The board of directors grants Dimon the options in the form of “stock appreciation rights” which he can exercise at an average price of $ 148.73 on Tuesday, which will allow him to make a profit if the shares of the bank will exceed this level in the years to come.
JPMorgan’s internal model predicts that the options would earn Dimon, 65, a profit of around $ 49 million after a 10-year vesting schedule, according to people familiar with the matter.
The options would become exercisable from July 2026 and Dimon is expected to hold shares until July 2031. JPMorgan said the shares would only vest as long as Dimon continued to run the bank, although he said there was had “certain limited exceptions” to this. to reign.
He said the award included provisions that would allow the bank to recover shares in the future.
“In awarding the special award, the board of directors recognized the importance of Mr. Dimon’s continued and long-term management of the business, leadership continuity and succession planning for the company. leadership in a highly competitive landscape for leadership talent, ”JPMorgan said in a regulatory filing.
The Financial Times reported in May that executives at JPMorgan had been told the board wanted the chief executive to stay for another five to seven years.
This would extend the reign of Dimon, a cancer survivor who underwent emergency heart surgery last year, to a third decade.
Dimon, who has been the managing director of JPMorgan since 2005, has received special awards from the bank in the past, but this was the first time explicitly linked to his retention with the lender.
The options are not part of Dimon’s regular annual compensation, which for 2020 was $ 31.5 million. Forbes estimates Dimon’s net worth at $ 1.8 billion.
The award came two months after JPMorgan promoted two potential successors to chief executive, Marianne Lake, 51, and Jennifer Piepszak, 51, to lead the bank’s sprawling consumer business, renewing speculation about the moment when Dimon will eventually resign.