Good morning, everyone. My name is Tony Horan, and I'm proud to be and happy to be associated as Corporate Secretary of JPMorgan Chase. Welcome to the Annual Stockholders Meeting. We are going to have a short video to begin the meeting, after which Jamie Dimon and Steve Cutler will come up on stage to begin the formal proceedings. I think we're ready to start the video, Tim.
Thank you.
Detroit is a great iconic American city. There are many things that make Detroit great. I'd start 1st and foremost with its people.
Detroit people have grit. They are persistent. They have tenacity.
Tough, hardworking, but friendly. We've been part of the Detroit community for 80 years.
The future of Detroit is something that we have a
vested interest in. JPMorgan Chase is really on the leading edge of investing in Detroit's revitalization. There are so many opportunities in this city. Our values have always been to support your clients, support your communities. We don't see any conflict whatsoever in terms of doing both.
So Detroit is critical to us. We've been there. We want to see it thrive. We want to see it grow. We happen to be a very good company, but we take it very personally that way.
And here we're doing is not just philanthropy, it includes philanthropy. And that's helpful because sometimes philanthropy is community development.
This capital will help build charter schools, affordable housing, help small businesses and neighborhoods throughout Detroit.
We're taking abandoned houses in the city and we're auctioning them. And what JPMorgan Chase is doing is enabling people to get mortgages to move in.
What JPMorgan's investment and focus, Hope, allows us to do is to train more students and to make certain that there's a birth to college pipeline for people.
In Detroit, we're actually bringing the full force of JPMorgan there. Philanthropy, technology, finance, community development, we're doing all of that in the revitalization of Detroit. Some of our money is going to help with the completion of a big project called M1 Rail, which is going to connect the Midtown and the Downtown areas. The revival is really taking place. The Downtown and the Midtown area are really bustling.
We have huge numbers of young people moving into Detroit. The Banco seat is over. The street lights are being turned back on. Businesses are coming back in.
One of the things that I think is really exciting about this partnership with JPMorgan Chase is that they really did their homework.
They came in and spent a huge amount of time understanding the workings of the government, understanding the workings of the neighborhood and the business community. There isn't a day goes by somebody isn't in my office with a plan for a new apartment building, a plan for a new business, a plan for a new office building. It's very exciting. I hope it will spark other companies to follow us and make similar commitments. This is aggressive stuff that the bank is doing and we are most appreciative.
This allows us to do what we do to fulfill our own mission and purpose. If we can see small businesses created, people going back to work, neighborhoods filled again with families and children, that's going to be a great thing for Detroit and it's going to be a great thing for all of us. It will eventually be an example of great American resilience. Good morning, ladies and gentlemen. It is 10 am, and I'm pleased to call to order the annual meeting of shareholders of JPMorgan Chase and Company.
I am Jamie Dimon, Chairman of the Board and Chief Executive Officer of JPMorgan Chase and Chairman of this meeting. The videos you just saw shows our commitment to the city and people of Detroit. In the audience today are a number of our employees in the Detroit area. I want to thank them, give them a special thanks for the great things they're doing for their city and a special welcome to be here today. With me today is Steve Kuller, our General Counsel.
Steve will serve as secretary of this meeting and lead us through the agenda. Steve?
Thank you, Jamie. I'd like to add my welcome to everyone here today. I know that many of you are customers as well as shareholders. If you have any questions about the services we provide, we have a team from our executive office and a team of mortgage specialists with us here today and they'll be happy to assist you. I'm now going to ask Patricia Baker, Head of Consumer Services to stand.
I'd encourage you to stop by the customer service tables immediately outside the meeting room and share your comments or questions after the meeting with her and other representatives here today. Okay. As a reminder, the use of PDAs, cell phones or other electronic equipment or mobile devices to record, photograph or video the meeting is prohibited. Now we're going to turn to the business of the meeting. I have the affidavit of mailing of service of the meeting, the proxy statement, the form and the annual report.
The shareholder list is available for inspection and representatives of IBS Associates Inc. Have been appointed to serve as inspectors of election. The meeting is properly convened, a quorum is present and the proposed resolution set forth in the proxy statement will be filed as part of these proceedings. It is now approximately 10:0:3 a. M.
And the polls are open and will remain open until we announce that they have been closed. We've received proxies up until just before the beginning of the meeting representing over 86.7% of the outstanding shares eligible to vote and these have been voted in accordance with shareholder wishes. If there are shareholders present who have not yet submitted their proxies and would like to do so, we will collect them after all proposals have been submitted and they'll be reflected in the final vote results. Remarks today may contain forward looking statements. Please refer to the agenda and to our annual report on Form 10 ks filed with the SEC for a disclaimer regarding such statements.
That completes the necessary formalities. Jamie will next introduce the directors and comment on the state of the company. Jamie?
I would like to recognize all of our directors. If I can ask each director to stand when I introduce you, but please hold your applause after all the directors have been introduced. Your directors are Linda Baumann, James Bell, Crandall Ballz, Steve Burke, Lee Raymond and Bill Weldon. I'm very proud to tell you that Directors and the commitment you're Director of this company have played a huge part in his continuing ongoing success. You can all sit.
Thank you. In addition to Directors, we also have with us today Michael Kelly, our audit partner from PricewaterhouseCoopers. There you are. Thank you for being here, Michael. We now have some comments from Lee Raymond, our Board's Lead Director.
Lee?
Good morning and thank you, Jamie. On behalf of my colleagues on the Board, I'd like to thank our fellow shareholders of JPMorgan Chase for participating in today's meeting. I want to take a few minutes to speak about some of the matters that have been especially important to the Board since our meeting last year. After my remarks, Jamie will speak to you about the company's performance and current priorities. In providing oversight of and guidance to senior management and evaluating their performance, the Board considers not only financial results, where the company has achieved record net income in 4 of the last 5 years, but also how well the company is meeting the needs of customers and clients, recruiting and developing a highly capable and diverse workforce and operating prudently within a well developed framework of financial and risk management and controls.
How the company does these things is critical. In the past year, the Board and management have continued to focus on resolving outstanding regulatory and litigation matters. There are still some major outstanding issues including some related to our foreign exchange business which you may have read about. We are determined to resolve these matters in the best interest of the company and you, its shareholders. Management has with Board oversight taken substantial steps to reaffirm the historic commitment of the company and each employee to do 1st class business in a 1st class way.
In December of last year, in response to a request by a shareholder group led by the Sisters of Charity of St. Elizabeth, we published an in-depth report on how we do business to describe actions that the company has taken to address recent challenges and what the company is doing to always improve. I note we have a number of employee shareholders in the audience with us today. In addition to thanking you for the work you do, I want to emphasize to each of you how important your role is in making this effort and enduring success. On other governance matters, the Board continues to be actively engaged in oversight of the company's strategy and progress against its goals.
Successful pursuit of our strategy will enable the company to serve our clients, customers and communities, meet regulatory expectations and continue to return capital to shareholders through dividends and share buybacks. As part of our oversight role, we are also engaged with shareholders and several board members meet often with the key regulators. We are focused on board and management talent for the long term benefit of the company. The Board's governance committee frequently considers potential Board candidates. And in the past 4 years, we have brought on 4 new directors.
For management, we are familiar not only with Jamie's senior management team, the operating committee, but well beyond that. We are deeply impressed with the integrity, talent and dedication of the senior leadership of the company and the strength of the pipeline both in the near term and the longer term. Today's management and shareholder proposals address a variety of compensation and governance issues. On compensation, during this year's outreach to shareholders, we have heard some express a strong interest that at least the portion of the restricted stock units that we award as part of incentive compensation be other than RSUs that vest with the passage only of time. To put it another way, they have asked why we don't tie the vesting of a portion of the awards to a predetermined performance metric.
They generally did not question the actual level of compensation, but the structure of a component of compensation. We believe the company's practices have resulted in compensation properly aligned with the performance and the shareholder interest. But we acknowledge the importance of the question on structure. The Board's Compensation and Management Development Committee has previously considered alternative structures for a portion of an incentive comp, we will continue to do so taking into account the feedback we have received and we'll update shareholders at an appropriate time. As the Lead Independent Director, I guide the Board's annual self assessment.
In coming months, we will consider the feedback at this meeting on each of the proposal as well as today's votes and questions and how we then can enhance the Board's effectiveness. I'd like to take thank you for taking the time to hear this and I'd like to turn this back over to Jamie for the rest of the meeting. Thank you.
Thank you. So we're pleased to be here in Detroit today, a city where we've been doing business for more than 80 years and where we're the largest consumer, commercial and investment bank in Detroit. In addition, we have 2,400 employees in Southeast Michigan we lend tens of 1,000,000 of dollars to commercial projects like Capitol Park, which is the newspaper today, where we celebrated a groundbreaking yesterday. Detroit is also a great example of our company work. We're able to use our size, scale and expertise to be a positive contributor to society.
In addition to the existing banking business that we do supporting Detroit's consumers and biz companies, we did something special in Detroit. We literally brought all of our resources to bear in a unified coordinated way, which we've never quite done before to try to help the city of Detroit. 1 year ago, JPMorgan made $100,000,000 investment in Detroit's comeback. Our commitment includes investments, philanthropy and perhaps more importantly, our human capital and brainpower to work in tandem with a set of city leaders to work towards a common purpose. And our interest in undertaking this effort was made possible because of our faith and extraordinary work in towns of Mayor Duggan and Governor Snyder.
They are practical, pragmatic, collaborative and results oriented. In fact, everything we have done to help is a result of asking the city's leaders what they really needed and then working with them to come up with some creative innovative solutions. For example, we expanded the city's efforts to map every single parcel in Detroit and provide the technology so the residents can use their phones, continue to update the database. This allows for proper planning and redevelopment. And we help provide financing for people who want to purchase land or to buy and or renovate homes.
Now I'll turn to your company's performance in 2014. Last year, JPMorgan earned a record $21,800,000,000 in net income on revenue of $97,900,000,000 In fact, we've delivered record results in the last 4 out of 5 years and we hope to continue to deliver in the future. Importantly, our financial results reflect strong underlying performance across our businesses. Over the course of the year, our 4 franchises maintained and even strengthened our leadership positions and continue to gain market share, improve customer satisfaction and improve innovation. We also continue to deliver on our many commitments including business simplification, regulatory requirements, controls, expense discipline and capital Aside from our financial performance, our company continues to serve our clients and to make a positive impact on our communities.
During the course of 2014, JPMorgan Chase provided credit or raised capital of more than, and get this, 2.1 $1,000,000,000,000 for our clients. In addition, we have hired nearly 8,700 military veterans since 2011 as a founding member of 100,000 jobs mission, which now has new goal of 300,000 jobs. We are there to help small businesses. We provided $19,000,000,000 of credit to U. S.
Small businesses, which allowed them to develop new products, expand their operations and hire more workers. In total, we provide $197,000,000,000 of credit to consumers and we provide credit and raise capital of more than $75,000,000,000 for not for profits, government entities including states, municipalities, hospitals and universities. We have an outstanding franchise and our company has emerged as an endgame winner. However, we also know that we need to earn continue to earn that position every day. My predecessors and one who is here today Vern Istock worked for decades to try to get to this point and many companies, in fact most companies did not survive.
Being a top global franchise is invaluable in any industry and we know that future success is not guaranteed, we are in a very good place. Across our businesses, our margins and returns have been quite good even as we're investing for the long run. These investments include investment in technology and infrastructure as well as organic growth opportunities including new retail branches, new wholesale offices outside the United States, new Chase private client locations, commercial banking expansion cities and the addition of small business bankers. We are also focused on other exciting new initiatives including payments, big data and JPMorgan Chase Institute. In addition, our businesses have been gaining market share in recent years and that can only happen when you're creating happy clients.
Importantly, our mix of business works for clients and for shareholders. We are not a conglomerate of separate unrelated businesses. We are an operating company providing financial services to consumers, companies and communities. There are both costs and benefits related to our size and complexity, but because of our size and stability, we can continue to support our clients in good times and more importantly in the toughest of times. And we will always continue to build for the long term to manage through the cycle and to be prepared for those toughest of times.
While there always be cycles, the outlook for long term growth is excellent. The needs of the global economy are large and still growing and the needs of our clients are substantial and still growing. Corporate equity and debt issuance could grow 20% to 30% in the next 5 years and global client demand could grow an additional 20% to 35% in the next few years. JPMorgan's role as an underwriter of securities and investment manager, provider of payment services in consumer core banking and as a market maker places the center of these key money flows. And we will continue to successfully navigate the new global financial architecture and we are well in our way to building not just a fortress balance sheet, but fortress controls.
We have meaningfully simplified the company, shedding businesses, reducing products and materially derisking by reducing certain types of clients that can create too much risk in the new world. And we made huge strides on our control agenda to ensure systems, practices, control, technology and culture meet the highest standards. We are fortunate that our strategy will essentially remain the same, which allows us to avoid the upheaval both internal and external with clients that often comes when strategies need to be changed dramatically. The financial service industry will ultimately be far stronger and safer because of new regulations and I believe the future will be bright for well run banks. As I look ahead, I want to point out that not only do we have a solid strategy in place, but we have a fully engaged Board, an exceptional management team and a strong corporate culture.
We want to be a standard bearer in the industry when it to meeting the heightened standards demanded by our regulators and not just because it's required, but because we think it's the right thing to do for our shareholders, clients, employees and communities. This starts with the Board of Directors and your Board is fully engaged in all critical matters of the company from saying the agenda of Board meetings to reviewing strategy, determining CEO comp and succession planning. Our Board members also increasingly engaged in both regulatory and shareholder affairs. And importantly, the full Board meets without the CEO at every Board meeting, a practice that goes back more than a decade and before it was mandated and one that allows for open conversation among the directors about the company and the CEO. We also have a strong corporate culture, but we will continue to strengthen it.
Acknowledging mistakes and learning from them is a fabric of the part of the fabric of the company. We recognize that we have made a number of mistakes, some of them quite painful and costly over the last several years. One of the things that we have learned that we need to redouble our efforts around culture, not reinvent it, but recommit to it, ensure the enduring strength of the institution. We also have a very strong global management team comprised of individuals who have significant tenure at the firm and who are focused on getting things done and getting them right. As good a team of senior leaders as I've ever had the privilege to work with, they all possess exceptional character, culture and capabilities.
Let me close by thanking our nearly 250,000 employees. I wish all of you could see our employees and your management team at work, particularly in the most challenging times. If I did, I know that you, like me, would be filled with pride. Day in and day out, they are the people who serve our clients, community and shareholders resolve resiliency. I deeply appreciate all of their hard work and dedication of all the employees at JPMorgan Chase.
Thank you.
It's now time to turn to the proposals that are in the proxy statement. I'll introduce the management proposals and then invite shareholder proponents to introduce their proposals. After all the proposals have been introduced, we'll then have a general comment Q and A period. I'll now move all of the management proposals that set forth in the proxy statement and these are for 1st, the election of directors 2nd, an advisory resolution to approve executive compensation 3rd, ratification of our independent registered public accounting firm PricewaterhouseCoopers, a representative of which is here today and then 4th, approval of an amendment to our long term incentive plan. I'll now ask the shareholder proponents to introduce their proposals in the order in which they appear in our proxy.
Proponents, we ask that you limit your time to 3 minutes each and confine your comments to the subject matter of the proposal being presented to be sure that all proponents have an opportunity to present their proposals today. We have a clock with lights that will turn yellow after 2 minutes and red after 3. There are 2 standing microphones. After I've recognized you, please proceed to the microphone nearest you. We ask that other speakers allow all the shareholder proposals to be presented and wait until the general Q and A period before proceeding to a microphone and providing their comments.
Okay. Proposal number 5, which is for an independent Board Chairman, was submitted by Mr. Kenneth Steiner. We've been advised that Father Seamus Finn will present this proposal. Father Seamus, I saw you earlier.
Yes, there you are. Please go ahead and introduce the proposal.
Good morning, everyone, and good to be in Detroit and glad to be at the AGM of JP Morgan Chase. I'm presenting this proposal on behalf of Kenneth Steiner of Great Neck, New York. Resolve the shareholders request the Board of Directors to adopt this policy and amend the bylaws as necessary to require the Chair of the Board of Directors whenever possible to be an independent member of the Board. Board would have the discretion to phase in this policy for the next CEO transition implemented so it did not violate any existing agreement. If the Board determines that a chair who was independent when selected is no longer independent, the Board shall select a new chair who satisfies the requirements of the policy within a reasonable amount of time.
Compliance with this policy is waived if no independent director is available and willing to serve as chair. Shareholders according to Mr. Steiner are best served by an independent board chair who can provide a balance of power between the CEO and the board empowering strong Board leadership. His primary duty of the Board of Directors is to oversee the management of a company on behalf of shareholders. A combined CEO chair creates a potential conflict of interest resulting in excessive management influence on the Board and weaker oversight of management.
Numerous institutional investors recommend separation of these two roles. For example, California's retirement system, CalPERS, principles and guidelines encourage separation even with a lead director in place. Many companies have already have a separate chair and independent CEO. An independent share is the prevailing practice in the United Kingdom and many international markets and is an increasing trend in the U. S.
This proposal topic won 50% plus support at 5 major U. S. Companies in 2013. So I move the shareholder proposal on behalf of Mr. Steiner.
Thank you, Father.
We oppose this resolution and our reasons for doing so appear on Page 84 of the proxy statement. We'll now turn to Proposal 1, lobbying. Proposal number 6 was submitted by the Sisters of St. Francis of Philadelphia, and we've been advised that Sister Nora Nash will present this proposal. Sister Nora, I saw you earlier as well.
Please go ahead.
Yes. Good morning, Mr. Chairman, members of the Board, fellow shareholders. My name is Nora Nash, and on behalf of the Sisters of St. Francis of Philadelphia, Walden Asset Management, New Economy Project and other co filers, I move proposal number 6.
Altogether, proponents hold up to $1,000,000 shares. We strongly believe the transparency and accountability in corporate spending aimed at influencing public policy are in the best interest of JPMorgan Chase and investors. Without a peer system ensuring accountability, corporate assets can be used to promote public policy objectives that may not benefit the company and pose real reputational risks to JPMorgan Chase and its shareholders. JPMorgan Chase has lobbied extensively against financial reform aimed at protecting our economy from another financial crisis. The extensive negative publicity generated by this lobbying, particularly while the company is under investigation from According to the 2015 Harris Corporate Reputation Survey, JPMorgan Chase ranked in the bottom 20th of the most 100 visible companies with a reputational risk classified as poor.
We are concerned that the company's current lobbying disclosures are inadequate and actually hide how our funds are being used for lobbying because they omit critical information, particularly payments made to trade associations for memberships and lobbying. In 2014, trade associations acknowledged JPMorgan Chase acknowledges belonging to spend more than $180,000,000 on direct federal lobbying, but shareholders have no way of finding out how Chase's shares of that $180,000,000 was spent. The big question for shareholders is how was that money spent. In addition, JPMorgan Chase belongs to trade associations that lobby against the company's policies on climate change. The company, however, does not disclose how it works with trade associations.
We urge the company to disclose the major issues in lobbying specific dollar amounts of dues, payments to trade associations that engage in lobbying and portions used for lobbying. This is a very good time for JPMC to expand disclosure and transparency in keeping with its commitment to its new business standards. Thank you.
Thank you, sister. We oppose this resolution and our reasons ownership threshold required to call such meetings. Proposal number 7 was submitted by Mr. John Chevedden. And Sister Nora, you're going to introduce this proposal as well, I understand.
Yes. Thank you, Mr. John Chevedden for a moment, even though I did not officially participate in this proposal. So on behalf of Mr. John Seveden, I move proposal number 7.
Resolved, shareholders ask our Board to take the steps necessarily to amend our bylaws and each appropriate governing document to give holders in the aggregate of 10% of our outstanding common stock the power to call a special shareholder meeting. This proposal does not impact our Board's current power to call a special meeting. Delaware law allows 10% of shareholders to call a special meeting and many companies have adopted the 10 percent threshold. However, it now requires 20% of JPMorgan Chase shareholders to call a special meeting. Special meetings allow shareholders to vote on important matters, such as electing new directors that can arise between annual meetings.
Shareholder input on the timing of shareholder meetings is especially important when events unfold quickly and issues may become moot by the next annual meeting. This proposal topic won more than 70% support at Edwards Life Science and SunEdison in 2013. Vanguard sent letters to 350 of its portfolio companies asking them to consider providing the right for shareholders to call a special meeting. Please vote to enhance shareholder value, special shareholder meetings, proposal 7. Thank you.
Thank you, sister. We oppose this resolution. Our reasons for doing so appear on Page 89 of the proxy. Proposal number 8 was submitted by Ms. Mercy Rome relating to how votes are counted and the Equality Network Foundation and we've been advised that Father Seamus will present this proposal as well.
Father?
I think if Sister Noah and I weren't here, this meeting would be moving along faster, Steve. I stand on behalf of Investor Voice of Seattle, Washington to move Proposal Number 8, which calls for simple majority voting. Currently, a number of corporations like Chase chose to use 2 different vote counting formulas when tallying votes at their annual meetings. This simple majority proposal seeks to remove abstentions from the formula and to harmonize how our company counts and reports voting results to the SEC, its stockholders and the media. Chase already uses a simple majority formula for director elections, so it should be neither cumbersome nor difficult to adopt a simple majority as uniform standard across the board.
A recent white paper studied the impact of counting abstentions. It examined voting in the S and P 500 and the Russell 3,000 over 11 years and evaluated more than 20,000 individual votes. The Wall Street Journal published an exclusive on this research and Corporate Secretary Magazine named the simple majority issue a must read for executives. One key finding among many, rather than making having a neutral effect, counting abstentions creates a 7.6 times greater negative impact on shareholder proposals than on management items. The study findings correlates to make it clear that when Chase pushes abstentions into its formula, the result is not neutral and all items are not treated equally.
Chase shareholders deserve a harmonized fair and consistent voting system, not a 2 count system that creates multiple outcomes, advantages Board elections, skews other votes and disproportionately harms shareholders. Three points in closing. 48 percent of the S and P 500 and the Russell 1,000 already use a simple majority standard, which makes this a reasonable and mainstream request. A third of companies receiving this proposal have a simple majority to enhance their governance. All these are from the S and P 500 and half are Delaware chartered like Chase.
And finally, simple math shows that counting abstention skews votes and research now provides conclusive evidence that it also inordinately harms shareholders. Shareholders deserve accurate, equitable and consistent vote counting and this moves Chase in the right direction. So we recommend a vote for proposal number 8. Thank you for listening.
Thank you, Father. We oppose this resolution and our reasons for doing that appear on Page 91 of the proxy statement. Proposal number 9 relating to vesting provisions for senior executives who resigned to go into government service was submitted by the AFL CIO Reserve Fund. We've been advised that Mr. Patrick O'Meara will present this proposal.
Is Mr. O'Meara here?
Thank you. Good morning, everyone. My name is Patrick O'Meara, and I am representing the AFL CIO Reserve Fund. On behalf of the AFL CIO Reserve Fund, I would like to introduce our shareholder proposal requesting the Board of Directors to report on the vesting of equity based awards for senior executives who leave to join government service. The shareholder report shall name all senior executives eligible to receive a government service golden parachute and disclose the estimated dollar value of such parachute.
At most companies, executives are rewarded with equity awards for tenure and performance. But JPMorgan Chase rewards senior executives with a windfall for joining government service even without meeting the eligibility requirements for the equity award. For example, Chairman and CEO, Jamie Dimon, would receive more than $54,400,000 through the Accelerated Vesting of Equity Awards if he were to join the government and be required to immediately sell securities to comply with federal ethics laws. We question how shareholders benefit from a practice of preferential treatment for some executives. JPMorgan's 2015 proxy states that it needs to offer government service Golden Parachutes because, while we do not want to lose these employees, we recognize that it is also good for our shareholders and our firm to have the best and brightest talent from the public sector pursue public service.
But the continued or accelerated vesting of equity awards for executives joining the government will, in fact, encourage top talent to leave JPMorgan. We believe shareholders would benefit greatly from knowing which executives are eligible for this benefit and how much they stand to collect in government service golden parachutes. Institutional Shareholder Services agrees with us and recommends a vote for our proposal. So why not issue the report? Thank you.
Thank you. We oppose this resolution for the reasons stated on Page 93 of the proxy. Now turn to the final proposal, proposal number 10 relating to clawback disclosure. It was submitted by the Office of the Comptroller of the City of New York and co sponsored by the UAW Retiree Medical Benefits Trust. We've been advised that Mr.
Ryan Droz will present this proposal. Is Is Mr. Droz here?
Thank you. Good morning. My name is Ryan Droz and I am here on behalf of the co lead filers UAW Retired Medical Benefits Trust and New York City Pension Funds. I hereby move proposal number 10 on clawback disclosure. Before discussing the proposal, I would like to welcome you to Detroit, Michigan, and I'd also like to recognize JPMorgan's financial commitment to revitalizing the city.
It means a lot today, and it's going to mean a lot in the future. And we definitely appreciate that being based in Detroit. I'd like to thank the Corporate Secretary, Tony Horan and Associate Corporate Secretary, Linda Scott, for their engagement on this issue. Proposal 10 asks the Board for annual disclosure as to whether pay has been clawed back from senior executives in the previous year and described the general circumstances of that recovery. We believe that disclosure would improve accountability to shareholders and enhance effectiveness of JPMorgan's existing club act policies, which are already allowing for the company to recover or reduce pay from employees who engage in misconduct.
The UAW Trust has led coalitions in the pharmaceutical sector and the banking sector, along with New York City Pension Fund since 2012. Most recently, one of your peers, Bank of America, adopted a policy, the policy that we are proposing today. It is our hope that the Board will consider this and follow suit. Our fundamental position is that the recovery of corporate assets related to misconduct are material to investors even if they do not trigger a financial restatement. They can cause significant financial and reputational harm.
We're not looking to assert the role of the compensation committee by telling the company when to claw back pay and from whom. We believe this is the role of the compensation committee alone. We are asking for increased Board accountability and transparency and alignment of the interest between shareholders and decision makers in the company. In our view, broader disclosure would encourage compliance and ethical misconduct by educating senior employees about behavior expectations, while discouraging future compliance violations by communicating concrete consequences for this misconduct. Simply put, even the best conduct related policies are rendered less effective if no one knows whether they're enforced.
We therefore urge JPMorgan to join Bank of America, PNC Bank and other financial institutions that have already implemented these disclosure policies. We urge you to book this proposal. Thank you.
That proposal is set forth on Page 96 of the proxy. That completes the introduction of the shareholder proposals. So we'll now turn to agenda item number 3, the general discussion item, after which we'll close the polls and present the preliminary voting results. There are 2 standing microphones. If you wish to address the meeting, please proceed to the microphone nearest you and take your place in line.
When addressing the meeting, please state your name and whether or not you are a shareholder. As a reminder, we ask that you limit your time to 3 minutes for each turn at the microphone to allow everyone an opportunity to speak, and there will be a total time limit of 10 minutes on any topic. Please direct your questions to our Chairman, Mr. Diamond. I'm going to recognize first Reverend Jackson.
Thank you very much. Good morning, shareholders present today and Board and Mr. Diamond. Let me first congratulate you on assuming the responsibility to invest $100,000,000 stimulus into Detroit as opposed to another Baltimore. We know what creates them, guns and drugs and jobs out and lack of investment.
We must finalize the current report, which gives us what the options are in great detail. Poverty is a weapon of mass destruction and destroys and wastes so much talent and neglect of the poor is the fuel of explosions. We have an interest in your diversity program, vertically and horizontally in the workforce and in the C suites and supply diversity. Strikes me as significant about Detroit and Baltimore is the need for a comprehensive urban reconstruction plan. While your $100,000,000 loss is in down payment, rule of HUD is significant.
It is their mission, housing and urban development in Detroit. Maybe 80,000 vacant homes and abandoned lots. If one took one half of those that are repairable and removed lead paint and began to remove boards and put in one of those good people back to work more people than they are more jobs than there are people in the city. The rule for Department of Transportation, many Detroiters cannot get to where the jobs are. The rule of Department of Labor in terms of skilled trade training and access to development are to forgive those in the prisons who are in fact on nonviolent drug charges but jails become a homeless shelter and a mental institution.
Those in the prisons who are there on non violent drug charge should be out getting well and working and regaining their sense of their real sense of self. I would urge you, Mr. Diamond, to take a hard look at our committee formed here last year by the Mayor and distinguished Mr. Kevin Orr that involved the government and private sector for a plan for urban reconstruction. No one has the credibility and the moral authority that JPMorgan Chase has to reconvene that commission and set a plan and a prototype for reconstruction of urban America.
There is no present plan for urban American revitalization, which we've done as a stimulus, but we need a comprehensive plan. I'm going to express my thanks to you again for making that assessment. I hope you will assume that responsibility. Thank you.
Thank you, Reverend. And we will talk to the Mayor and see if we can help there too. Thank you. Thank you, sir.
Good morning. My name is Ken Stevens and I have a proxy from the Jesuits of Northeast in the amount of 8,000 200 shares. I am a foreclosure resistor and I traveled from Brooklyn, New York to come to this meeting. I was employed by Chase for 15 years and lost my job because Chase downsized. In 2008, I fell behind in my mortgage payments and Chase foreclosed on my home.
I appeared in court 21 times and I submitted over a dozen loan modification applications to no avail. In 2009, I finally entered into an agreement with Chase. I made 14 payments equaling over $10,000 but Chase refused to give me a personal permanent modification. In 2013, the court dismissed the case because Chase took too long to come up with a resolution or move my case forward. Chase settled with the people of New York and our Attorney General for $13,000,000,000 2013.
When will Chase settle my case? But I am here representing all New Yorkers and we want to know how much money you are spending on public lobbying, which keeps us lingering in foreclosure and prevents much needed regulations of the mortgage industry.
Thank you. Thank you.
Microphone number 2.
Yes. My name is Richard Davitt, shareholder and stakeholder. Upon receipt of the annual 2014 annual report. I reviewed it and I was struck by the inconsistencies and inaccuracies and downright distortion contained within that report. Specifically, I asked for a meeting with the Audit Committee and the Corporate Governance Committee in advance of this meeting, which was yesterday afternoon.
I met with Lave Jackson and who had an attorney that represented management there, but nowhere to be found were the corporate governance issues. And my issue went to the fact that there was a fraud perpetrated upon Ohio courts and how that affects and permeates every practically every category in your annual report as it relates to what I'll refer to as the mortgage stuff. And I'd like to hear from Mr. Weldon as to why he chose not to be in attendance at that meeting.
I think you got a meeting with the Chairman of the Audit Committee and that's all we can do at this time. I'm going to recognize the next question. That's not
my question. My question is to Mr. Weldon. This is a grave matter of oversight that he is the kingpin in that the head of the Corporate Governance Committee mandated by several of the settlements entered into? And where is he when somebody is making allegations of fraud?
I think we've responded to those allegations time and time again. So I'm going to recognize the next speaker.
Hello. My name is Wanda Rivera. I'm also from foreclosure resistors. I live in the Bronx. I am here to support Resolution 6 for disclosure of Chase's payments and policies regarding direct and indirect lobbying efforts.
Chase has been a predator. It has given out predatory loans, refused loan modifications and has been sued for preying upon selected group of people. And now Chase is acquiring Ocwen Loan Servicing, one of the worst loan servicers in America. I can attest to that personally because my loan is serviced by Aqua. So I'm asking you Jamie Dimon to disclose if you are using your power and money to lobby against people of color?
And what is Chase going to do to make sure that the problems with Ocwen servicing will be addressed and that homeowners receive affordable loan modifications? How many dollars are being spent lobbying to prevent me and so many others from having the American dream? Thank you.
So we are not buying Ocwen Loan Servicing the company. We're buying a small portfolio from them of prime mortgage servicing. So it's a small piece. And we do disclose how much we do lobbying. I think it's $13,000,000 Steve can correct that number if it's right.
I just want to point out to the audience that there are 1,000, I think 7000 to 10000 lobbying organizations that are used by everybody and that 13,000,000 is no different than lots of other people.
All right. Thank you. But
just my concern And also we probably as uniquely as a bank have gone out of our way to close down any payday lenders who try to do business through JPMorgan at all.
All right. Thank you.
Yes, sir.
Thank you. I'm Bruce Marks. I'm the CEO of NACA. Good to see you. So one, I want to start on saying, I think it's great that you're investing $100,000,000 in the city of Detroit.
So I think that's very, very positive. What we'd like to see and we have some of the residents from the city here is that more of that money gets spent in the actual community. And there's a model that that is getting done. So what we're doing through NACA and Bank of America is we're doing mortgages to working people that require no down payment, no closing costs, no fees, always at a fixed rate below market. And you can do a rehab with that up to 150% loan to value.
So the numbers work like this, if I can spend that. If you can get a house for $5,000 through the land bank, do $55,000 to renovate the property, you have a mortgage for $60,000 your principal interest tax and insurance is $3.97 a month less than paying rent. But that property probably doesn't appraise for more than $40,000 So with 150 percent loan to value, it works. And we know it's working because we've done these workshops. We started the first step in the process.
We have over 7,000 people who've already come to the workshops. We have a total of 20,000 people involved has opened up the floodgates. And one of the things that you just said Jamie, which is very important is that payday lenders out there are preying on the city residents of Detroit. And that people do not have bank accounts out there and they're really being preyed upon. So what we ask is that one, that you take some of that money, you sit down with us and work with us and Bank of America to expand that program, which is having a dramatic impact in the communities in this city.
And as the major newspaper here said is that this program is crucial for the success of the city of Detroit in the neighborhoods, not just in downtown. So we'd like you to sit down with us, with you personally, hear about the program and then support the program, which is making a huge difference in this city, because the residents who long term residents here are not getting the benefit of what's going on. So on one hand, we want to say absolutely keep the commitment here and that's a positive thing and we applaud you for doing that. But we want to make sure that that money is going to the neighborhoods that really are in desperate need and to the residents who've really gone through the tough times and need to benefit for the times that are getting better in this city. We're working with the mayor, with the land bank.
We think that you should partner up with us. And with Bank of America who's doing it not just on 150% no down payment LTV loan, but on a 15 year mortgage that regenerates equity in
Mayor Duggan about whether he's supportive of it. We are already working at Liberty Bank on doing precisely the kind of loans you're talking about. So it may be a little duplicative for us, but I will do those two things.
Yes, but even with that program, it requires a down payment. So on that and it doesn't provide the kind of rehab money. And it's a very small program out there. You need to make a much bigger commitment than just that. It's got to be more than just good press and good media.
It's got to be the substance of that. We're working on that,
yes. Thank you. Number 1.
Good morning. My name is Alexis Evenischu. I'm Deputy Director at New Economy Project, an Economic Justice Organization in New York City. Were a co filer of the lobbying resolution that Doctor. Nora Nash presented today.
I'd like to follow-up on that. So Chase's recent lobbying against financial reform and the resulting media backlash in December January really clearly illustrates why the company needs to improve its lobbying policies and disclosures to protect shareholder interest. For example, in December, Mr. Dimon, you were lobbying Congress around the swaps push out, trying to repeal a that would move risky swaps trades out of the taxpayer backed areas of the bank. And this lobbying generated just an enormous wave of negative publicity with coverage in a lot of newspapers and former FDIC Chairman Sheila Baird speaking out about it and decrying the bank's lobbying about using the federal budget as leverage around that lobbying as a major blow to the bank's reputation.
And in addition, while out in public doing this lobbying, the bank has also been, as you mentioned, under investigation for a number of issues, including the exchange rate manipulation and LIBOR problems. And this lobbying, while under investigation for these issues, really further harms the company's reputation and makes clear the need for the company to be fully transparent with shareholders about that. And as Sister Nora explained, Chase also needs to approve its disclosure about lobbying through trade associations. That's very murky right now. Shareholders need to know what steps the company is taking to make sure that the trade associations aren't lobbying contrary to company policy, for example, around climate change in the U.
S. Chamber of Commerce's actions there. And they need to know how much the company is spending, both through that indirect lobbying and also on the new JP Morgan Chase Institute. For example, Chase, as you disclosed, is a member of the U. S.
Chamber of Commerce, which spends $124,000,000 last year on lobbying. How much of that did Chase contribute? And are you willing to disclose names of all the trade associations that Chase participates in? How much you spend on that indirect lobbying and also what the topics you're lobbying on.
Thank you.
Next speaker at microphone number 1.
Yes. Richard Davitt, shareholder and stakeholder. As you know, on the corporate scheme, the Board of Directors are the stopgap folks involved with protecting shareholder interest. And I'm here and met yesterday with some of them regarding the mischief of management. And it just strikes me as a little odd that here in trying to get responses that when I'm reporting the mischief of management, the attorney for management is the one that's responding to me.
Do you think that's appropriate in good corporate governance practice? My question is to Mr. Dimon.
You met with the Chairman of our Audit Committee and he bought a lawyer. He has all the authority in the world to act as he sees fit for the Board. And yes, we do think it's appropriate.
That's Mr. Cutler is responding. I want I'm here to get answers, the feet of the Board. How do we know as shareholders that the Board is not being derelict in their duty in discharging their fiduciary responsibility to shareholders and stakeholders.
You met the Chairman of the Audit Committee.
Well, he doesn't represent
the whole Board, does he? He talked to the whole Board and the whole Board knows that he spoke with you.
He talked to the Governance Committee as well?
He speaks to the Board knows about the conversation and they always do the right thing.
They always do the right thing. That includes fraud upon Ohio courts?
We don't
agree. Are you explicit in that?
We've never agreed with you on that.
You can consult with any 1st year law student on the subject.
Our next speaker at microphone number 1.
Yes. Good morning again. I'm Sister Nora Nash. And I really want to take this opportunity to thank Mr. Jamie Dimon and JPMorgan Chase for investing that $100,000,000 in Detroit.
We have seen the blight. Many of the members of the Interfaith Center on Corporate Responsibility took the opportunity 4 years ago to spend a week here in Detroit and look at the poverty and the blight. And your program booklet from last night is a gives us a real sense of hope for this city as many of the cities in this country are in such great need. And we do appreciate and we hope that you continue to keep us appraised of the progress and allow us to know what JPMorgan Chase will continue to do in Detroit. Then as a member of the Interfaith Center on Corporate Responsibility, I was given another very important question by ICCR to ask at this meeting and it is in reference to the people of Detroit who lost their access to water and that whole issue of water shutoffs.
And the question is, was JPMorgan Chase Bank $1,000,000 from the Water Department and $1,100,000,000 bonds, which were supposed to be for infrastructure repair?
I don't know the answer to that question. But I will try to give you the answer at other time. I appreciate your comments in Detroit, and we will be following up on that report periodically.
Good. Thank you, Jamie. You're very welcome.
Microphone number 2. Very good. I switched microphones for a better view of the rest of the shareholders. But I just wanted to make three quick points. Last year, if you recall at the AGM, we had a number of colleagues from Virginia from Prince William County who came in reference to the foreclosure challenges that they faced.
And I think we simply wanted to say thank you to the company for meeting with them and for engaging with them and for your contribution to their restoration fund. I think also to encourage the company and management to continue to pursue restoration in as many ways as possible and modifications where feasible on those houses that are still underwater and those homeowners who are still in those homes. That continues to be a great challenge across the country, not only in Prince William County in Virginia, but in many other places as well. My second point is, I think, to encourage the company that to continue on the path of engagement with shareholders. I know that we Mr.
Raymond and Mr. Weldon and some other members of the Board, they've been doing quite a bit of outreach in terms of engagement. I think that's really positive and I think it shows in terms of the amount of transparency that the public and shareholders and stakeholders can see. I appreciate Mr. Raymond's comments this morning about recognizing the outstanding issues that are still out there and the Board's attentiveness to that.
And finally, I simply brought along a copy of the How We Do Business report that JPMorgan Chase published last December. For those of you who haven't seen it, it's available online. And a special shout out and thank you to the many folks who were part of that. I know Tony Horan and Rob Scott and I mean Rob Vincent and Linda and Steve and many others were a part of that. From our point of view at the Interfaith Center and as shareholders, it was really important to spend some time thinking about the culture of JPMorgan Chase and how that culture is transmitted and handed on particularly to new employees and to a workforce that's over, as you said yourself, 250,000.
That remains also true, I think, about the financial system. As we continue to wrestle with the implications of Dodd Frank and the Voca Rule, in hopefully the outcome from that is a better financial system that serves everybody Detroit and all others across the world who are looking for access to capital. So I think we also want to commend you for this piece of work, but also encourage the company to stay the course on whatever improvements we need to put in place in terms of the financial system, so that it is a system that JPMorgan Chase can rely on, but millions and millions of people across the world can also rely on. Thank you.
Thank you for those words. And of course, we always continue to try to improve as a company. Thank you.
Microphone number 1.
Thank you. Good morning again. I have a follow-up question about mortgage servicing and the Ocwen acquisition. So as of course everyone here knows, Chase is the 2nd largest mortgage servicer in the country and will become even larger once you finalize the acquisition of the Ocwen loans. And over the past few years, the company has entered into a number of multibillion dollar settlements around mortgage and foreclosure issues that have come with requirements that the bank provide relief to people who've been harmed by predatory mortgage servicing and foreclosure practices.
According to the last Monitor report on Chase's performance under the settlement, Chase has provided only about 2,400 homeowners with principal forgiveness loan modifications, which research has shown are the most effective form of loan modification. And that includes both 1st and second mortgages, the whole universe. As disclosed, that's a really tiny number.
Steve, I have the number.
Sorry? I know the number. You know the number?
It's 600,000 mortgages we modified and $1,200,000 that we've helped avoid foreclosure on.
Right. But I'm talking about the principal reduction modifications particular, which in the report are listed as $1,373,000 That's a question for Joseph Smith that I gave.
I won't give you specific detail, but it's far more than that. And in total, you're talking about $20,000,000,000 to $30,000,000,000 of aid for to keep try to keep people in their homes.
That's great. So my follow-up question around it is about where is that relief coming? And could Chase make public information about where do those homeowners live? Are you reaching people who are in communities of color who are targeted for predatory loans? Are you reaching the people who most need that assistance?
And could you make more information about the neighborhoods and the characteristics of the people that you're helping public?
You can we make a huge amount of disclosures. But if you want, you can send us a bunch of questions, we would be happy to try to answer them for you.
That would be fantastic. Who do you guys talk to? Yes.
You can e mail my office and then I'll get it to the right person.
Great. Thank you.
Microphone number 2.
Thank you, Chairman Diamond. I'm Mike Telford from New York Des Moines, Iowa, and I'm here on behalf of the nation's pig farmers in the National Pork Producers Council, which is a stockholder. We want to thank the staff, management and the Board of Directors for JPMorgan for your continued efforts in supporting our family pork producers through your strong banking and financing efforts, which you do so very well. I want all the shareholders as well as the staff, management and Board to know that the nation's family pig farmers have made many improvements in animal care and production practices, and like JPMorgan, they are committed to continuous improvement. We hope JPMorgan will always remain diligent in consideration of requirements on production practices and their impact on the supply chain and our family farmers.
We certainly want to work with you and appreciate your efforts, and there is much information about our industry at portcares.org. JPMorgan and our family producers are clearly committed to building stronger communities and improving our local, state and national economy. And I do hope that everyone will join me in thanking the company, the staff, management and the Board for your continued banking and financing efforts and achievements, and you really do deserve a round of applause. Thank you very much. Appreciate that.
One more question. Richard Davitt again. Regarding that $45,000,000,000 acquisition of the Ocwen portfolio, Every major scholar that's out there has called the GSE Business Model, a government sponsored enterprise, fatally flawed and practically brought the world's financial system to its knees. Yet you go out a few years later after a few fines and invest $45,000,000,000 of shareholder equity on this business model. Can you tell me where the logic is?
So this is servicing mortgages, which is sending out monthly bills and collecting them. And it's $45,000,000,000 of mortgage value. The purchase price would be closer to 1% of that. It was prime performing mortgages only and we did it so we have an improved portfolio in total, so we can reduce our cost and do a better job for consumers.
If this is a fatally flawed, what don't you understand about fatal?
The mortgage market is 10 $1,000,000,000,000 and American consumers rely on it and we do a lot of American consumers in mortgages and mortgage servicing. There is work that needs to be done to get the mortgage business working properly. That's really the government's job. We are happy to be involved and help them. That's really going to be their job.
And there are a lot of parties involved in that.
Why not invest your own money? You don't need the government, do you?
We need the government. Why? Because they control that business.
Isn't it because upon default, the tax payers tapped on the shoulder?
That's not the way it turned out.
That is the way it turned out. It turned out exactly that way. The taxpayers were tapped upon implosion, but yet you continue to work a fatally flawed business model. Makes no sense.
And proxies. Hold up your ballot and someone will come by to collect it. I declare the polls closed at 11:0:9. That concludes the formal portion of our meeting. And we'll turn to agenda item number 5, to report on the results of voting.
So I'll 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 Securities and Exchange Commission 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 the votes cast for and against. No director received less than 95% of the votes cast. I'll now read the percentage for each director based on votes for and against: Linda Baumann, 99.3 percent Crandall Bowles, 99.2 percent James Crown, 98.3 percent Timothy Flynn, 99.5 percent Michael Neal, 99.5 percent William Wheldon, 96% James Bell, 99.1 percent Steven Burke, 96% James Diamond, 95.7 percent Laban Jackson, 98.3 percent and Lee Raymond, 95.6 percent.
With respect to the other proposals today, the results I read will be the percentage voted for each proposal based on shares marked for, against or abstain. The vote for the approval of the advisory resolution to approve executive compensation was 61.4 percent 4. The vote for ratification of our independent registered public accounting firm was 98.5 percent 4%. The vote for the approval of the amendment to the long term incentive plan was 93.2 percent 4%. The vote for the approval of the independent Board Chairman was 35.9 percent for the vote for the proposal regarding lobbying was 6.1 percent for The vote for the proposal regarding special share owner meetings was 34.9% for.
The vote for the proposal regarding how votes are counted was 7.4% 4. The vote for the proposal regarding accelerated vesting provisions for government service was 25.4 percent 4%, and the vote for the proposal regarding clawback disclosure was 40 3.8 percent for. We greatly appreciate the views of all of our shareholders. And now I'll turn it over to Jamie to close the meeting.
Our Board takes all your feedback very seriously and we'll continue to incorporate your input into how we govern the company as we continue to build hopefully one of the best companies both in financial services and in corporate governance.
Jamie, if there's nothing else, we can now adjourn the meeting and that's your job.
This concludes the business before the meeting. Do I hear a motion for adjournment? All in favor? Thank you. The meeting is adjourned.
Thank you.