Friday, JPMorgan Chase & Co (JPM), said its chief executive officer and co-chairman James Dimon has been awarded an all-stock bonus in the form of restricted stock and options of approximately $17 million for 2009.
JPMorgan that reported a $11.7 billion in profit in 2009 awarded Dimon 195,704 shares set to expire on January 13, 2013, while the 563,562 stock appreciation rights or options will expire on January 20, 2020 with an exercise price of $43.20, according to an SEC filing. Dimon's has a base salary of $1 million and will not take a cash bonus for the year.
According to the Wall Street Journal, Dimon earned about $28 million in 2008, but was not awarded any cash or equity bonus last year. The average executive compensation at J.P. Morgan has shown a 41% decline from 2007.
Bankers' executive compensation has been a focus issue and a much discussed one during the financial crisis, as the U.S. government had spent billions in taxpayer funds to bailout the banking system.
JPMorgan was also a beneficiary of the U.S. government's Troubled Asset Relief Program set up to prevent the collapse of the financial system. The bank received $25 billion under the program and has since returned the money to the Treasury.
Reports indicate the 195,704 shares awarded to Dimon with a value of about $8 million at market close on Wednesday and options, with a total value of about $17 million, according to a commonly used valuation method.
While Dimon receives 100% of his incentive compensation in equity, other top executives at the bank will receive about 75% of their bonuses in equity. JP Morgan revealed a slew of equity bonus numbers for its top executives, but cash bonuses will be disclosed later in proxy filings or not at all.
Dimon received about $19.7 million in compensation in 2008, including his $1 million salary and stock and options that had been awarded in previous years, but he did not receive new stock and option awards that year.
In the most recent fourth quarter, JPMorgan Chase reported a four-fold rise in profit, reflecting strong results from its Investment Bank and Asset Management businesses.
The bank's net income for the fourth quarter was $3.28 billion or $0.74 per share, compared to $702 million or $0.06 per share a year ago. JPMorgan's quarterly net revenues were $23.16 billion, up 34% from $17.23 billion in the prior-year quarter. On a managed basis, total net revenues rose 32% to $25.24 billion from $19.11 billion in the previous year.
The company's shares closed at $38.35 on Thursday and at $40.29 on Wednesday, when the stock and options were granted.
Reports said Dimon also acquired about $10 million in JPMorgan stock separately through exercising expiring options.
Dimon's package, as well as his decision to forgo a cash bonus for the second year running is likely to set the trend for other Wall Street banks such as Goldman Sachs, which has not yet released details of its executives' pay for 2009.
JPMorgan company also plans to hold "say on pay" vote at 2010 shareholder meeting, reports the Wall Street Journal.
JPM is currently trading at $37.42, down $0.93 or 2.43%, on a volume of 38.45 million shares on the New York Stock Exchange.
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