nd are permitted to vote and submit questions during the meeting. In order to vote or ask a question, please follow the directions on the website and in the rules of conduct. To allow us the opportunity to answer other shareholder questions, each shareholder will be limited to 2 questions. We've received proxies up until just before the beginning of the meeting, representing 85% of the outstanding shares eligible to vote, and these have been voted in accordance with shareholders' wishes.
If there are shareholders present who have not yet voted, we ask you to take the opportunity to vote now using the link provided in the meeting website. Your votes will be recorded and reflected in the final results. Our remarks today may contain forward-looking statements. Please refer to our annual report on Form 10-K, filed with the SEC, for our disclaimer regarding such statements. That is the necessary formalities. Jamie will now introduce the directors and comment on the state of the company.
I'd like to recognize our incumbent director nominees, who are joined with us today in person. With me are Stephen Burke, our lead independent director, and Mark Weinberger, who joined our board earlier this year. Our other board members have joined virtually. They are Linda Bammann, Todd Combs, Alicia Boler Davis, Alex Gorsky, Mellody Hobson, Phoebe Novakovic, and Ginni Rometty. I would also like to especially acknowledge Tim Flynn and Mike Neal, who did not stand for reelection, and thank them for their extraordinary service over the years. I'm very proud to tell you the dedication of your directors plays a huge part in making this a great company. I would also like to encourage you to read the letter that was co-written by myself and our lead independent director, as included in this year's proxy statement. Good morning, everyone.
As I wrote in my annual shareholder letter last month, 2023 was another year of significant challenges, from the terrible ongoing wars and violence in the Middle East and Ukraine, to mounting terrorist activity and growing geopolitical tensions, importantly with China. While all of these events and associated instability have serious ramifications to our company, colleagues, clients, and countries where we do business, their consequences on the world at large are far more important. JPMorgan Chase is a company that historically has worked across borders and boundaries and will continue to do its part to ensure the global economy is safe and secure. 2023 was another strong year for our firm. We generated record revenue for the sixth consecutive year and set numerous records in each of our lines of business.
We earned revenue of $162.4 billion, and net income of $49.6 billion, with a return on tangible equity of 21%, reflecting strong underlying performance across our businesses. We also increased our quarterly dividend of $1 per share to $1.05 per share in the third quarter of 2023, and again to $1.15 per share in the first quarter of 2024, while continuing to reinforce our fortress balance sheet. We grew market share in some of our businesses and continued to make significant investments in products, people, and technology while exercising strict risk disciplines. We extended credit and raised capital to $2.3 trillion for our consumer and institutional clients around the world, and we continue to play a forceful and essential role in advancing economic growth.
Each day, we move nearly $10 trillion in over 120 currencies and in more than 160 countries, as well as safeguard over $32 billion in assets. While there are numerous issues facing our company today, I'd like to focus on six. First and foremost, we are convinced that the consequences of artificial intelligence will be extraordinary and possibly as transformational as some of the major technological innovations of the past several hundred years. Since the firm first started using AI over a decade ago, we've grown our own internal organization materially. It now includes more than 2,000 AI machine learning experts and data scientists.... Over time, we anticipate that our use of AI has the potential to augment virtually every job.
Recognizing the importance of AI to our business, we created a new position called the Chief Data and Analytics Officer, headed by Teresa Heitsenrether, who sits on our operating committee, reporting to Daniel Pinto and me. Elevating this position to the operating committee level reflects how critical this function will be going forward, and how seriously we expect AI to influence our business. Second, getting our technology to the cloud, whether the public cloud or the private cloud, is essential to fully maximize all of our capabilities, including the power of our data. The cloud not only accelerates the speed of delivery of new services, but also reduces the cost of compute power, enables, when needed, an extraordinary amount of compute capability. By the end of 2024, we aim to have 70% of applications and 75% of data moved to the public or private cloud.
Third, our purchase of First Republic Bank was not something we had done just for ourselves. Regulators relied on us to step forward. I want to point out that we worked hand in hand with the Federal Reserve, the FDIC, and the U.S. Treasury. By purchasing First Republic, we brought much-needed stability to the U.S. banking system, while allowing us to give a new, secure home to over 500,000 First Republic customers. We did everything we could to redeploy individuals whose jobs were lost because of the merger. We hired over 5,000 people. We hope to have most of the integration done by the middle of this year. Fourth, we believe that companies and banks, in particular, must earn the trust of the communities in which they operate, and our extensive community outreach efforts reflect our commitment.
We are quite clear that whether our efforts are inspired by the goodness of our hearts as philanthropy or venture-type investing or good business, we try to measure the actual outcomes. For example, our $200 million investment into Detroit's economic recovery over the last decade demonstrated that investing in communities is a smart business strategy. I also want to reiterate that we're continuing our diversity, equity, and inclusion efforts. Before I comment on cultural issues, I want to repeat what I've said before, that I'm a full-throated, red-blooded, patriotic, free enterprise, properly regulated, of course, and free market capitalist. We believe in the values of democracy, including freedom of speech and expression, and stand staunchly against discrimination and hate, and we'll continue to articulate how we weigh in on social issues and what it means for our customers.
Fifth, we must protect the essential role of market making. We should recognize the United States is the biggest, deepest, and most liquid capital markets in the world. For these markets to function, it is critical for transparency and liquidity be in the secondary market. Market making provides us promoting the flow of capital to real economic, economy investments to support all sectors of the economy. Without market making, the secondary market would be extremely difficult for companies to raise capital in the primary market. The incredible strength of these markets enables companies of all sizes to grow and expand, especially during times of volatility and stress. And it's important to point out the importance of staying competitive in the shrinking public markets. I've maintained for some time that the role of public companies in the American financial system is diminishing.
From the peak in 1996 of 7,300 US public companies, they now total 4,300. The totals have grown dramatically, not shrunk. Meanwhile, the number of private US companies backed by private equity firms has grown from 1,900 to 11,200 over the past two decades. This trend is serious and may very well increase with more regulation and litigation coming. There's also a growing perception, and I believe reality, the asset management industry generally places undue reliance on proxy advisors and how proxies are voted. In response, we are making enhancements to J.P. Morgan Asset Management proxy voting processes to amplify the role of portfolio managers and to address the perception of asset managers' reliance on third-party advisor voting recommendations.
We believe these actions will strengthen our relations with our clients and with companies, while helping to build trust among shareholders, investors, and companies. Lastly, and most importantly, navigating a complex and potentially dangerous world is the most critical issue, as we may be entering one of the most treacherous geopolitical areas since World War II. J.P. Morgan must be prepared for the various potential impacts and outcomes on our company and our people, and rest assured, we are. We have ongoing concerns about persistent inflationary pressures and consider a wide range of outcomes to manage interest rate exposure and other business risks. While the mini banking crisis of 2023 is over, I strongly caution everyone to beware of higher rates of recession, not just for banks, but for the whole economy.
We seek to be engaged globally while carefully managing complex countries and geopolitically, geopolitical issues. Simply put, policy and strategy matter, and engagement makes the world a better place, and we sure want the world to continue to improve. A comprehensive strategy to keep the world safe, not only for America, but for freedom and democracy, entails four important pillars, and we must succeed at each: maintaining American leadership, including military leadership, achieve long-term economic success with our allies, strengthen our nation domestically, and deepen focus and resolve in addressing our most pressing challenges. If we can achieve these things, I believe that American can coalesce with its allies to form the alliances necessary to keep the world safe for freedom and democracy. In closing, I want to share that 20 years ago, in 2004.
JPMorgan Chase and Bank One merged as part of a 225-year journey to form this exceptional company of ours, JPMorgan Chase. At the time of the merger, we were the fourth largest bank in the world by market capitalization. Today, our bank has now emerged as the number one bank by market capitalization. I remain proud of our company's resiliency and what our hundreds of thousands of employees around the world have achieved over the decades and years to make us an end-game winner. I hope you are as proud of them as I am. Thank you. Stacey?
Thank you, Jamie. It's now time to turn to the proposals that are in the Proxy Statement. I will introduce the management proposals and then invite shareholder proponents to introduce their proposals. After all the proposals have been introduced, we'll respond to shareholder questions regarding those, including questions that were submitted prior to the meeting. After the polls are closed, we will hold a 30-minute general Q&A period, during which we will address general questions... including, again, questions submitted prior to the meeting. I now move all of the management proposals as set forth in the Proxy Statement. These are 4. First, election of the 10 nominees listed in our Proxy Statement as directors. Second, an advisory resolution to approve executive compensation. Third, a resolution approving the amended and restated long-term incentive plan, effective May 21st, 2024. And fourth, ratification of the independent registered public accounting firm, PwC.
I will now ask that the proponents introduce their proposals. Proponents, as stated in our rules of conduct for this meeting, we ask that you limit your time to three minutes and confine your comments to the subject matter of the proposal being presented. Proposal five was submitted by Kenneth Steiner. We've been advised that John Chevedden will present this proposal. Mr. Chevedden, please introduce the proposal.
Hello, this is John Chevedden, Proposal Five, independent board chairman. Shareholders request that the board of directors adopt an enduring policy and amend the governing documents as necessary in order that two separate people hold the office of the chairman and the office of the CEO. Selection of the chairman of the board requires the separation of the offices of the chairman of the board and the chief executive officer. Whenever possible, the chairman of the board shall be an independent director. This proposal topic won 47% support at the 2021 JPM annual meeting. It takes much more JPM shareholder conviction of the merits of this proposal topic to vote for this shareholder proposal topic than to simply go along with the JPM board of directors' long-winded advice.
This 47% vote was especially impressive because the proposal had to swim upstream against repeated glossy management special solicitations sent to the most vulnerable JPM shareholders who have no access to an independent source for proxy voting advice. In response to the 47% vote, the JPM board of directors deceptively put forth a policy that it could always have one person fill the two most important jobs at JPM, as long as directors gave almost any excuse to avoid having an independent board chairman. JPM also needs to take the role of the lead director more seriously. JPM's so-called lead director, Mr. Steven Burke, violates the most important attribute of a lead director, independence. As director tenure goes up, director independence goes down. Mr. Burke has 20 years director tenure, and Mr. Burke got the most against votes of any JPM director again in 2023, surpassing Mr.
Tim Flynn, chair of the JPM Audit Committee, and Mr. Jamie Dimon, who was again third highest in against votes. The 47% support for this proposal topic in 2021 could be taken as a rejection of Mr. Burke as lead director. Based on the JPM board of directors' extra proxy materials, the proxy advisors, Institutional Shareholder Services, and Glass Lewis recommended a vote for this proposal 5 and a vote for proposal 10 regarding JPM golden parachutes. Large shareholders pay proxy advisors for recommendations based on what is best for shareholders, as opposed to what is comfortable for management. Please vote yes, independent board chairman, proposal 5.
Thank you. We oppose this resolution. The reasons for doing so appear on pages 92 through 94 of the Proxy Statement. Now turning to Proposal 6, which was submitted by the National Legal and Policy Center. We've been advised that Luke Perlot will present this proposal in a prerecorded statement. Please play the statement.
Good morning. My name is Luke Perlot, and I'm presenting on behalf of the National Legal and Policy Center. JPMorgan claims its commitments to the carbon emissions reduction targets and net zero 2050 goals outlined in the Paris Agreement are necessary. To that end, the firm plans to dramatically reduce the carbon intensity of its energy sector lending portfolios by 2030. JPMorgan believes that if more companies do not take similar commitments to catalyze the energy transition and reduce the global usage of hydrocarbon energy, anthropogenically driven climate change will result in catastrophic effects to the environment, to the planet, and to humans. Yet the research increasingly shows that the narrative of catastrophic climate change is over exaggerated and misleading.
The apocalyptic scenarios used to justify rapid decarbonization are pushed by politicians, not scientists, and they are increasingly unlikely, yet the media portrays them as the default scenario. Conversely, the negative effects of rapidly reducing the supply of hydrocarbon energy are clear and obvious. First of all, developing nations rely heavily on affordable energy from fossil fuels. According to the International Energy Agency, nearly 760 million people, who primarily live in Africa and Asia, still lack access to electricity. Secondly, when energy prices rise, oil importing nations in Africa, Asia, and Latin America are hit the hardest because of high import prices and weaker currencies, also according to the IEA. The pivot away from fossil fuels without adequate and affordable alternatives will inflate energy costs, reduce energy availability, and stifle economic growth in these vulnerable regions.
As a result, JPMorgan's allegiance to the Paris Agreement, its energy transition goals, are at odds with its commitment to the United Nations Sustainable Development Goals, particularly the first goal of ending poverty. NLPC's proposal asks JPMorgan to conduct an audit of the economic and humanitarian effects, both adverse and beneficial, of its policies, particularly on developing nations. Some of the company's clients may be legitimately concerned with climate change, and this is not the issue. The issue is that the company has made decisions on behalf of all its clients' assets based on the opinion of a small subset of the political spectrum. NLPC urges the board to examine all sides of this issue by conducting an audit of the negative economic and humanitarian effects of its climate policies, and we urge our fellow shareholders to vote for Proposal Six. Thank you.
Thank you. We oppose this resolution, and the reasons for doing so appear on pages 95 and 96 of the proxy statement. Proposal Seven was submitted by United Church Funds. We've been advised that Olivia Bisa Tirko will present this proposal in a prerecorded statement. Please play the statement.
Good morning, JPMorgan Chase Board and shareholders. Olivia Bisa Tirko, an Indigenous leader from the Peruvian Amazon, will present on behalf of the United Church Funds, long-term shareholders, to request a report on how effectively Chase respects Indigenous rights. We encourage investor support for Proposal 7. Olivia's community, the Shipibo nation, and neighboring communities, the Indigenous Achuar and Muipis, are impacted by Chase financing. Leaders like Olivia have been subject to severe threats for opposing oil activities. Her following message will be translated to English from Spanish.
Buenos días. Mi nombre es Olivia Bisa Tirko, Presidenta del Gobierno Territorial Autónomo de la Nación Shipibo.
My name is Olivia Bisa Tirko, the President of the Autonomous Territorial Government of the Shipibo Nation.
Soy madre de dos hijos, y quiero-
I am the mother of two children, and I want my children to have the same chance to live a life with the same freedoms that all children should be entitled to. That is all we are asking for. Indigenous Peoples have the right to say no to oil in our territories. However, Chase makes this reality impossible. Instead of listening to us, it invests $ billions in companies that destroy our lives and our Mother Earth.
Ya habíamos acordado tener una reunión para discutir-
We were scheduled to discuss the bank's financing of Petroperu. However, your representatives canceled the meeting just two days beforehand, after we traveled thousands of miles to meet with them. Chase then tells the press that it makes informed decisions based on facts and claims to respect Indigenous rights. But does it?
... Petroperu destruye la selva Amazonica, contaminando nuestros territorios.
Your client, Petroperu, destroys the Amazon rainforest by contaminating our territories, which cover 16 million hectares.
Su cliente, Petroperu, es responsable al menos de 139 derrames-
Your client, Petroperu, is responsible for at least 139 oil spills that ruin our ability to drink clean water and breathe clean air.
Su cliente, Petroperú, está vinculada a la criminalización-
Your client, Petroperu, is linked to the criminalization of Indigenous peoples and violates free, prior, and informed consent with its plans to enter Block 64. If Chase wants to respect Indigenous rights, it must stop financing companies like Petroperu. Chase also publicly states that it's still willing to talk. Well, we too are willing to talk with you directly, Jamie Dimon, so we can explain how your bank's financing impacts us and the Amazon. Chase must not turn away a second time. No matter how much material wealth you acquire in your lifetime, your children and grandchildren's futures will depend on the survival of these ecosystems. We encourage all investors to support the proposal and for the board to seriously examine JPMorgan's impacts on Indigenous rights.
Thank you. We oppose this resolution. Our reasons for doing so appear on page 97 of the proxy statement. Proposal 8 was submitted by Maryknoll Sisters of St. Dominic. We have been advised that Kathy Rowan will present this proposal. Ms. Rowan, please introduce the proposal.
Thank you. Good morning, Mr. Dimon, members of the board, fellow shareholders. I'm Kathy Rowan, and on behalf of the Maryknoll Sisters and the co-filer, Benedictine Sisters of Mount St. Scholastica, who are members of the Interfaith Center on Corporate Responsibility, I move Proposal Eight on proxy voting alignment. We filed this proposal as we, along with other investors, are attentive to asset managers' proxy voting records as part of our ongoing stewardship oversight, and we appreciate the openness our company has shown in engaging in dialogue on this issue. We know that JPMorgan Asset Management understands the risks companies face from climate change and the importance of racial equity for shareholder value, and commend the bank's new financial commitment to advance long-term solutions that address climate change and contribute to sustainable development, as well as its 2020 commitment towards efforts to close the racial wealth gap.
Yet last year, we saw a dramatic drop in J.P. Morgan Asset Management's support for resolutions that address these issues. In a survey of the proxy voting records of 69 asset managers, J.P. Morgan Asset Management ranked 59th. It supported only 26% of environmental resolutions on proxy in 2023, versus 43% supported in 2022. J.P. Morgan Asset Management supported 25% of social proposals assessed in 2022, but only 11% in 2023... To us, this is a sign of failing to align proxy voting on environmental and social oversight with environmental and social risk.
We see an opportunity for J.P. Morgan Asset Management to address this misalignment, as it is already a signatory to the Net-Zero Asset Managers Initiative, which is a group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with efforts to limit warming to 1.5 degrees Celsius. We understand that firms participating in such initiatives are independent fiduciaries responsible for their own voting decisions, and they're not required to vote or engage in a specific way. However, the Net-Zero Asset Managers commitment asks participants to implement a voting policy consistent with the goal of net zero emissions by 2050, in line with global efforts to limit warming to 1.5 degrees. Here lies an opportunity for the company to strengthen its proxy voting guidelines on climate-related issues.
We believe that the review our proposal seeks can lead to better disclosure related to proxy voting and help investors understand how the company approaches social and environmental risks. Therefore, I ask for your support. Thank you.
Thank you. We oppose this resolution, our reasons for doing so appear on pages 98 through 100 of the proxy statement. We'll now turn to Proposal 9, submitted by the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, South Dakota. We've been advised that Sister Peggy Boehm will present the proposal in a prerecorded statement. Please play the statement.
My name is Sister Peggy Boehm, a religious sister with the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, South Dakota. I'm speaking as a proponent of Proposal 9, to request that the board of directors commission an independent third-party report at reasonable cost on JPMorgan Chase's due diligence process to determine if and how its lending, underwriting, or services in conflict-affected areas expose it to human rights risks and other material risks. We were blessed to have a dialogue with management a few months ago. We acknowledge the key role JPMorgan plays in the protection of human rights. A report to determine how its services in conflict-affected high-risk areas expose it to human and other material risks will only strengthen the integrity of the company's current reporting.
So you may ask, why do we as shareholders request an independent third-party report, specifically in conflict-affected and high-risk areas? A third-party report would ensure a professional expertise-informed and accurate analysis of JPMorgan's due diligence in conflict in high-risk areas. JPMorgan Chase's top 20 exposures as of 12/31/2023 ran worse than the global average per the 2023 Corruption Perceptions Index from Transparency International. The World Bank estimates that by 2030, nearly two-thirds of the world's extreme poor will live in settings characterized by conflict and violence, creating heightened vulnerability to widespread human rights abuses and violations. Why wouldn't a company do all in their power to minimize the cost of human lives? Why wouldn't a company want to monitor human rights violations, particularly in conflict areas, to avoid reputational risk? When beginning any project, worst-case scenarios are often included in strategic planning.
Asking for a report of human and social risks in conflict in high-risk areas, then, is a way to include worst-case scenarios in its processes. Having this process in place may have saved JPMorgan from reputational risk recently. The company, once the main contractor of Russian banks for opening correspondent accounts in U.S. dollars, has been trying to leave since 2022. The bank is now stuck and facing a multimillion-dollar lawsuit from its former partner in Russia, VTB. Therefore, say yes to Proposal Nine. Our prayers go with you all. Thank you for this opportunity to speak.
Thank you. We oppose the resolution, and our reasons for doing so appear on page 101 of the Proxy Statement. We'll turn to Proposal 10, submitted by John Chevedden. We've been advised that Mr. Chevedden will present this proposal. Mr. Chevedden, please proceed.
Hello, this is John Chevedden, Proposal 10, shareholder opportunity to vote on excessive golden parachutes. Shareholders request that the board adopt a policy to seek shareholder approval of senior managers' new or renewed pay packages that provide for golden parachute payments with an estimated value exceeding 2.99 times the sum of the executive's base salary plus target short-term bonus. This proposal only applies to named executive officers. The board shall retain the option to seek shareholder approval at an annual meeting after material terms are agreed upon. Generous performance-based pay can sometimes be justified, but shareholder ratification of golden parachutes better aligns management pay with shareholder interest. This rule is relevant even if there are current golden parachute limits. A limit on golden parachutes is like a speed limit. A speed limit by itself does not guarantee that the speed limit will never be exceeded.
Like this proposal, the rules associated with a speed limit provide consequences if the limit is exceeded. With this proposal, the consequences are a non-binding shareholder vote is required for unreasonably high Golden Parachutes. This proposal places no limits on long-term equity pay or any other type pay. This proposal, thus, has no impact on the ability to attract executive talent or discourage the use of long-term equity pay because it places no limit on Golden Parachutes... It simply requires that extra large Golden Parachutes be subject to a non-binding shareholder vote at a shareholder meeting already scheduled for other matters. This proposal is relevant because the annual say on executive pay vote does not have a separate section for approving or rejecting Golden Parachutes.
Based on the JPM Board of Directors extra proxy materials, the proxy advisors, Institutional Shareholder Services, and Glass Lewis, recommend a vote for this Proposal Ten, and a vote for Proposal Five regarding an independent board chairman. Large shareholders pay proxy advisors for recommendations based on what is best for shareholders, as opposed to what is comfortable for management. Please vote yes. Shareholder opportunity to vote on excessive golden parachutes, Proposal Ten.
Thank you. We oppose this resolution. The reasons for doing so appear on pages 102 and 104 of the proxy statement.
Management. Please vote yes. Shareholder opportunity to vote on-
Proposal Eleven, Reporting on Respecting the Workforce Civil Liberties, Liberties, was withdrawn on Friday, May 10, 2024, by the proponent. We appreciate the proponent's engagement, therefore, this proposal will not be presented or voted upon. Any votes cast will not be tabulated or reported. That completes the introduction of the shareholder proposals. We oppose them for the reasons set forth in the proxy. If anyone has questions regarding the proposals, please submit them now, we have a few that have already come in, using the Ask a Question field on the website, meeting website. We'll now turn to those shareholder questions that we've received, including those that have just come in. I would like to invite Mikael Grubb, our Head of Investor Relations, to read the questions from shareholders.
Thank you, Stacey. We have received a number of questions on Proposal 7 with respect to the people. The first one comes from Gillian Lyons. Multiple indigenous communities are calling for JPMorgan to break ties with projects or clients that are violating indigenous peoples' rights, especially the right to free, prior, and informed consent. How does JPMorgan plan to remedy these rights violations?
We certainly support the principles of human rights in every place we do business around the world. We're guided by the United Nations principles and the International Finance Corporation standards, which address the treatment of indigenous peoples, including the principles of free and prior consent. We recognize those principles, including in how we operate with dealing with our employees, with our clients, with the communities where we work and live. So our opposition to this proposal is not opposition to broader support, support for the indigenous community, which we do support. The reasons we oppose this are explained in our Proxy Statement. We have policies and procedures that address this, address this adequately, and we don't think there's shareholder value in doing additional work around this.
We have a follow-up question from Gillian Lyon on Proposal Seven. JPMorgan is the largest financier of Amazon oil and gas activities, despite related threats to Indigenous people's rights and many oil and gas companies' well-established track record of bribery and corruption. Will JPMorgan commit to end its financing and advisory services for its current clients that are producing or expanding oil and gas in the Amazon?
No, we're not going to commit to a boycott at any given company or in any given sector. As I said before, we do support the rights of Indigenous people. We follow the principles of Free, Prior, and Informed Consent, and we'll continue to work that into our diligence and business practices.
We have another question with respect to Proposal Seven. This one comes from Adele Shraiman. JPMorgan considers the Equator Principles for transactions. The Equator Principles spell out that free, prior, and informed consent is needed for projects with impacts on lands and natural resources, subject to traditional ownership or under the customary use of indigenous peoples, or projects with significant impacts on critical cultural heritage essential to the identity of indigenous people. JPMorgan is currently lending to Santos, a company building the Narabri Gas Project and the Barossa Gas Project. Gomeroi and Tiwi traditional owners, the indigenous people of those lands, have not given their free, prior, informed consent for these projects. Will the bank drop clients like Santos, who do not meet its stated principles on human rights and due diligence?
We appreciate the question. We, again, are not going to boycott any given company or sector, but we do, as I said before, apply these E&S principles, including the International Finance Corporation's principles, those performance standards, which address the treatment of indigenous people. We'll certainly take your question away and look into it more deeply.
Again, with respect to Proposal Seven, we have received multiple questions regarding Indigenous people, the Equator Principles, and free, prior, and informed consent. As provided in the rules of conduct, these questions are summarized as follows: Multiple Indigenous communities are calling for JPMorgan to break ties with projects or clients that are alleged to be violating Indigenous people's rights, especially the right to free, prior, and informed consent. How does JPMorgan plan to remedy these alleged rights violations?
I think we've answered this question previously, but again, to restate, we'll look at each of the individual questions and take them into consideration going forward. We'll continue to abide by the United Nations principles and the principles of the International Finance Corporation, and we'll continue to make sure that we do diligence in support of indigenous communities.
... With respect to Proposal 9, with regards to conflict-affected in high-risk areas, how does JPMorgan Chase consider the human rights and material risks associated with operating in conflict-affected and high-risk areas?
Our objectives around conflict areas and sustainable development are complementary. So when you look at our financing and what we're facilitating, the $2.5 trillion to advance long-term solutions, it is also around sustainable development. We continue in that area, looking at areas like the United Nations Sustainable Development Goals, where poverty eradication and dealing with conflict situations is a goal. So we understand that the request here is to do an additional audit. We think that it would divert time and attention. We'll continue to use our best practices to address these issues.
We have one more question regarding Proposal 7. This one comes from Mary Miharis. Will Jamie Dimon agree to meet with Olivia Bisa and leaders from other Amazonian indigenous nations alluded to in the speech?
We are always happy to engage constructively with proponents, as we've done with several proponents that have proposals here today. I think the meeting referred to in the audio was not with the proponents of the proposals. We have met in the past with Amazon Watch and with respect to the issues raised here, and again, we're happy to have in-person meetings on a constructive and productive basis.
Okay, we have now addressed the questions that were submitted with respect to the proposals.
Okay. It is now 10:39 A.M. I declare the poll is closed. I will read the preliminary vote results that were received immediately prior to the meeting. The final results will be reported on a Form 8-K. That will be filed with the SEC and also with the minutes of the meeting. With respect to the election of directors, all directors were elected, and each director received a majority of votes cast for and against. No director received less than 90.4% of the votes cast. With respect to the other proposals today, I will, I will read the percentage voted for each proposal based on the shares marked for, against, or abstain. On Proposal 2, the vote for advisory resolution to approve executive comp, it was 91.4% for.
The vote for approval of the amended, restated long-term incentive plan effective May 21, was 95.5% for. The vote for ratification of our independent registered public accounting firm was 94.4% for. The vote for proposal on independent chair was ninety... Sorry, 42.7% for. The vote for proposal on humanitarian risk due to climate change policies was 1% for. The vote for the proposal on indigenous people's rights indicators was 30.4% for. The vote for the proposal on proxy voting alignment was 7.8% for. The vote for proposal on a report on due diligence in conflict-affected high-risk areas was 7.3% for. The vote for a proposal on a shareholder opportunity to vote on excessive golden parachutes was 40.7% for. That concludes all of the formal business.
Jamie, if you want to call to adjourn the meeting, now is the time.
Stacey, thank you. This concludes the business of the meeting. The 2024 annual meeting with shareholders, stockholders, is hereby adjourned.
Thank you, Jamie. We're now ready to respond to general questions and comments submitted by shareholders. As mentioned earlier, we will allow for 30 minutes to respond to general questions. If you have questions about the services we provide or if your question is in regard to a personal matter, we will be responding to those questions separately after the meeting. Michael, will you please read the questions?
Thank you, Stacey. Our first question comes from Penelope Tarrant. Financial fraud is growing more sophisticated and prolific. What actions and investments is Chase making to protect client identities and funds in the future? Can Chase, Chase take this opportunity to innovate a new, differentiated level of security in banking?
Chase does consider itself, JPMorgan Chase considers itself, to protect the financial system. We have extensive controls, cyber controls, risk and fraud controls, anti-money laundering, anti-sex trafficking, anti-elder abuse. We make constant investments, and we're constantly improving these services all the time. We do consider ourselves among the, among the best at it.
We have received a question from Stephen Papacek. Given the increasing focus on environmental, social, and governance, ESG factors in investment decisions, could the board provide more insight into JPMorgan's long-term strategy for integrating sustainability principles into its operations and investment decisions?
I think the best thing to do in this case is there's an extensive ESG report that we send out, which gives a lot of detail on what we do, both for ourselves, i.e., our own operations, and for clients. It's extensive, it's very detailed, and if you have a chance to read it, if you feel there are questions and answers, you feel free to call Michael Grubb.
We received a question from James Amoroso, who asks: What should the individual investor do with regard to the huge federal deficit and rising cost of servicing that debt as interest rates continue to rise or hold steady? How should we invest to protect ourselves from this and inflation?
So we cannot provide individual investment advice, but we can tell you we do for ourselves. We look at an extensive set of different factors. We look at risk from higher rates to lower rates to inflation, stagflation or no inflation, and we try to prepare for all of them so we can continue to serve our clients around the world. As a public policy matter, I do think the sooner the federal government focuses on this issue, the better, and hopefully, that will happen sometime soon.
We received a question from Tuhin Chatterjee, who asks: Why aren't there more international branches to withdraw money in Europe and India?
We are not in the consumer or retail business in Europe and India, other than Chase UK, where we started an operation where you are able to do it in Chase UK. So, maybe one day we'll be in more countries. Until then, we're not the person you should look for to get cash out of ATMs.
Our next question is from Steven Miller, who asks: Is a stock split being considered, or do you think it's best to allow the stock price to continue accumulating?
This is a board of directors' decision to determine if and when we may do a stock split. However, I would not expect a stock split in the foreseeable future.
Our next question is from a shareholder who asks: What is driving record stock price, given the state of the overall economic environment?
I think if you look at what we've been doing over the last 20 years, we consistently invest in people, technology, branches, bankers, to serve our clients. In general, we've been gaining market share, and in general, our tangible book value has been growing. We've had very good returns, and that's what drives the stock price ultimately.
Our next question comes from shareholder Gregory Neff. Agriculture officials from at least 11 states have raised concerns about JPMorgan's involvement with the Net-Zero Banking Alliance, NZBA, saying that the policies promoted by this group will likely lead to food shortages and huge price increases for consumers. Is it wise for this board to step outside of its expertise and make commitments to push forward the NZBA's agenda?
I would just clarify, it's not a commitment, it's an aspiration. We, we dance to our own music here, and we've reported that extensively in our ESG report. Obviously, we care about the environment and farmers and agriculture.
In 2023, JPMorgan Chase remained the world's biggest financier of fossil fuels, pouring $40.88 billion into the industry. With 2023 having been the hottest year on record, the U.S. having seen a record high number of billion-dollar-plus disasters and a slew of climate impacts affecting people, infrastructure, and economies around the world, what will it take for JPM to stop funding expansion of the fossil fuel industry, which is driving the climate crisis?
We finance industry broadly around the world. A lot of these companies that we finance are safe and sound and dramatically reduce their own CO2, and it's very essential for the world to have safe, affordable, secure energy. And over time, we think a lot of those companies will be the primary drivers of reducing CO2, not increasing it.
My next question comes from Jerry Boyer, asking to expand on concerns that the management team may have about shareholder activism and the hijacking of annual meetings.
I think you're referring to our view on proxy advisors. I think it's just-- I mean, we have to treat shareholders with respect, detailed data, analytics, you know, boards that do their jobs and companies that share a lot of data with people. What we are opposed to a little bit is frivolous activity and people delegating or allowing proxy advisors to decide how they're going to vote.
Our next question is in regards to revenue. The shareholder wants to know what % of our annual revenues that come from foreign countries.
We publish that in our annual Form 10-K by geography. In 2023, the total international net revenue was about half, 48% of our net revenue.
Twenty-five percent.
Our next question comes from Daniel Swanson. A comment was made in January at Davos that, quote, "Donald Trump was right about key issues," end quote. Does the executive still stand by that comment?
I think you're misstating what was said. I'm not gonna comment on anything political on this call.
Our next question comes from shareholder Richard Stasinski, who asks: Prior to the Russian invasion of Ukraine, how did JPMorgan Chase's due diligence procedures identify human rights and material risks associated with its relationship to the now sanctioned Russian bank, VTB? After the start of the Russian invasion, how did JPMC's due diligence process identify further human risks or material risks associated with continuing some operations in Russia? For example, did JPMC's due diligence process identify the possible material risks JPMC is now facing, given the current litigation with VTB?
I'm not gonna comment on any specific client. I will say that we are following all American and European law regarding any activities in Russia. Most of those activities just support multinationals conduct their business as they wind down their operations. They're all. Everything we do is sanctioned by the United States government.
Okay, we have received a question from Brian Aber. What AI initiatives will JPMorgan undertake?
I think I wrote in the letter that we have about 2,000 people involved in AI and data analytics. We run approximately 400 different AI programs today, cutting across risk, fraud, marketing, anti-money laundering, et cetera. We think those numbers will probably double over the next couple of years. The head count will probably grow over time, so it's fairly extensive. It's growing, and if you read the annual letter, you'll see more detail on it.
This is not a question per se, but shareholder Karen Aku would like to state: Thank you, Chairman and CEO Jamie Dimon, and the board for all you do to keep JPMorgan Chase ship afloat.
Thank you.
Our next question comes from shareholder Ethan Peck, asking why the bank does not actively oppose the increasingly worrying trend on political grounds, and why the bank has denied service to its own clients on political grounds.
We do not discriminate against anybody or any individual based upon their political beliefs.
We have another statement from a shareholder, Charles E.G. I am a retired JPM/Bank One employee. I have held my stock since retiring early and look forward to the next chapter upon your departure. I hope we see your continued involvement after departure.
Thank you.
Okay, our next question comes from a shareholder who wants to know how much will be spent on share buybacks in 2024.
... Great. This is Jeremy Barnum, the CFO of the company. As we said yesterday at Investor Day, we are going to make our decisions about share buybacks dynamically as a function of circumstances of the time. So we are not making any forward-looking commitments one way or the other about share buybacks. And for additional detail, you can refer to our public comments yesterday.
Okay, bear with us while we compile the roster of additional questions. Our next question comes from Brian Aber. His question is: What new initiatives will JPMorgan undertake to deter cyber threats to the firm?
We take extensive efforts to stop cyber threats to the firm. You're talking about hundreds of millions of dollars, hundreds of applications, a lot of time spent at the board, a lot of time spent with the United States government to protect this company in every way, shape that we can.
Shareholder Mindy Wasserman asks: Please clarify the status of the commercial real estate market, including office and residential. Please clarify the exposure of the regional banks and your own exposure, given your rank as number one in commercial real estate. On consumer finance, please comment on the mortgage business in condo buildings versus single-family homes. What policies and leadership do we need in this area, given post-pandemic changes?
We have a little over $200 billion of real estate-related loans. The largest portion is, is multifamily, which we're very comfortable with. Our commercial office loans are approximately $20 billion, and we have reserves of 8% against them. We're also quite comfortable with that. Most of them are income-producing properties. I can't comment generally on all the other banks because you really have to do bank by bank to comment on that. And so and we're, we're also very comfortable with our mortgage loans. I just point out on our commercial on our consumer mortgage loans, we've had virtually no losses for about 5 years now. And we probably do very little lending on what I would call against condo-related loans, although we do, do some.
Shareholder Mark Phillips asks: I read in a recent news article from Reuters that Russian court documents claim that JPM has $2.64 billion of assets in Russia, but JPM says that its exposure as of 3/31/2024 was $350 million, plus deposits placed on behalf of clients at the Deposit Insurance Agency of Russia. Can you please walk us through why these numbers are so different? Are there more than $2 billion in deposits placed on behalf of clients at the Deposit Insurance Agency of Russia?
I think the best way to answer that is that our total investment remaining in Russia is $300 million, and that would probably be the maximum amount we would expect to lose, no matter what happens.
Our next question is from Javier De Jesus. Does JPM have plans on investing in real-world assets, RWA, in the near future?
I'm not sure what real-world assets are, but we do make loans that support real-world assets like plant, equipment, companies, et cetera.
Our next question comes from Michael Mack. The impact of JPMorgan clients and projects funded in fossil fuels industries is a growing concern for shareholders and the external pressures we face to invest into responsible institutions. What steps are being taken to ensure external clients are also improving environmental practices and with a measurable reduction in climate impacts to minimize shareholder risk?
... We do extensive work with our clients to help them reduce their climate risk and climate exposure. There's a lot of detail in our ESG report, which you should go onto our website and read. If you have additional questions, now you can call Mr. Grubb up and ask those questions.
Peter Kaiser asks: Greetings, JPMC. It is time to meet your fiduciary duty to shareholders to keep share value and returns to be socially neutral. And why not stop supporting a range of cultural issues?
I'm not sure what you mean by cultural issues. We reach out to communities all around the world and try to help support them in multiple different ways, and we're gonna continue those activities.
We have a few more questions that we're compiling. Next question comes from Judith Crosby. Do you see an impact on business performance as the effects of the U.S. pause on LNG license exports become clearer? And is JPM taking steps to reduce this risk?
I don't think it has any material risk to JPMorgan Chase at all.
We have a question from shareholder Robert Brown. What is JPM's position on and investment in cryptocurrency?
I do not believe that JPMorgan owns any cryptocurrency. But we do allow our investors to purchase cryptocurrency. I personally don't think that's a wise thing to do, but that's my own personal opinion.
Okay, there are no more questions from shareholders at this time. As a reminder, shareholders may submit questions through our virtual meeting website. We'll pause to allow for any final questions to be submitted.
All right, thank you. Our discussion period has now concluded. If you submitted a question that was not responded to or if you'd like additional information, we invite you to contact our investor relations team at the email address included on our website. Jamie, would you like to say a few words?
Yes. We greatly appreciate the views of all of our shareholders and how thoughtful they were in engaging us in this process. The entire board takes their feedback very seriously, and we'll continue to incorporate their input in how we govern the company. You can rest assured we're working hard to make you all proud and wealthier shareholders. Thank you for joining us today.
Thank you, operator. That concludes the webcast. You may now disconnect.