Welcome to the Annual Shareholders Meeting for JPMorgan Chase and Company, which will be led by Jamie Dimon, Chairman and CEO of JPMorgan Chase.
Good morning, ladies and gentlemen. It's 10 a. M, and I'm pleased to call to order the annual meeting of shareholders JPMorgan Chase and Company. Welcome. I'm Jamie Dimon, Chairman of the Board and Chief Executive Officer and Chairman of this meeting.
With me today is Stacy Friedman, our General Counsel. Stacy will serve as secretary of this meeting and will lead us through the formalities Also with us is Reggie Chambers, our Head of Investor Relations, who will be reading questions that have been submitted by our shareholders. Thank you,
Jamie. I would like to add my welcome to everyone joining us today. As for the business of the meeting, I have, 1, the affidavit The meaning of notice of the meeting, the proxy statement, the form of the proxy in the annual report, the shareholders list is available for inspection by our stockholders For participating in this virtual meeting webcast by using the link provided on the website. Representatives of American Election Services LLC has been appointed to serve as inspectors of the election are with us virtually. Dan Felgener, our audit Partner from PricewaterhouseCoopers is with us by time.
The meeting is properly convened, a quorum is present, and the proposed resolution set The proxy statement will be filed as part of these proceedings. It's 10:02 am, 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, if we experience technical issues Such as the loss of audio or webcast. We will ask that shareholders and guests stand by to allow time to try and resolve the issue, And we'll resume the meeting or otherwise provide an update. If a technical disruption occurs that prevents us from continuing the meeting, the polls will close immediately And votes received prior to the time the polls were closed will be counted.
The meeting will not be reconvened and the vote results will be announced publicly. This meeting is being conducted solely through remote communication, and you will be able to participate in the meeting by voting and submitting questions Our meeting agenda and rules of conduct are provided in the meeting website and will be strictly followed. Because this is a meeting of our stockholders, only shareholders We are And in the rules of conduct to allow us an opportunity to answer other shareholder questions, each shareholder will be limited to 2 questions. We received proxies up until just before the beginning of this meeting, representing 85.48 percent of the outstanding shares And these have been voted in accordance with shareholder wishes. If there are shareholders present who have not yet Voted, we ask that you take the opportunity to vote now using the link provided on the website.
Your votes will be recorded and reflected in the Final vote tally. Our remarks today may contain forward looking statements. Please refer to our annual report on Form 10 ks filed with the SEC for That concludes the necessary formalities. Jamie will next introduce the Board of Directors and comment on the state of the company.
Stacy, thank you very much. I'd like first to introduce and recognize our incumbent directors who are on this call today. They are Linda Badman, Steven Burke, Todd Combs, Jim Crown, Tim Flynn, Melody Hopson, Michael Neal, Phebe Novakovic and Ginny Vrometti. I am very proud to tell you that the dedication and commitment of your directors play 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 is included in this year's proxy.
I will make some remarks now about the year we've had. As I wrote this year's annual letter to shareholders And as we come together virtually here today for the 2nd consecutive year, 2020 was an extraordinary year by any measure. It was a year of a global pandemic, a global recession, unprecedented government actions, turbulent elections and deeply felt social and racial injustice. It was a year in which each of us faced difficult personal challenges and a staggering number of us lost loved ones. It was also a year when those among us with less We're disproportionately hurt by joblessness and poverty.
And there was a time when companies discovered what they really were and sometimes what they might become. Watching events unfold throughout the year, we were keenly focused on what we as a company could do to serve our countries. I want to start by saying how proud I am of what our company and our tens of thousands of employees around the world achieve collectively and individually. I also want to thank Daniel Pinto, Gordon Smith, our operating committee and our Board of Directors and senior leaders for the exceptional leadership they have shown As you might have seen, this morning we announced some senior management changes to help build the partner's success as a leader in global financial services for its customers and communities. Gordon Smith, Co President and Chief Operating Officer and Chief Executive Officer Consumer and Community Banking recently informed me of his decision to retire at the end of this year.
Gordon will continue to carry on his current responsibilities until December And Jamie Pinto, Co President and Chief Operating Officer and Chief Executive Officer of the Corporate Investment Bank, will become the sole President and Chief Operating Officer of the firm. We're delighted that Gordon will continue as a senior advising me and other executives in the New Year. You shall know that Gordon has been an exceptional friend, Exceptional leader and exceptional human being for this company. Mary Anne Lake, CEO of Consumer Lending and Jennifer Pieczak, Chief Financial Officer of the firm, will become co heads of Consumer and Consumer Banking, effectively meaningfully reported board. As co heads of CCB, Mary and Jen will be responsible for home lending, auto finance, small business and U.
S. Wealth management businesses as well as our industry leading Chase consumer banking and credit card businesses and Jeremy Barnum, currently Head of Global Research for the Corporate Investment Bank, We've been the CFO of the CIB for 7 or 8 years, will succeed Jen Pieczak as Chief Financial Officer, also effective immediately. Congratulations to all. As a management team, as a company overall, we've long championed the essential role of banking in the community, It's potential bringing people together for enabling companies and individuals to reach their dreams and for being a source of strength in difficult times. Those opportunities were powerfully present to us this year and I'm proud of how we stepped up to help clients, community and countries worldwide.
I'll start with our company's performance in 2020. 2020 was another strong year for JPMorgan Chase With the firm generating record revenue as well as numerous other records in these lines of business. We earned $29,100,000,000 of net income on revenues of $122,900,000,000 reflecting strong underlying performance across our businesses, offset by additional reserves under new accounting rules. We generally grew market share across our businesses and continue to make significant investments in products, people and technology, All while maintaining credit discipline and affords its balance sheet. In total, we extended credit and raised $2,300,000,000,000 capital for businesses, institutional clients and U.
S. Customers. I want to reiterate how the purpose of a corporation is tied to its role as a corporate citizen. JPMorgan stock is owned by large institutions, pension plans, mutual funds and directly by individual investors. To create long term shareholder value, we need to build and maintain a healthy and vibrant company to be able to deal with the uncertainties of life to invest, And to be healthy and vibrant, our company must do many things well and that do a great job for customers, Attract, develop and retain 1000 employees and service communities.
Businesses must earn the trust of their customers and communities by acting ethically and morally. With JPMorgan Chase Energy Community, we take great pride in being a responsible citizen at the local level. In addition, being a responsible community citizen nationally or globally is equally important, though far more complex. While we've devoted to philanthropy and we spend $330,000,000 a year on philanthropic efforts, corporate responsibility is far more than that. We are fully engaged in trying to solve some of the world's biggest issues, climate change, poverty, economic development and racial inequality.
I'll cite a few ways we're addressing them. Last month, we announced a 10 year $2,500,000,000,000 commitment to advance long term solutions That address climate change and sustainable development. And last week, we released carbon reduction targets for our Paris alliance financing commitments. And we introduced the path forward in October 2020 committing $30,000,000 over the next 5 years To address the key drivers of the racial wealth divide, reduce the systemic racism against Black and Latinx people and to support employees. With well designed policies, we think these issues can all be made significantly better.
We also believe that businesses' extraordinary capabilities are even more powerful We're put to use in collaboration with government capabilities. Now I'll turn to COVID and the effect this had in the economy. Within days of realizing that COVID-nineteen was a global pandemic that adversely closed down large parts of the world's economy, the U. S. Government and the Federal Reserve moved With unprecedented speed and took bold actions to effectively reverse financial planner.
Fortunately, banks are part of the solution unlike in the Great Recession. And unlike the great recession, U. S. Economy is actually in good shape going into the COVID-nineteen recession. Just about every bank took extensive action to public customers, Employees and communities and many companies, large and small, may now survive at JPMorgan Chase not taking security efforts to help them then.
I have little doubt that excess savings, new stimulus savings, huge deficit spending, more cloud native aging, A new potential infrastructure bill, a successful vaccine and before we end the pandemic that the U. S. Economy will likely boom And this boom could easily run into 2023 because all the spending could extend well into 2023. The important effect of this boom will be fully known only when we see the quality, effectiveness and sustainability of the infrastructure and other government investments. Now I want to discuss the importance of collaboration because problems are tearing at the fabric of American society These problems require government, business and civic society to work together with a common purpose.
If we can agree on what these problems are as well as the systems and the causes, then we can start to address them. I want to highlight a few of the problems I see. Education system is broken. While the average American high school graduates, probably 85% of the students, Many of our inner city schools don't graduate half of their students. This is certainly not equal opportunity.
Our healthcare system, among the best in the world, It's also increasingly costly, now over $11,000 per person, more than twice our global competitors, and the outcomes are certainly not twice as good. We need to invest properly on an ongoing basis infrastructure, clean highways, ports and mortar systems to airport modernization of the products. Our challenges are significant and we should assume not assume that they will take care of themselves. 15 American filings are going to take hard work And we all have to do all we can to strengthen our exceptional union. What stands in our way is the following: presenting issues as if they're binary, which they almost never are Creating and blaming scapegoats.
Frequently, we blame trade, China, integration or capitalism. Unfairly assigned loans to people that may or may not be true and creating short men. Here's what we need to do to start to solve some of the nervous problems. We need to partially plan effectively a coherent, Consistent national strategy to match the severity of existing structural challenges that are driving our country's racial and economic crises. We need a healthy growth strategy.
We need to promote healthy economic growth and this should be a primary economic policy of both political parties. We believe that we have the right policies to enhance growth in America by 1% a year, which would be good for every single American. We need to take specific actions and there are 15 policies we made recommendations that we think if we do and do a good job at these policies, not just spend the money, We spend the money well and effectively, training for jobs with community colleges and high schools, paying more for jobs That will include raising the minimum wage, the earned income tax credit, etcetera, creating jobs By giving people with clear backgrounds a second chance, making the health care system work better, with JPMorgan will be announcing some moves soon About things we think you could do to make it work better. We need proper, rigorous and multi year budgeting, planning and reporting at the government level, Proper management and priority review of regulatory red tape and bureaucracy, which is quickly the formation of small business, meaning proper investments on an ongoing basis Infrastructure, but if you don't fix the regulatory problems, you will not fix the regulatory infrastructure problems.
We need proper and consistent tax and fiscal policy, Intelligent deductive policy, which will include proper R and D in things like broadband, AI, etcetera thoughtful trade policies, which should enhance the economy of the United And the world maintain a strong financial system, profit immigration policies, affordable housing, which is now out of reach for many Americans. And then we have specific programs very specifically identified in policy to help assist the Black Atlantic communities. The Q multiyear effort of doing just some of these measures I described will lead to a healthier, more resilient, robust and fair America. Sometimes we forget how blessed we are. America is in a very strong position, and we have the resource to emerge from this latest economic crisis As a stronger country, America is still the most prosperous nation the world has ever seen.
And my fervent hope is to move all of our sleeves And bring leadership to our self inflicted problems. As we work together for an inclusive recovery that is long lasting, we must never forget that American economic prosperity is a necessary foundation for our military capability, which keeps us free and strong in the exceptional world peace. America is still in the arsenal of democracy. Let me close by thanking our more than 250,000 employees for the exceptional work they've done in this difficult year. Everyone, to keep the faith back to you, Stacy.
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 proposals, including the questions that were submitted prior to the meeting. It is after the polls have closed that we'll hold a 30 minute General Q and A period during which we will address general questions, including any that were submitted prior to submitting.
I'll now move all of the management proposals that set forth in the proxy statement. These are for: number 1, election of the 10 nominees listed in our proxy statement as directors number 2, an advisory resolution to approve executive compensation number 3, approval of an amended and restated long term incentive plan effective May 18, 2021 and number 4, ratification of the independent registered public accounting firm, PricewaterhouseCoopers. I will now ask the shareholder proponents to introduce their proposals. Proponents, as stated in our rules of conduct for this meeting, we do ask that you limit your time to 3 minutes You can find your comments to the subject matter of the proposal being presented. The first proposal is number 5, to improve shareholder written consent.
It was submitted by John Chevedden. We've been advised that he is here to present the proposal. Mr. Chevedden, Are you on the line?
Hello. This is John Chevedden. Can you hear me okay?
Yes. All good. Please go ahead.
Proposal 5, improve our current useless shareholder right to act by written consent. Charles requested our Board of Directors Take the steps necessary to enable 10% of shares to request a record date to initiate written consent. This proposal topic just won majority support at BorgWarner on April 28. Our current version of written consent like the BorgWarner written consent It's useless and would not be used by any group of shareholders in their right mind. If you have voted against this proposal, please consider changing your vote Why would any group owning 20% of our stock seek to do so little as to get a date on the Calendar for management when the same group of shareholders with less effort can compel management to hold a special shareholder meeting on a topic of their choosing.
Door number 1 is the date on the calendar from management that shareholders can frame and hang on the wall and door number 2 takes less effort and compels Management to hold a special shareholder meeting. Thus door number 2, a special shareholder meeting is the clear choice Our current written consent is thus useless. Clearly, shareholders, when made aware of the uselessness of our current write deck My written consent would not approve it. Yet management claims that shareholders did approve it. This shows how management abused shareholder outreach By withholding key information on written consent in order for management to claim and got shareholder approval.
Management failed to mention that there is no formal process to remove false text from management statements next to a shareholder proposal. Thus management gets a free ride and includes false statements next to a shareholder proposal. However, there is a formal process for management to remove false from shareholder proposals that is overseen by the Securities and Exchange Commission. Management made no such Tempt in regard to this proposal. Management talks about a so called shareholder outreach plan.
It It's important to emphasize that such an outreach plan is not transparent, has no objective oversight and depends 100% on whatever Honor system management has in reporting the outcome of shareholder outreach. JPM has the chutzpah to brag about shareholder outreach And then forces shareholders to pay for glossy advertisements, imposing shareholder proposals that gain significant shareholder support. Please vote yes. Proposal 5, improve our current useless shareholder write deck by written consent.
Thank you for that. We oppose this resolution. Our reasons for doing so appear on Pages 99 and 100 of the proxy statement. We'll now turn to Proposal 6. It was submitted by CTW Investment Group.
We've been advised that Ms. Patel will present this proposal. Ms. Patel, are you on the line?
Yes, I am. Can you hear me?
Yes. Please go ahead and start. Okay. Thank you. On behalf of
the CCW Investment Group, I hereby move Proposal 6 requesting the Board of Directors oversee a racial equity audit based on input from stakeholders. A racial equity audit will help JPMorgan identify, remedy and avoid adverse impacts on non white stakeholders and communities of color, particularly in light of its $30,000,000,000 commitment to address racial inequality. When it comes to addressing racial And the communities it serves, JPMorgan has a controversial history. Over the years, regulators have levied numerous fines against The bank related to racial imbalances and its mortgage lending practices. There continues to be a lack of racial diversity in the bank's most senior leadership, And JPMorgan appears to be failing to hire, develop and retain employees of color, particularly amongst its management ranks.
We continue to see that JPMorgan's policies have had an effect on minority owned businesses as shown by the bank's inequitable application requirements for PPP loans during the early days of the COVID-nineteen pandemic. The disparate impact of JPMorgan's practices on communities of color continues even today. Community leaders are currently calling on JPMorgan to waive a $9,000,000 interest payment to a loan made to the City of Chicago Because there are plans to redirect federal funds intended to assist black and brown communities that were hardest hit by COVID towards repayment of the loan to JPMorgan in order to avoid the hefty interest payment. An audit of this nature would provide an objective assessment of the bank's lending, human management and philanthropic practices. The proposal looks to evaluate the effectiveness of the company's policies in addressing racial inequality.
And we do not believe that existing regulatory requirements or inspections are sufficient to ensure that JPMorgan is meeting its commitments. As with any other operational or financial review, the real benefit of the Racial Equity Audit lies in its independence. The auditor must have or the Board. For JPMorgan and its investors, the Racial Equity Audit is an important risk management tool. In the banking industry, trust is paramount.
Changes in public, consumer and employee sentiment have put systemic racism and racial injustice at the forefront of our national dialogue. Concerns about reputation and talent attraction have prompted other major consumer facing companies such as Facebook, Starbucks and Airbnb to conduct these types of audits. The racial equity audit is an important investment in JPMorgan's long term sustainability and value protection. JPMorgan has committed $30,000,000,000 to address racial inequality. Given such a significant sum, investors need assurances that the bank's policies are effective at addressing these issues and that JPMorgan is not acting in other ways that Could negate any positive impact.
Therefore, we urge shareholders to vote for Proposal 6, requesting that the Board oversee a Racial Equity Audit. Thank you.
Thank you. We oppose this resolution and our reasons for doing so appear on Pages 101102 of the proxy statement. We'll now turn to Proposal 7. Mr. Chevedden, I understand you're going to present this proposal.
Are you still on the line?
Yes. This is John Chevedden. This is Proposal 7, the independent Board Chairman sponsored by Kenneth Steiner. Cheryl has requested our Board of Directors adopt as policy and amend the bylaws to require that the Chair of the Board of Directors, whenever possible, To be an independent member of the Board, this policy could be phased in for the next CEO transition. This proposal topic won 52% Support at Boeing and 54% support at Baxter International in 2020.
Boeing adopted this proposal topic in June of 2020. The roles of Chairman and CEO are fundamentally different and should be held by 2 directors, a CEO and Chairman who is completely independent of the CEO and our company. The role of the CEO and Management is to run the company. The role of the Board of Directors is to provide independent oversight of management and the CEO. Thus, there is a potential conflict of interest for a CEO to have the oversight role of Chairman.
After Lee Raymond finally retired as Lead Director at age 82, we now have Mr. Steven Burke as Lead Director. Mr. Burke was runner-up and getting the most against votes at our 2020 Annual Meeting. Mr.
Burke has 17 years long tenure on JPM Board. Long tenure is the enemy of Tenants and director independence is the most important attribute of a lead director. Mr. Burke is also a former CEO. Being a former CEO can make Mr.
Burke the champion of CEO rights at the expense of shareholder rights. People tend to favor members of their peer group. This proposal topic won our 41% support at 2020 JPM Annual Meeting. This was close to or above majority support from the shares that have access to objective proxy voting advice. Unfortunately, most small shareholders do not have access to objective proxy voting advice.
Management is thus getting a free ride on the backs of the Small shareholders who do not have access to objective proxy voting advice and are then forced to rely on the self serving management recommendation. Management promotes the fallacy that shareholders should be apathetic about increasing management accountability to shareholders with this proposal simply because JPM As the average governance practice that a lot of other companies have, the unfortunate attitude of management is that since JPM is average on accountability to shareholders, The management goal is to block improvement. The 41% support in 2020 for this proposal topic was in spite of JPM Management having its hand on the scale by forcing JPM shows to pay for glossy advertisers opposing this proposal topic. Shareholders were again forced to pay for management's glossy advertisements opposing greater accountability to shareholders And this proposal today. Please vote yes, the independent Board Chairman, Proposal 7.
Thank you. We oppose this resolution, and our reasons for doing so appear on Pages 103 and 104 of the proxy statement. Our final proposal is number 8. It was submitted by Ria Ventures on behalf of John Weinstock. We've been advised that Shelly Alpern will present this.
Ms. Alpern, are you on the line?
Yes. Can you hear me correctly?
Yes. You want to go ahead?
Thank you. Good morning, Mr. Chairman, Board of Directors and my fellow shareholders. This proposal asks JPMorgan to make a regular practice of examining its political contributions to ensure that they are congruent with the company's values and policies and to report out on this review. This proposal received 47% in support of Pfizer last month.
Events in recent months have made it very clear why this makes sense. After the January 6 attack on the capital, corporate donations to the politicians Congress who challenged the election results came under nationwide scrutiny. That scrutiny has now brought in to include ties to politicians who support voter suppression legislation. Public records show that in 2020, JPMorgan made at least 30 contributions to members of Congress who challenged the election results. These aren't the first issues that reveal how risky it is for corporations to engage in political spending, and they won't be the last.
Mr. One stock's resolution notes that Bloomberg News reported last fall that one half of JPMorgan's political spending in the 2020 election cycle had gone to candidates the article characterized as, quote, ardent obstructionist proactive climate policy. Public records also reveal how Over the last three election cycles, JPMorgan has contributed at least $2,800,000 to At least 268 candidates and political committees that are working to weaken access to women's reproductive health care, a contradictory stance for a company that invests in programs to improve its retention and promotion of female employees. JPMorgan also gives to politicians who oppose LGBT equality despite its excellent policies on workplace inclusion. After January 6, JPMorgan was reported to be pausing all PAC donations in the coming months.
This is a step in the right direction, But we urge senior leadership to think beyond Band Aid solutions that don't get to the heart of the problem. And the problem is Contributions never succeed in just advancing their own business interests. Inevitably, there is collateral damage. They are inherently fraught with reputation and brand risk. There really are only 2 sustainable options going forward.
Don't make political contributions or tied them to deeply held, clearly articulated organizational values. This is consistent with the Business Roundtable's 2019 declaration under the chairmanship of Mr. Dimon that companies must balance the drive for profits with the needs of customers, employees and communities. Our country and our world face daunting challenges that demand that the business community act with integrity and consistency. Fellow shareholders, if you have not already cast your votes, Please vote yes on item number 8, and thank you for your attention.
Thank you. We oppose this resolution, and our reasons for doing so Here on Pages 105106 of the proxy statement that does complete the introduction of the shareholder proposals. We oppose them for the reasons set forth in the proxy. If anyone has questions regarding any of the proposals, please submit them now using the Q and A field on the website. I would now like to invite Reggie Chambers, our Head of Investor Relations to read questions from our shareholders, particularly those we've already received.
Thank you, Stacy. Our first question comes from shareholder Dionne Puccinella and relates to shareholder proposal 6 on a racial equity audit and report. Dion asked, why would the Board recommend voting against the Racial Equity Audit and Report?
Thank you, Reggie. This is Jamie. The firm is committed to maintaining a culture of respect and inclusion and to advancing racial equity, and we've taken significant steps to combat systemic racism in the communities In which we are present. We believe we are taking appropriate action to address the issues raised in the proposal, and we've embarked on an effective path forward. The work to advance racial equity is complex and we determined to get it right, with our Board providing oversight of our progress and execute our strategy around diversity, equity and inclusion.
In addition to Board oversight, we get feedback and input from internal organizations And from key independent external organizations that are focused on civil rights, human rights and consumer advocacy as part of our efforts to shape and inspect Our progress in our racial equity commitment. Tracking our progress and sharing periodic updates publicly is part of our commitment. This transparency is another key element of our commitment. Given this, conducting additional racial equity audit at this point in time would not provide us With meaningful additional information, we believe our shareholders will be better served by the firm's vigilant focus on building on current methods to maintain a culture of respect
Great. Our next question is also about shareholder proposal 6 On the Racial Equity Audit and Report. A shareholder who chose not to provide their name asked who keeps committing Racial Equity Audit Proposals and how many shares do they have?
Thank you, Reggie. The shareholder proposal number 6 on the racial inequity audit and report was submitted by CTW Investment Group, And they've satisfied the minimum shareholding requirements set by the SEC to be eligible to submit a shareholder proposal.
Great. Thank you, Stacy. We have now addressed the questions that were submitted with respect to the proposal.
Thanks, Reggie. We've now completed responding to the questions on the proposal. It is now 10:33 a. M, and I declare the poll is closed. I will now read the preliminary vote Results that were received immediately prior to the meeting, the final voting results will be reported on a Form 8 ks that will be filed with the SEC Along with the minutes of the meeting.
With respect to the election of the directors, all directors were elected and each director received a majority of the votes cast for and against. No director received less than 91.6 percent of the bows cast. With respect to the other proposals today, the results I read will be the percentage voted for each Resolution to approve executive compensation was 90% 4%. The vote to approve the amended and restated long term incentive plan effective May 18 was 96%, 4%. The vote for ratification of our independent registered public accountant was 95 The vote for proposal to improve shareholder written consent was 47% 4.
The vote for proposal on a racial equity audit was 39% 4%. The vote for the proposal on Independent Board Chairman was 48% 4%. The vote for proposal on political and electioneering expenditure congruency report with 29.6% floor. That concludes all of the formal business. Jamie, if you want to call through during the meeting, now is the time.
Thank you. This concludes the business of the meeting and the 2021 Annual Meeting shows stockholders is hereby adjourned.
Thanks, Jamie. We're going to respond now to general questions and comments submitted by shareholders. As mentioned earlier, we're going to allow 30 minutes to respond to general questions. As a reminder, if you have questions about the services we provide or questions in regard to a personal matter, we will be responding to those A
shareholder named C. Cook submitted the following question. News reports suggest the big banks will no longer be friendly toward fossil fuel companies. As a long time and continued investor in this type of energy, It is becoming a concern that major banks could cause great harm to these companies. Is this true as we have recently seen in the news?
Thank you for your response.
Meeting the needs of our clients is a top priority for the firm, and we will continue to support clients For the capital and strategic support they need as they navigate the low carbon transition. The challenges we face in combating climate change is significant, And we recognize the world will continue to rely on resources such as oil and natural gas until commercial, affordable and low carbon alternatives can be developed The solution is not as simple as walking away from fossil fuels, which is why we're leaning in and working with our clients in the energy and developing solutions. We've announced our aim to facilitate more than $2,500,000,000,000 over the next 10 years on sustainable development and we're growing capacity in our Business to support these needs, such as with our new Center For Climate, Carbon Transition and Green Economy team. This is about the dream that's right for the environment,
Our next question was submitted by shareholder James Fox, who asked, The bank had an excellent Q1. Prospects for the balance of the year are bright and 2020 reserves for the pandemic are being released. And is the Board considering raising the dividend in 2021?
Thanks for your question, James. When we think about the dividend, it's important to remember that our capital use hierarchy Hasn't changed. 1st and foremost, we use our capital to invest in our businesses, communities, employees. After all prudent investments have been made And you may still have excess capital, but the best thing we can do with this excess capital is currently showing is to be dividends or buybacks, Subject to regulatory capital requirements. Beyond that, we won't comment on future dividend actions.
These decisions are sometimes influenced by regulators and always up to our Board.
A shareholder who submitted a question without providing their name asked, JPMC spends a lot of money, Time and effort to put forth a green or environmentally conscious agenda. However, employees are also being asked to come back to the office, creating commutes. Commuting will increase emissions as bad for the environment in a number of ways. How is the company planning to adjust for this unnecessary climate cost?
To this shareholder, 100,000,000 people go to work every single day and have been for the last year. That includes firemen, police, sanitation, hospitals, the United States military, manufacturers, retailers, our branches, etcetera. We think it's time to go back to work and we're going to do it safely and intelligently and attack the climate problem with material ways,
Our next question was submitted by a shareholder who did not provide their name. It is representative of several shareholder questions on the same topic. What steps are being taken to have a more diverse Board of Directors?
Information about the composition, attributes and diversity of our Board is available on Pages 1213 of the proxy statement. When recruiting direct to candidates, the Board looks for candidates with a diverse diversity of experience, perspectives and viewpoints, including diversity With respect to gender, race, ethnicity and nationality. For example, over the last 3 years, we recruited 3 highly qualified new directors And just so half, all 3 are women.
We have another question that was submitted by a shareholder who did not provide an investor who asked, How do you justify the very large compensation packages for your Board of Directors of both cash and stock? I realized That show is essentially paid to have you make sure the stock performs well. However, are you putting the performance of the stock first in your compensation packages?
The governance committee finally reviews the Board's responsibilities of director compensation against the practice of peer firms and makes any recommendations to the Board. Our direct to compensation program is unchanged since 2017. A significant portion of direct to compensation is limited in stock, which directly lines the shareholder interest. Additionally, directors are required to retain all shares purchased and received along the Board and may not hedge or pledge JPMorgan stock We further strengthened the alignment with long term shareholders.
Great. We received multiple shareholder questions about political activities and statements of the firm's management. One of these questions, representative of the topic, was submitted by shareholder David Moore, who wrote, why has the company been visible and vocal specific
In response to Mr. Moore and other shareholders who have asked similar questions, we recognize that our employees, our clients and our shareholders have different views on many issues. 1st and foremost, we deeply respect and welcome all points of views in an effort to have a constructive dialogue on the policy challenges we face as a company and as a nation. Because these challenges are so important, JPMorgan Chase believes that responsible corporate citizenship demands a strong commitment to healthy and informed democracy Our business is subject to extensive laws and regulations and change in such laws can significantly affect How we operate our revenues and the cost incurred. Because the impact public policy can have in our businesses, employees, communities and customers, We engaged with policymakers on a range of issues, including banking, financial services, cybersecurity, workforce development, small business, tax trade And inclusive economic growth among others, all to advance to protect the long term interest of the firm.
More broadly, we believe companies like ours have an obligation to put their business All of the stakeholders for our firm, this means we're leveraging our business and policy, expertise, data capital And global presence to help drive an inclusive recovery, expand access to economic opportunity and accelerate sustainable and client solutions.
A shareholder named Clyde Brantford submitted the following question. Is there any plan to have a stock split in the future? And what would be the criteria for implementing the split?
We have no plans to do one in the immediate future and the Board looks at this periodically.
We received multiple shareholder questions about cryptocurrency. The first is from Cecilia Guso, who asked, what is the company's policy on cryptocurrency?
Complex question. We use the blockchain here, which is a technology, not necessarily a cryptocurrency. In cryptocurrency, we think that the regulators And the legislators will be looking at proper rules and regulation of how cryptocurrency should be treated. A lot of our clients are asking, Can we help them buy or sell cryptocurrency and we're investigating that as we speak.
Our next question is also about cryptocurrency. Sergey Oroslav asked, What is the JP Morgan Chase doing in anticipation of a federal digital currency? What effect will such a change have on financial institutions such as JPM?
Yes. We are closely monitoring the situation and central banks around the world are looking at it and depending on how they implement it, it could have Anywhere from small to large effects in the firm and when we have some report on it, we will report to the shareholders on it.
Next question. Multiple shareholders asked about executive compensation. A representative question comes from a shareholder named Whitman Knapp, who asked why are the executives of the company receiving such high compensation packages?
JPMorgan Chase is 250,000 employees, and we need some very talented employees We have made choices to work elsewhere to work here to make sure we do the best we can for our company. And that's across the whole spectrum with lawyers, technologists, engineers, Investment bankers, there are always choices and we try to be very fair about compensation across the full board. I should also point out that starting side of this company is something like $33,000 a year, which does not include $10,000 to $13,000 of benefits, Which include medical, retirement, etcetera. So and all of those folks give an opportunity to grow and expand their careers while they're here. So We try to be very good to all of our employees.
The following question also about employee compensation was submitted by a shareholder who did not provide their name. During the pandemic, our company has successfully conformed to remote BAU. However, although our company has done well during these circumstances, it appears as though lower level employees, 602 and below, Received minimal, if any, annual incentive compensation, which is a bit disheartening. Can you please advise why this has occurred? Those employees that are 602 Below are the employees holding the company together, doing the work and working 12 plus hour days remotely, while also caring for children.
I don't really disagree with what the person said. We're deeply appreciative and grateful for employees' hard work, dedication, perseverance, Especially the year we had to quickly adapt the fundamentals of new ways of doing business. A special note of gratitude goes after our frontline colleagues We've been diligently serving our clients, customers and each other during the COVID-nineteen crisis. We also recognize that many of the employees have been facing Personal obligations to parents and caregivers, for example. We appreciate the way our employees have managed these responsibilities and know that it hasn't been easy.
We remain committed to support our employees and their families. Examples of our efforts in 2020 include, we raised the minimum wage for our U. S.-based overtime eligible employees between $20 an hour depending where they work, while providing annual benefits package worth about $13,000 We made a special $750 special award to employees earning less than $60,000 in 401 contributions in the U. S. We launched a lifelong learning education benefit program, which provides employees access to 300 accredited programs.
Increased payee provides non primary parental caregivers following the birth or adoption of a child. We provide additional benefits and support for employees And their families during the pandemic. For example, we awarded over $100,000,000 in special payments to employees whose jobs required continued on-site work With a focus on those annual compensation of less than $60,000 We enhanced our paid time off policies, including an additional 5 days off For all employees who handle COVID related challenges, 14 days is an employee contracted with a close contact with someone who contracted COVID-nineteen. We provided additional support for employees with childcare needs. We increased the number of covered mental well-being assisted sessions, and we provided additional resource support For coping with the challenging topics such as topics of fear, anxiety and loss.
A shareholder who did not provide their names may have the next question. Which group, customers, rank and file employees, shareholders, management, do you feel will be most greatly impacted by the increase in the corporate tax rate. Why? What effect will it have on the profitability of the company as a whole?
So obviously, if the tax rate goes up, it will reduce the profitability of the company. But I think a far more important issue is the United States. If you want to maximize healthy growth in the United States, you need to have a competitive international global fax system. And that's been our focus to make it internationally competitive and fair to maximize growth in the United States. The more healthy growth in the United States, the better it's for all Americans.
Our next question comes from shareholder Mark Dubow, who asked, what is the bank's outlook for net interest margin based on current 10 year bond yields?
We would expect it to grow marginally over the next couple of years if they stay where they are.
Shareholder Lila Holtzman submitted our next question. Lila asked, being able to compare finance emissions across global financial is of critical importance to investors. Consensus is converging on the Partnership for Carbon Accounting Financials, PCAF. What would it take for JPMorgan to join its peers and commit to PCAF? Will JPMorgan provide a clear transition plan as to how it will reach its
We've already provided our clear transition plan. We made our Paris alliance against commitments last fall. We've now set and announced our initial targets. We published our carbon compass methodology in our recently released ESG report. We said we're going to include new sectors in our commitment over time, and we'll keep you all updated on our progress.
This shows we're not just saying the right thing, we're doing the right thing.
Our next question comes from a shareholder who did not provide their name. The shareholder asks, since CEO James Dimon is on the Presidential Committee of Economic Advisors. I would respectfully request that Mr. Dimon urge the Biden administration to be a little less aggressive with government spending. The U.
S. Has already had 2 multi $1,000,000,000,000 stimulus packages within the past calendar year. I'm hoping that the U. S. Treasury Secretary Janet Yellen Thanks for your leadership and influence in the U.
S. Economy.
I'm not on a Council of Economic Advisors or Any form of government body providing guidance to the administration. I have noted the President and spoke with the administration officials, but not in any form of advisory capacity. Regarding the substance of the question, I think we need a public policy to take into consideration concerns over wasteful spending and inflation We're recognizing the importance of public investment. And it's very important, I can't overemphasize this, helps that we need to not just spend the money, spend advisory. If we spend it wisely, it will help healthy growth, it will help productivity and help Americans.
If we spend it poorly, which has been the history of this country, by the way, If we spend it poorly, it will make growth less, productivity lower and inflation higher.
Great. The following question concerns the financing of a pipeline and was submitted by Micah Bennett of the Stop EACOP Coalition. I'm asking a question on behalf of the StopEACOP Coalition, an alliance of local groups and communities and African and International Organizations. The East African crude oil pipeline is a proposed 8 98 mile pipeline through Uganda and Tanzania. Construction of the pipeline threatens to enable the opening up of Critical ecosystems, including the Machesman Falls National Park to oil extraction.
It will cause large scale displacement of communities and pose grave risk To protected environment, water sources and wetlands in both countries, in addition to releasing massive amounts of carbon. The net zero pathway announced today by the IEA confirmed that new fossil fuels projects like this are incompatible with keeping global heating Can the bank confirm whether or not the plan to finance the East African crude oil pipeline?
Reggie, thank you for asking the question. I don't know the answer to it. I'm going to you can Reggie will get back to you.
You got it. All right. The following question concerns CEO pay and was submitted by a shareholder who did not provide their name. What is the total CEO pay for 2020 and for 2019?
It was $31,500,000 both years, most of which is in stock, which is performance based.
The following question concerns accounting rules and regulations and was submitted by Mark Zaschen. How will the company approach CECL in 2021 beyond?
Well, we've made extensive disclosure about CECL, And I just refer you to the disclosure that we made in the past.
Awesome. The following question is submitted by Seida Efren. In 2015, JPMorgan committed to not support the global controversial Adden Carmichael Coal project in Australia. However, JPMorgan is continuing to support Addon by raising capital for other companies such as Aydin Ports, which is part of the Carmichael project, owning the port and rail haulage of coal operations. Earlier this year, Adani Ports Was removed from the Dow Jones Sustainable Index after its involvement in the Carmichael project and its business dealings with the Myanmar military were highlighted.
Why does JPMorgan still consider this company fit for financial support?
We are pronounced a factor in that one.
The following question comes from Scott Sheppard. I'm Scott Sheppard with the National Center For Post Policy Research. In response to a question posed by a colleague of mine at the 2019 meeting, he asserted that, We have not and do not de bank JPMorgan Chase customers in response to their political activities. Can you again confirm that you do not de bank for political reasons? And can you explain in detail the circumstances in which accounts are shut by senior management demand without explanation?
I can confirm that we don't de bank people for the political considerations. People are de banked usually because we file activity reports and their suspected bad behavior regarding money laundering, human trafficking, sex trafficking, We are not we are required by law not to tell them why we're closing the account.
We received multiple shareholder questions about cutting emissions and financing fossil fuel companies. One of these questions, representative of The topic was submitted by shareholder Jordan Giacionia, who wrote, we must cut global absolute emissions in half by 2,030 if We are to limit climate change to 1.5 degrees. President Biden last month committed to cutting U. S. Emissions in half by 2,030.
But JPMorgan Chase's new 2,030 targets, which are limited to carbon intensity, are fully compatible with increasing absolute emissions. Ahead of the COP26 climate talks in Glasgow, was JPMorgan Chase commit to cutting the emissions from its fossil fuel portfolio at least in
Mike, we recently made some announcements about what we're doing, and we think we'll be able to accomplish something like that. If you look at what we're doing, it's very detailed, very mature. I just don't want to point out our shareholders, even from and we're in favor of doing these kind of things intelligently, reducing carbon intensity. But even if America gets down 50% and India and China don't get it down at all and they have under Paris, Remember that they have no obligation in the paraclimic court to reduce CO2 at all. In fact, they're probably going to be increasing dramatically for the next 10 years.
Then you won't accomplish Anything about trying to help our climate.
The next the following question is on the topic of political contributions It comes from Douglas Cha. Will the company continue to refrain from making political contributions to members of Congress who voted against Certification of the 2021 U. S. Presidential election and maybe even dissolve the corporate pack as Charles Schwab and other competitors have done.
We are definitely not going to dissolve the pack. We think being part of the political process is a good thing. I would not be against getting rid of the pack if everyone were Tax, debt, I think, is there and perfectly reasonable. Legislators would have to make that possible. We are going to be announcing soon how we're going to operate the pack.
We believe in democracy, so it does not mean that every time we disagree with someone, We're not going to give money or engage in dialogue with them. This is an oath to democracy, folks. You don't have to agree with people to sit at the table with them and have conversations about what's going
The following question relates to stakeholder Capitalism is from Gerald Matthews. Mr. Chairman, Gerald Matthews again from the United Brotherhood of Carpenters. The topic of shareholder capitalism as an alternative to stake to shareholder capitalism has received considerable attention recently. As long term pension fund investors, Carpenter funds appreciate the sentiments embodied in the stakeholder capitalism perspective, but feel that execution could be complicated.
Could you discuss the Board's perspective on the concept of stakeholder capitalism? And what principles the Board would use to balance the interest of various stakeholders
I think when people sort of shoulder capitalism, They get confused that short term profit taking, reputation profit taking is a way to build a company. It's ironic that's the worst way to build a company. You cannot build a company if you do a great job for customers over time. Customers do not have to come back with the choice of choices. You cannot build a great company if you don't have great employees.
It takes years of training and building up the right kind of employees over time. You cannot build a great company if you aren't accepted and trusted in the communities in which you operate. You don't have to weigh and balance them all. You have to do them all. It's kind of like a team.
I think Paul has got to do their part well. If you fall down in any one part, the company can sail.
The next question relates to coal our coal policy. It comes from Jason Bisteroff. Yesterday, the
The presidency of
the Glasgow Climate Conference calls for private finance institutions to, among other ambitious commitments, commit to phasing out coal before the conference in November. JPMorgan Chase's coal policy lags behind U. S. And global best practice. Your bank has no commitment to exit coal power And no restrictions on financing companies be building new coal power, unlike Citigroup and a number of global banks.
The bank's coal mining phase out threshold of 50% of revenue is very high, allowing continued financing of major miners like Glencore. By the UN Climate Conference in Glasgow in November, will JPMorgan Chase commit to phasing out all coal finance, including power and mining as well as prohibiting financing for companies
I'm just I mean to
this show, I'd just like to point out that you can have all the banks in the world, not finance collar companies, They may be financed by private companies, international investors, etcetera. We have terrific policies in place that will dramatically reduce the carbon intensity of coal producers, And we're helping some of the coal producers in their transition bill. Some of the assets specifically to help them get more into renewables and things like that. We've made a lot of commitments that we think are intelligent and wise and well described. And we think a lot of people making commitments that we don't actually even understand what they are.
Next question relates to financial literacy, in particular, in urban poor communities. This comes from Tom Wayne. His question is Tom Wayne from a rural area near Columbus, Ohio. I recently encountered a man who described his child's 4H project where the child raised some ducks and later sold them after a year. It was to teach him about working, saving and investing.
With JPM wants to try this approach in the urban poor communities, Something like a 4 H urban program for urban kids to learn about capitalism.
I would have to look into this, it sounds interesting, We do believe in the concept of financial education. So if you look at our new community branches, which we have 6, we have a home in LA, in New Orleans, in Chicago, Part of the community branch is to have people come in and learn about savings, investing, financial education. We're also Asking governments, teachers, schools, K-twelve to start teaching financial education, we think it's important that the American public understands what investing in savings is all about.
Great. And we have another climate change related question. This comes from Mariela Montero. JPMorgan Chase has committed to strengthening its palm oil restrictions to require producer clients to adopt no forestation, no peat, no exploration, MDPE policies. This is a welcome move, but palm oil constitutes just 10% of JPMorgan Chase's forest risk financing.
Pulp and paper constitutes 70% and beef, rubber, soy and timber are crucial as well. By the UN Climate Conference in Glasgow in November, Will JPMorgan Chase extend its NBPE policy to encompass the full range of forest risk commodities?
The answer is no, but we are looking at how those industries should be incorporated in our carbon transition policies.
Great. The next question comes from Adam Neville. Good morning, all. My name is Adam Neville, and I'm attending I'm attending today on behalf of Future Coalition and as an organizer within the youth climate justice movement. Chase's first banking program is targeted at young people under arguably with the objective of creating lifelong customers.
However, young people are becoming increasingly aware In critical, Chase's assistance on financing fossil fuel companies like Enbridge, which is building the Line 3 tar sands pipeline. Young people are looking for more ethical banking options and are increasingly skeptical of vague climate commitments. To respond to this emerging Demand of young customers for banking that respects our plan and indigenous sovereignty, while Chase commit to stop financing companies that are
I think first of all, the question has nothing to do with the age of the person. I think we've already described our climate policies, which we think are detailed and profit policies for our country going forward That can actually help solve the problem.
Great. The next question comes from a shareholder who did not provide their name. Are there programs to encourage employees to be vaccinated?
Well, we've been quite clear. I think I find all of our employees vaccinated. We've not mandated it, but we want all of our employees to be vaccinated. We think it's the right thing to do, not just for themselves, It's all of the people inside the company and we will consider at 1 point mundane it if it becomes legal.
Great. The next question comes from Alderman Alderwoman of the City of Chicago, 33rd Ward, Rosanna Rodriguez Sanchez. JPMorgan provided a loan to the City of Chicago in December that was a $9,000,000 per year interest payment.
Currently, there
are plans to redirect almost $500,000,000 in Chicago's federal recovery money, which is intended to help Black and Brown communities in order to avoid the interest payments to JPMorgan. In light of the company's pledges to racial equity, will JPMorgan commit to waive interest and And CEO, Jeff Dimon, meet with me and members of my community to talk about how we can ensure our relief money goes towards a recovery for our hardest hit communities.
Well, we for the I'm a Mayor of Chicago. I miss the city, and I'd be happy to have you meet the proper people on this issue. I don't know about the specific issue that you just raised. We'll look into it and we'll be happy to get back to you.
Dougie, maybe we have time for one more question.
Perfect. Last question is from Mark Fashin. Is it harder for a bank of your size to deal with the efficiency ratio?
Not really. I think we have very strong economies of scale, which leads to a good efficiency ratio. I want to point out that we're not always trying to improve it, we take a lot of our profits, etcetera, reinvest them in future endeavors.
Thank you. Our discussion period has now concluded. If you submitted a question that was not responded to or would like additional information, We invite you to contact our Investor Relations team at the e mail address included on the website. Jamie, would you like to say a few words in closing?
Yes, Stacy. We greatly appreciate the views of all of our shareholders and how thoughtful they were engaging us in this process. The entire Board takes their feedback very seriously. We'll continue to incorporate their input in how we govern the company. We'll continue to build towards being best in class in every way.
Thank you all for being on this call.
This concludes today's webcast. You may now disconnect.