JP MORGAN CHASE & CO. | Revisit DEI Goals in Executive Pay Incentives at JP MORGAN CHASE & CO.

Status
Omitted
AGM date
Resolution details
Company ticker
JPM
Resolution ask
Adopt or amend a policy
ESG theme
  • Social
ESG sub-theme
  • Diversity, equity & inclusion (DEI)
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Financials
Company HQ country
United States
Resolved clause
Shareholders request the Board of Director’s Compensation & Management Development Committee to revisit its incentive guidelines for executive pay, to identify and consider eliminating discriminatory DEI goals from compensation inducements.
Whereas clause
Since the June 2023 U.S. Supreme Court decision in Students for Fair Admissions v. Harvard College, 1 hundreds of higher education institutions have shuttered their diversity, equity and inclusion (DEI) programs and positions.2 Consequently, “there has been a sharp uptick in litigation challenging corporate DEI programs and initiatives, alleging that they require unlawful employment and contracting decisions to be made on the basis of race, in violation of Title VII of the Civil Rights Act of 1964…”3 Corporate compliance lawyers now advise clients that “DEI initiatives and programs that are not open to all applicants or those that apply an explicit race- or gender-based focus will likely face continued and heightened scrutiny.” Also: “We also expect to see ongoing scrutiny of perceived hiring quotas and set asides, particularly those that may appear to be incentivized by bonuses for management or company leadership.”4 Further, “companies, and their management teams and boards, should be prepared for increased employment-related litigation including litigation that seeks to hold executive officers and directors personally liable for purported breaches of their fiduciary duties in connection with the corporation’s DEI policies.”5 Many corporations dramatically reduced or eliminated their DEI programs,6 and companies face retribution for their discrimination. For example, Starbucks was the subject of a $28.3 million judgment after a former worker claimed she was fired for being white.7
Supporting statement
The DEI webpage for JPMorgan Chase & Co. (“Company”) advertises special programs for black, Hispanic, LGBTQ, and other “diverse” groups. The site also advertises the Company’s hiring statistics, including that “49% of global new hires are women” and “58% of U.S. new hires are racially or ethnically diverse.8 Further, JPMorgan has set a “racial equity commitment” which includes explicit hiring targets, also known as quotas.9 Chairman and CEO Jamie Dimon maintains that he is a “full-throated, red-blooded, patriotic, unwoke, capitalist CEO,”10 but the Company’s rhetoric and actions say otherwise. Pay for executive officers is 50-percent determined by the Compensation & Management Development Committee based on a mix of qualitative metrics, which include the Company’s 2025 Racial Equity Commitment. These discriminatory quotas leave JPMorgan ripe for regulatory, reputational and litigation risk. Its attempt to cram DEI’s non-GAAP nature into the proxy statement’s compensation discussion demands either a legally dubious quota regime, or it fails SEC compliance.12 The Council of Institutional Investors’ general counsel stated that research shows “companies are engaging in an opportunistic use of non-GAAP earnings to justify higher executive pay.” FTI Consulting advises there is a “heightened focus” on “litigation risk,” which “has transitioned from being merely an operational concern to becoming a strategic priority for the highest levels of corporate governance.

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.