May 13, 2020
J.P. Morgan Tightens Comp-Related Voting Policies
– Lynn Jokela
Changes to investor proxy voting policies and guidelines are common and recent changes to J.P. Morgan’s voting policies caught my eye as some changes relate to executive compensation. This Georgeson blog provides a summary of the comp-related changes:
– Say-on-Pay: Under its current policy, JPM withholds votes from compensation committee members for failing to respond adequately to a say-on-pay proposal that received less than 60% shareholder support at the previous year’s shareholder meeting. JPM now also considers withholding votes from select members of the compensation committee in cases of pay-for-performance misalignment or where performance metrics and targets, used to determine executive payouts, are not aligned with long-term shareholder value.
– Clawback Proposals: JPM changed its position from case-by-case evaluation to generally support shareholder proposals seeking to recoup unearned incentive bonuses or other incentive payments made to senior executives where fraud, misconduct or negligence significantly contributed to financial restatements. In its updated policy, JPM also added that it will support shareholder proposals seeking to recoup incentive payments where misconduct or poor performance by an individual prior to the payments contributed in whole or in part to the issuance of such payments.