JPMorgan Chase is granting Jamie Dimon a “special award” of 1.5m share options that it said reflected the board’s desire for one of the longest-serving chief executives on Wall Street to stay at the bank for a “significant number of years”.
The board is awarding Dimon the options in the form of “stock appreciation rights” that he can exercise at Tuesday’s average price of $148.73, which will allow him to make a profit if the bank’s stock rises above that level in the coming years.
JPMorgan’s internal model forecasts that the options would yield a profit to 65-year-old Dimon of about $49m after a 10-year vesting schedule, according to people familiar with the matter.
The options would become exercisable from July 2026 and Dimon would need to hold any shares until July 2031. JPMorgan said that the shares would only vest as long as Dimon continues to lead the bank, although it said there were “certain limited exceptions” to this rule.
It also said the award included provisions that would allow the bank to claw back shares in the future.
“In making the special award, the board considered the importance of Mr Dimon’s continuing, long-term stewardship of the firm, leadership continuity, and management succession planning amidst a highly competitive landscape for executive leadership talent,” JPMorgan said in a regulatory filing.
The Financial Times reported in May that JPMorgan executives had been told the board wanted its long-serving chief executive to stay for another five to seven years.
That would extend the reign of Dimon, a cancer survivor who underwent emergency heart surgery last year, into a third decade.
Dimon, who has been JPMorgan chief executive since 2005, has received special awards from the bank in the past but this is the first one that is explicitly tied to his remaining at the lender.
The options are not part of Dimon’s regular annual compensation, which for 2020 totalled $31.5m. Forbes estimates Dimon’s net worth at $1.8bn.
The award comes two months after JPMorgan promoted two potential chief executive successors, Marianne Lake, 51, and Jennifer Piepszak, 51, to run the bank’s sprawling consumer business, renewing speculation about when Dimon will eventually step down.