PRE 14A 1 jpmc2018preliminaryproxy.htm PRE 14A Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.      )
Filed by the Registrant x                            Filed by a Party other than the Registrant o
Check the appropriate box:
 
   
x
Preliminary Proxy Statement
o
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o

 
Definitive Proxy Statement
o
Definitive Additional Materials
o
Soliciting Material Pursuant to §240.14a-12
 
JPMorgan Chase & Co.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
 
     
x
No fee required.
o
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
(1)
Title of each class of securities to which the transaction applies:
 
(2)
Aggregate number of securities to which the transaction applies:
 
(3)
Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
(4)
Proposed maximum aggregate value of the transaction:
 
(5)
Total fee paid:
o
Fee paid previously with preliminary materials.
o

 
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
(1)
Amount Previously Paid:
 
(2)
Form, Schedule or Registration Statement No.:
 
(3)
Filing Party:
 
(4)
Date Filed:

 


 

 

 
jpmcproxy2018coverv5.jpg

 


 

 

 

 

 


 

 

 

 

 
 

 
JPMorgan Chase & Co.
270 Park Avenue
New York, New York 10017-2070

 
April 4, 2018
Dear fellow shareholders:
We are pleased to invite you to attend the annual meeting of shareholders to be held on May 15, 2018 at 10:00 a.m., local time, at the JPMorgan Chase Dallas Corporate Center in Plano, Texas. This forum provides shareholders with the opportunity to discuss topics of importance to the Firm’s business and affairs, to consider matters described in the proxy statement, and to receive an update on the Firm’s activities and performance.
We hope that you will attend the meeting in person. We encourage you to designate the persons named as proxies on the proxy card to vote your shares even if you are planning to come. This will ensure that your common stock is represented at the meeting.
This proxy statement explains more about the matters to be voted on at the annual meeting and about proxy voting. Please read it carefully. We look forward to your participation.
Sincerely,

 

 
James Dimon
Chairman and Chief Executive Officer

 

 

 

 
a2016logo2014jpmcblacka02.jpg

 
 

 


 

 

 


 

 
A LETTER FROM JAMIE DIMON, OUR CHAIRMAN, AND
LEE R. RAYMOND, OUR LEAD INDEPENDENT DIRECTOR
 
         
 
 
 
 
April 4, 2018
Dear fellow shareholders:

 
 
 
 
2017 was another strong year for the Firm, on many measures, as we achieved healthy growth across all of our major businesses — adding clients and customers and delivering record earnings per share. Most importantly, the Firm maintained its fortress balance sheet, discipline and client focus, and we continued to build value for our shareholders.
Your Board continues to focus on issues that are important to us and to our shareholders and, because this has been an especially notable year, we would like to highlight a few for you.
To begin, having a first-rate management team in place is one of the highest priorities of the Board. To see that we continue to do so, management succession planning is a key focus of your Board. The independent directors know the Firm’s senior leaders well, through unfettered access and significant interaction and believe that, under all timing scenarios, the Firm has in place several highly capable successors to Jamie and other members of the Operating Committee who are well prepared to meet future challenges. We recently announced that Jamie will continue in his current role for approximately five more years, and that Daniel Pinto, the CEO of our Corporate & Investment Bank, and Gordon Smith, the CEO of Consumer & Community Banking, have been appointed Co-Presidents and Co-Chief Operating Officers. In their new roles, Daniel and Gordon will work with Jamie to help drive critical Firm-wide opportunities. These changes are consistent with the Board’s commitment to succession planning.
The Board has also spent significant time on the Firm’s strategy. The Board reviews and approves the Firm’s Strategic Plan, which defines our strategic priorities and contains management’s annual and multi-year plans to deliver on them. The Firm’s priorities reflect our belief that our business model enhances long-term shareholder value and focus on addressing challenges,
 
such as accelerating the pace with which we deliver innovation and change. To that end, we have placed a priority on investing in innovation and new technology initiatives that allow us to deliver products and services that are more valuable to our customers.
The Firm’s future success rests on our ability to continue to satisfy the needs of our customers and promote opportunity in our communities, enabling more people to share in the rewards of a growing economy. Earlier this year, we were pleased to announce a $20 billion, five-year comprehensive investment to help our employees, and support job growth and the broader economy. This investment included increasing wages for 22,000 of our employees, expanding our branch network into new U.S. markets, increasing our community-based philanthropic investments to $1.75 billion over five years, increasing small business lending by $4 billion, and accelerating affordable housing lending. The investment is intended to drive inclusive economic growth and help create opportunity for more Americans, and was made possible by the Firm’s strong and sustained business performance, recent changes to the U.S. corporate tax system, and a more constructive regulatory and business environment.
We also remain committed to an effective and efficient risk and control environment. While the Firm has strong controls, we are always striving for continuous improvement. Throughout the past year, the Board has spent significant time on overseeing management’s efforts to continue to strengthen our infrastructure and enhance our controls while improving the client and customer experience. Cyber defense and improving our resiliency against cybersecurity threats remains a key focus at all levels of management within the Firm, and of your Board.

 


 
As part of risk management, we also take seriously our responsibility to set the “tone at the top.” The commitment to a strong and healthy culture at JPMorgan Chase remains steadfast. The Board provides direct oversight of the Firm’s Culture and Conduct Program. This year there was continued emphasis on our Business Principles and cultivating a strong, cohesive culture across all levels of the Firm. 
The Board is also very mindful of its own succession planning. We are focused on ensuring that we have the right mix of skills and experiences to align with our business strategy. We conduct an annual board evaluation process and an ongoing review of the Board’s composition and potential candidates. Maintaining an appropriate balance of experience and fresh perspective is also a key focus.
We would like to take this opportunity to thank our friend and colleague, Crandall Bowles, who will be retiring from our Board immediately prior to our Annual Meeting. We have benefited greatly from Crandall’s insights on international business, audit, and risk matters. Her service on the Audit Committee and as Chair of the Public Responsibility Committee has made us a better Board and a better Firm. We will miss her valuable perspective and commitment.
 
We are pleased to welcome the newest member of our Board, Mellody Hobson, President of Ariel Investments, LLC, whose election in March 2018 reflects the Board’s commitment to seeking out and including top talent with fresh perspectives. Mellody brings to the Board a remarkable combination of skills, experience, and personal qualities that will serve our shareholders, the Firm, and the Board well.
We look forward to continuing to deliver value to our customers, shareholders, and communities. On behalf of all our colleagues on the Board, we are grateful for your support of our Board and the Firm.
 
         
James Dimon
Chairman and Chief Executive Officer
 
Lee R. Raymond
Lead Independent Director
 
 
 

 

 

 


 

 
Notice of 2018 Annual Meeting of Shareholders and Proxy Statement
 
         
DATE
 
Tuesday, May 15, 2018
 
TIME
 
10:00 a.m. Central Time
 
PLACE
 
JPMorgan Chase Dallas Corporate Center
8181 Communications Parkway
Plano, Texas 75024
RECORD DATE
 
March 16, 2018
 
 
 
 
MATTERS TO BE
 
n
Election of directors
VOTED ON
 
n
Ratification of special meeting provisions in the JPMorgan Chase By-Laws
 
 
n
Advisory resolution to approve executive compensation
 
 
n
Approval of Amended and Restated Long-Term Incentive Plan
 
 
n
Ratification of PricewaterhouseCoopers LLP as our independent registered public
 
 
 
accounting firm for 2018
 
 
n
Shareholder proposals, if they are properly introduced at the meeting
 
 
n
Any other matters that may properly be brought before the meeting
 
 
 
 
 
 
By order of the Board of Directors
 
 
 
 
 
 
 
Molly Carpenter
 
 
Secretary
 
 
 
 
 
 
 
April 4, 2018
 
 
 
 
YOUR VOTE IS IMPORTANT TO US. PLEASE VOTE PROMPTLY.
JPMorgan Chase & Co. uses the Securities and Exchange Commission rule permitting companies to furnish proxy materials to their shareholders on the Internet. In accordance with this rule, on or about April 4, 2018, we sent to shareholders of record at the close of business on March 16, 2018, a Notice of Internet Availability of Proxy Materials (“Notice”), which includes instructions on how to access our 2018 Proxy Statement and 2017 Annual Report online, and how to vote online for the 2018 Annual Shareholder Meeting.
If you received a Notice and would like to receive a printed copy of our proxy materials, please follow the instructions for requesting such materials included in the Notice, as well as in this proxy statement on page xx of this proxy statement.
If you plan to attend the meeting in person, you will be required to present a valid form of government-issued photo identification, such as a driver’s license or passport, and proof of ownership of our common stock as of our record date March 16, 2018. See “Information about the annual shareholder meeting” on page xx of this proxy statement.
If you hold your shares in street name and do not provide voting instructions, your shares will not be voted on any proposal on which your broker does not have discretionary authority to vote. Of the matters to be voted on at the annual meeting, your broker has discretionary authority to vote only on the ratification of the appointment of the independent registered auditors. See “What is the voting requirement to approve each of the proposals?” on page xx of this proxy statement.

 


 
Table of Contents                     RECOMMENDATIONS üû
 
       
 
ü

 
 
 
       
Proposal 1 (continued)
 
 
 
Proposal 2: Ratification of special meeting provisions in the Firm’s By-Laws
ü
 
 
 
 
 
Proposal 3: Advisory resolution to approve executive compensation
ü
 
 
 

 


 
 
This proxy statement contains forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipate,” “target,” “expect,” “estimate,” “intend,” “plan,” “goal,” “believe,” or other words of similar meaning. Forward-looking statements provide JPMorgan Chase & Co.’s current expectations or forecasts of future events, circumstances, results, or aspirations, and are subject to significant risks and uncertainties. These risks and uncertainties could cause the Firm’s actual results to differ materially from those set forth in such forward-looking statements. Certain of such risks and uncertainties are described in JPMorgan Chase & Co.’s Annual Report on Form 10-K for the year ended December 31, 2017. JPMorgan Chase & Co. does not undertake to update the forward-looking statements included in this proxy statement to reflect the impact of circumstances or events that may arise after the date the forward-looking statements were made.

 


 

 

 

 


 
2018 Proxy summary
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all the information you should consider, and you should read the entire proxy statement carefully before voting.
Your vote is important. For more information on voting and attending the annual meeting, see “Information about the annual shareholder meeting” on page xx of this proxy statement. This proxy statement has been prepared by our management and approved by the Board, and is being sent or made available to our shareholders on or about April 4, 2018.
 
 
Annual meeting overview: Matters to be voted on
 
 
     
ü
MANAGEMENT PROPOSALS
 
The Board of Directors recommends you vote FOR each director nominee and FOR the following proposals (for more information see page referenced):
 
 
 
1. Election of directors
 
 
 
2. Ratification of special meeting provisions in the Firm’s By-Laws
 
 
 
3. Advisory resolution to approve executive compensation
 
 
 
4. Approval of Amended and Restated Long-Term Incentive Plan
 
 
 
5. Ratification of PricewaterhouseCoopers LLP as the Firm’s independent registered public accounting firm
 
 
 
 
 
 
û
SHAREHOLDER PROPOSALS (if they are properly introduced at the meeting)
The Board of Directors recommends you vote AGAINST each of the following shareholder proposals 
(for more information see page referenced):
 
 
 
6. Independent Board chairman
 
 
 
7. Vesting for government service
 
 
 

 

 

 
 
     
1
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
 
     
Notable changes since 2017 Annual Meeting
 
 
 
Long-Term U.S. Investment in Employees, Branch Expansion and Local Economic Growth
 
Board Refreshment

 
 
 
 
Announced a $20 billion, five-year comprehensive investment to help employees, and support job and local economic growth in the United States:
Investing in employees with further increases to wages and benefits
Expanding the branch network
Increasing community-based philanthropic investments
Increasing small business lending
Accelerating affordable housing lending
 
Mellody Hobson elected in March 2018, one of two independent directors who joined the Board in the last three years
Crandall Bowles, a director since 2016, will retire in May 2018
 
Executive Compensation Program
 
Management Succession – Operating Committee Changes
 
 
 
Calibrated the Absolute ROTCE goal for the 2017 PSU award granted in January 2018 to 17%, based on current forecast of future performance
Introduced a risk-based capital hurdle to the PSU program referencing the Firm's Fully Phased-in Common Equity Tier 1 capital ratio
Updated the stock ownership guideline for Operating Committee members
 
Daniel Pinto and Gordon Smith appointed Co-Presidents and Co-Chief Operating Officers
Mary Erdoes, Marianne Lake, and Doug Petno each expanded their responsibilities
Three executives joined the Operating Committee:
Lori Beer, Global Chief Information Officer
Robin Leopold, Head of Human Resources
Peter Scher, Global Head of Corporate Responsibility

 

 

 
 
         
Total shareholder return (“TSR”)
The Firm delivered a TSR1 of 27% in 2017, following a TSR of 35% in 2016 and 8% in 2015, for a combined three-year TSR of 85%. The graph below shows our TSR expressed as cumulative return to shareholders over the past decade. As illustrated below, a $100 investment in JPMorgan Chase on December 31, 2007 would be valued at $311 as of December 31, 2017, significantly outperforming the financial services industry over the period, as measured by the KBW Bank Index and the S&P Financials Index.    
a2018proxyp46totalshareholde.jpg
1 TSR assumes reinvestment of dividends

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
2


 
 
 
We demonstrated strong financial performance in 2017
In 2017, the Firm delivered net income of $24.4 billion and record earnings per share ("EPS") of $6.31 with return on tangible common equity ("ROTCE")1 of 12%. Excluding the impact of tax reform and a legal benefit, the Firm delivered adjusted net income of $26.5 billion and adjusted EPS of $6.87 with adjusted ROTCE of 13%. We returned $22.3 billion of capital to shareholders (including common dividends and net share repurchases). We also gained market share in nearly all of our businesses, demonstrated strong expense discipline, continued to achieve high customer satisfaction scores, and maintained a fortress balance sheet.
 
                 
Net income of
$24.4
BILLION
 
EPS of $6.31
 
ROTCE1 of 12%
 
Tangible book value per share ("TBVPS")1 of $53.56 - up 4% from 2016
 
Distributed
$22.3 BILLION
to shareholders
Excluding the impact of tax reform and a legal benefit:
 
         
Adjusted net income2 of $26.5 BILLION
 
Adjusted EPS2 of $6.87
 
Adjusted ROTCE1,2 of 13%
 
         
The Firm has demonstrated sustained long-term financial performance
We have generated strong ROTCE over the past 10 years, while more than doubling average tangible common equity (“TCE”) from $80 billion to $185 billion, reflecting a compound annual growth rate of 10% over the period.
a2018proxychartsp45rotcea02.jpg

 
We have delivered sustained growth in both TBVPS and EPS over the past 10 years, reflecting compound annual growth rates of 10% and 19%, respectively, over the period.
a2018proxychartsptbvpsepsa03.jpg
   
1  
ROTCE and TBVPS are each non-GAAP financial measures; for a reconciliation and further explanation, see page [xx]. On a comparable U.S. GAAP basis, for 2008 through 2017 respectively, return on equity (“ROE”) was 4%, 6%, 10%, 11%, 11%, 9%, 10%, 11%, 10% and 10%, and book value per share (“BVPS”) was $36.15, $39.88, $42.98, $46.52, $51.19, $53.17, $56.98, $60.46, $64.06 and $67.04.
   
2 
Excludes the impact of the enactment of the Tax Cuts and Jobs Act of $2.4 billion (after-tax) and of a legal benefit of $406 million (after-tax). Adjusted net income and adjusted EPS are each non-GAAP financial measures; for further explanation, see page [xx].

 

 

 
 
     
3
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
 
         
We are committed to sound commonsense corporate governance practices
 
 
 
 
 
Our Board provides independent oversight of the Firm’s business and affairs
 
 
 
Reviews the strategic priorities
Evaluates the CEO’s performance
Reviews the Firm’s financial performance and delivery of long-term value to our shareholders
 
Oversees our Culture and Conduct Program
Oversees the Firm’s risk management and internal control frameworks
 
Our governance practices promote board effectiveness and shareholder interests
 
 
 
Annual Board and committee assessment
Robust shareholder rights:
proxy access
right to call a special meeting
right to act by written consent
 
Majority voting for all director elections
Stock ownership requirements for directors
100% committee independence
Executive sessions of independent directors at each regular Board meeting
Board oversight of corporate responsibility/ESG matters
 
A robust Lead Independent Director role facilitates independent board oversight of management
 
The Firm's Corporate Governance Principles require the independent directors to appoint a Lead Independent Director if the role of the Chairman is combined with that of the CEO
The Board reviews its leadership structure annually as part of its self-assessment process
Responsibilities of the Lead Independent Director include:
ü
acts as liaison between independent directors and the CEO
 
ü
presides over executive sessions of independent directors

 
ü
acts as a sounding board to the CEO
 
ü
engages and consults with major shareholders and other constituencies, where appropriate

 
ü
provides advice and guidance to the CEO on executing long-term strategy
 
ü
guides annual performance review of the CEO
ü
advises the CEO of the Board’s information needs
 
ü
guides the annual independent director consideration of CEO compensation
ü
meets one-on-one with the CEO at every regularly scheduled Board meeting
 
ü
guides full Board consideration of CEO succession
ü
has the authority to call for a Board meeting or a meeting of independent directors
 
ü
guides the self-assessment of the full Board
ü
approves agendas and adds agenda items for Board meetings and meetings of independent directors
 
ü
presides at Board meetings in the CEO’s absence or when the CEO or the Board raises a possible conflict of interest
 
 
 
 
 
We maintain an active engagement with shareholders
 
We have regular and ongoing discussions with shareholders throughout the year on a wide variety of topics, such as financial performance, strategy, competitive environment, regulatory landscape, and environmental, social & governance matters
In 2017, our shareholder engagement initiatives included:
Shareholder Outreach: Hosted more than 80 discussions on strategy, financial performance, governance, executive compensation, and environmental & social matters, among others, with shareholders representing >45% of our outstanding common stock
Annual Investor Day: Senior management gave presentations at our annual Investor Day on strategy and financial performance
Meetings/Conferences: Senior management hosted more than 50 investor meetings and presented at 12 investor conferences
Annual Shareholder Meeting: Our CEO and Lead Independent Director presented to shareholders at the Firm's 2017 annual meeting

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
4


 
 
         
Proposal 1: Election of directors – page xx
The Board of Directors has nominated the 12 individuals listed below. All are independent other than our CEO. If elected at our annual meeting, all our nominees are expected to serve until next year’s annual meeting.
 
                     
 
 
 
 
 
 
 
 
 
 
 
NOMINEE/DIRECTOR OF JPMORGANCHASE SINCE 1
 
AGE
 
PRINCIPAL OCCUPATION
 
OTHER PUBLIC
COMPANY BOARDS (#)
 
COMMITTEE MEMBERSHIP2
bammann_cmykflata02.jpg
 
Linda B. Bammann
Director since 2013
 
62
 
Retired Deputy Head of Risk Management of JPMorgan Chase & Co.3
 
0
 
Directors’ Risk Policy (Chair)
bell4_cmykflata02.jpg
 
James A. Bell
Director since 2011
 
69
 
Retired Executive Vice President of The Boeing Company
 
3
 
Audit (Chair)
burke_cmykflata02.jpg
 
Stephen B. Burke
Director since 2004
 
59
 
Chief Executive Officer of NBCUniversal, LLC
 
1
 
Compensation & Management Development;
Corporate Governance & Nominating
toddcombsphotorgb.jpg
 
Todd A. Combs
Director since 2016
 
47
 
Investment Officer at Berkshire Hathaway Inc.
 
0
 
Directors’ Risk Policy;
Public Responsibility
jimcrowncmykflatv2a02.jpg
 
James S. Crown
Director since 2004
 
64
 
President of Henry Crown and Company
 
1
 
Directors’ Risk Policy
jdimonheadshot2.jpg
 
James Dimon
Director since 2004
 
62
 
Chairman and Chief Executive Officer of JPMorgan Chase & Co.
 
0
 
 
tpflynncmykv3flata02.jpg
 
Timothy P. Flynn
Director since 2012
 
61
 
Retired Chairman and Chief Executive Officer of KPMG
 
3
 
Audit;
Public Responsibility
mhobsonheadshot.jpg
 
Mellody Hobson2
Director since March 2018

 
 
49
 
President of Ariel Investments, LLC

 
 
2
 
 
jacksoncmykflata02.jpg
 
Laban P. Jackson, Jr.
Director since 2004
 
75
 
Chairman and Chief Executive Officer of Clear Creek Properties, Inc.
 
0
 
Audit
michaelnealcmykv3flata02.jpg
 
Michael A. Neal
Director since 2014
 
65
 
Retired Vice Chairman of General Electric Company and Retired Chairman and Chief Executive Officer of GE Capital
 
0
 
Directors’ Risk Policy
leerraymondv2cmyka02.jpg
 
Lee R. Raymond
(Lead Independent Director)
Director since 2001
 
79
 
Retired Chairman and Chief Executive Officer of Exxon Mobil Corporation
 
0
 
Compensation & Management Development (Chair);
Corporate Governance & Nominating
weldonbillcmykflata02.jpg
 
William C. Weldon
Director since 2005
 
69
 
Retired Chairman and Chief Executive Officer of Johnson & Johnson
 
2
 
Compensation & Management Development;
Corporate Governance & Nominating (Chair)
   
1 
Director of a heritage company of the Firm as follows: Bank One Corporation: Mr. Burke (2003–2004), Mr. Crown (1996–2004), Mr. Dimon, Chairman of the Board (2000–2004), and Mr. Jackson (1993–2004); First Chicago Corp.: Mr. Crown (1991–1996); and J.P. Morgan & Co. Incorporated: Mr. Raymond (1987–2000).
   
2 
Principal standing committee. Ms. Bowles, who is not standing for re-election this year, is currently Chair of the Public Responsibility Committee; a new chair for 2018 will be elected by the Board following the annual meeting. Ms. Hobson will begin service on Board committee following the annual meeting.
   
3 
Retired from JPMorgan Chase & Co. in 2005.

 

 

 
 
     
5
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
 
         
Proposal 2: Ratification of special meeting provisions in the Firm’s By-Laws – page xx
In 2017, as part of our engagement discussions with shareholders, we requested feedback about our By-Law provisions regarding shareholders’ rights to call a special meeting. While most shareholders expressed support for the right to call a special meeting if an appropriate threshold of shareholders requested it, there were varying opinions regarding what that appropriate threshold should be. Accordingly, and in lieu of a shareholder proposal seeking to reduce the threshold, the Board is seeking shareholder ratification of the special meeting provisions in the Firm's By-Laws which include a threshold providing that holders of at least 20% of the outstanding shares have the right to call a special meeting.
 
         
Proposal 3: Advisory resolution to approve executive compensation – page xx
We are submitting an advisory resolution to approve the executive compensation of our Named Executive Officers (“NEOs”). The table below is a summary of the 2017 compensation of our NEOs.
 
                               
Name and
principal position
 
INCENTIVE COMPENSATION
 
Salary

 
Cash

 
Restricted stock units

 
Performance share units

 
Total

 
 
 
 
 
 
 
James Dimon
Chairman and CEO
$
1,500,000

 
$
5,000,000

 
$

 
$
23,000,000

 
$
29,500,000

 
Marianne Lake
Chief Financial Officer
750,000

 
5,100,000

 
3,825,000

 
3,825,000

 
13,500,000

 
Mary Callahan Erdoes
CEO Asset & Wealth Management
750,000

 
7,500,000

 
5,625,000

 
5,625,000

 
19,500,000

 
Daniel Pinto1
CEO Corporate & Investment Bank
8,238,628

 

 
6,380,686

 
6,380,686

 
21,000,000

 
Gordon Smith
CEO Consumer & Community Banking
750,000

 
7,700,000

 
5,775,000

 
5,775,000

 
20,000,000

 
1 Mr. Pinto, who is based in the U.K., received a fixed allowance of $7,635,000 paid in British pound sterling, and a salary of £475,000.
 
         
In response to last year’s 92% Say-on-Pay support and positive shareholder feedback, the Compensation & Management Development Committee ("CMDC") maintained the key features of our compensation program. We believe shareholders should consider five key factors in their evaluation of this year’s proposal:
 
1. Strong performance
We continued to deliver strong multi-year financial performance, invest in our future, strengthen our risk and control environment, reinforce the importance of our culture and values, deliver on our long-standing commitment to serve our communities, and conduct business in a responsible way to drive inclusive growth.
2. Disciplined performance assessment to determine pay
The CMDC uses a balanced approach to determine annual compensation by assessing performance against four broad performance categories over a sustained period of time. A material portion of Operating Committee member compensation is delivered in the form of at-risk Performance Share Units ("PSUs"), reinforcing accountability and alignment with shareholder interests by linking the ultimate payout to pre-established absolute and relative goals.
3. Sound pay practices
We believe our compensation philosophy promotes an equitable and well-governed approach to compensation, including pay practices that attract and retain top talent, are responsive to and aligned with shareholders, and encourage a shared success culture in support of our business principles.
4. Pay is aligned with performance
CEO pay is strongly aligned to the Firm’s short-, medium- and long-term performance, with approximately 80% of the CEO’s variable pay deferred into equity, of which 100% is in PSUs. Other NEO pay is also strongly tied to Firm and line of business performance, with a majority of variable pay deferred into equity, of which 50% is in PSUs.
5. Rigorous accountability and recovery provisions
Our executive compensation program is designed to hold executives accountable, when appropriate, for meaningful actions or issues that negatively impact business performance in current or future years.

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
6


 
 
         
Proposal 4: Approval of Amended and Restated Long-Term Incentive Plan – page xx
We are seeking approval of our Amended and Restated Long-Term Incentive Plan (the “2018 Plan”), to extend the term of the 2015 Plan by four years, to a term date of May 31, 2022, and to authorize approximately 24 million additional shares, bringing the total number of shares authorized under the Plan to 85 million shares (which is 10 million fewer than that approved by shareholders under the 2015 Plan). During our annual shareholder outreach program and discussion of our equity compensation practices, our shareholders indicated a preference for more frequent requests for approval of a smaller quantity of shares, as opposed to requesting larger quantities less frequently. As a result, the Compensation & Management Development Committee and the Board considered this feedback in determining the number of shares to request for authorization under the 2018 Plan.
The 2018 Plan would also incorporate our compensation program for non-employee directors, with certain established retainers (both cash and equity) and certain limitations on future changes to those retainers.
 
         
Proposal 5: Ratification of PricewaterhouseCoopers LLP as the Firm’s independent registered public accounting firm – page xx
The Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) as the Firm’s independent registered public accounting firm to audit the Consolidated Financial Statements of JPMorgan Chase and its subsidiaries for the year ending December 31, 2018. A resolution is being presented to our shareholders requesting them to ratify PwC’s appointment.

 

 

 
 
     
7
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 

 

 

 

 

 

 

 

 

 

 

 
 
 
CORPORATE GOVERNANCE

 
Proposal 1:
Election of Directors

 
Our Board of Directors has nominated 12 directors, who, if elected by shareholders at our annual meeting, will be expected to serve until next year’s annual meeting. All nominees are currently directors.
 

 
 
   
ü
RECOMMENDATION:
Vote FOR all nominees

 

 

 
 
         
 
Proposal 2:
Ratification of special meeting provisions in the Firm’s By-Laws

 
The Board is seeking shareholder ratification of the provisions of the Firm’s By-Laws, as amended, that grant shareholders who own at least 20% of the Firm’s outstanding common stock and satisfy other requirements, the ability to direct the Firm to call a special meeting of shareholders.
 

 
 
   
ü
RECOMMENDATION:
Vote FOR ratification of special meeting provisions

 

 

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
8


 
Executive Summary
Our Board has nominated 12 directors for election at this year’s annual meeting. Our Board believes these nominees afford our Firm the combined skills, experience, and personal qualities, as well as the length of tenure and collegial tone, needed for an effective and engaged Board.
Information about:
   
The specific experience and qualifications of each of our nominees are described at pages xx-xx
   
The personal and professional attributes and skills of our nominees are described at pages xx-xx
Our commitment to sound governance is integral to our business. The Firm’s Corporate Governance Principles (“Principles”) establish a framework for the governance of the Board and the management of the Firm. These Principles outline the Firm’s practices regarding Board composition, responsibilities and obligations, structure, and operations, among other governance matters. The Principles have been approved by the Board and are periodically reviewed and updated as appropriate. They reflect broadly recognized governance practices and regulatory requirements including New York Stock Exchange (NYSE) corporate governance listing standards. The full text of the Corporate Governance Principles can be accessed on our website at jpmorganchase.com/corp-gov-principles.
 
Descriptions of our governance practices related to:
   
Board composition, nomination and succession planning can be found at pages xx-xx
   
How our Board conducts its business can be found at pages xx-xx
   
Board oversight of the business and affairs of the Firm can be found at pages xx-xx
   
The active engagement of our directors with the Firm’s stakeholders can be found at pages xx-xx
   
Other corporate governance policies and practices can be found at pages xx-xx
   
Director compensation can be found at page xx
The Board regularly reviews its governance principles and best practices. As part of these reviews, the Board seeks to ensure that the views and input of shareholders are understood and represented. Currently, the Firm’s By-Laws grant shareholders who own at least 20% of the Firm’s shares the right to call a special meeting. During our shareholder engagement program, most shareholders expressed support for the right of shareholders to call a special meeting if an appropriate threshold of holders request it. However, there were varying opinions regarding what that appropriate threshold should be. Accordingly, and in lieu of a shareholder proposal seeking to reduce the threshold, the Board is seeking shareholder ratification of the special meeting provisions in the Firm's By-Laws which include a threshold providing that holders of at least 20% of the outstanding shares have the right to call a special meeting. Further information about this management proposal is described at pages xx-xx.

 

 

 
 
     
9
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
Proposal 1 — Election of directors
Director nominees
The persons listed on the following pages have been nominated for election because they possess the skills, experience, and personal attributes needed to guide the Firm’s strategy, and to oversee its risk management framework and management’s execution of its responsibilities.
In the biographical information about our director nominees which follows, the ages indicated are as of May 15, 2018, and the other information is as of the date of this proxy statement. There are no family relationships among the director nominees. Unless otherwise stated, all nominees have been continuously employed by their present employers for more than five years.
In addition to the biographical information which follows, reference is made to the description of our nominees’ personal and professional attributes and skills at page xx of this proxy statement.
All of the nominees are currently directors of the Firm. Other than Ms. Hobson, who was elected to the Board
 
in March 2018, each was elected to the Board by our shareholders at our 2017 annual meeting, each with the support of more than 95% of the votes cast. For more information about the recruitment of Ms. Hobson, see page xx of this proxy statement.
Ms. Bowles, who has served as a director of the Firm since 2006, has decided to retire from the Board and is not standing for re-election when her term expires on the eve of this year’s annual meeting.
Each nominee has agreed to be named in this proxy statement and, if elected, to serve a one-year term expiring at our 2019 annual meeting.
Directors are expected to attend our annual shareholder meetings. All of the then current nominees were present at the annual meeting held in May 2017. All of the current nominees are expected to attend our 2018 annual shareholder meeting, other than Mr. Bell, who is unable to attend due to a prior professional obligation.
cmb699proxyprofilenomineesfe.jpg

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
10


 
 
         
bammann_cmykflata02.jpg
 
 
Linda B. Bammann
Retired Deputy Head of Risk Management of JPMorgan Chase & Co.
Age: 62
 
 
Through her service on other boards, including as Chair of the Business and Risk Committee of the Federal Home Loan Mortgage Corporation, and her management tenure at JPMorgan Chase and Bank One Corporation, Ms. Bammann has developed insight and wide-ranging experience in financial services and extensive experience in risk management and regulatory issues.
 
 
 
Director since: 2013
Committees:
Directors' Risk Policy Committee (Chair)
Director Qualification
Highlights:
Financial services
Regulated industries and regulatory issues
Risk management and controls

 

 
 
 
 
 
 
 
 
 
Career Highlights
JPMorgan Chase & Co., a financial services company (merged with Bank One Corporation in July 2004)
Deputy Head of Risk Management (2004– 2005)
Chief Risk Management Officer and Executive Vice President, Bank One Corporation (2001–2004)
Senior Managing Director, Banc One Capital Markets (2000–2001)
Other Public Company Directorships
Federal Home Loan Mortgage Corporation (2008–2013)
Manulife Financial Corporation (2009–2012)
Other Experience
Former Board Member, Risk Management Association
Former Chair, Loan Syndications and Trading Association
Education
Graduate of Stanford University
M.A., Public Policy, University of Michigan
 
         
bell4_cmykflata02.jpg
 
 
James A. Bell
Retired Executive Vice President of The Boeing Company
Age: 69
 
 
Over a four-decade corporate career, Mr. Bell led global businesses in a highly regulated industry, oversaw successful strategic growth initiatives, and developed extensive experience in finance, accounting, risk management and controls. While Chief Financial Officer, he oversaw two key Boeing businesses: Boeing Capital Corporation, the company’s customer-financing subsidiary, and Boeing Shared Services, an 8,000 person, multi-billion dollar business unit that provides common internal services across Boeing’s global enterprise.
 
 
 
Director since: 2011
Committees:
Audit Committee (Chair)
Director Qualification
Highlights:
Financial and accounting
Leadership of a large, complex organization
Regulatory industries and regulatory issues
Technology

 
 
 
 
 
 
 
 
 
Career Highlights
The Boeing Company, an aerospace company and manufacturer of commercial jetliners and military aircraft
Corporate President (2008–2012)
Executive Vice President (2003–2012)
Chief Financial Officer (2003–2012)
Senior Vice President of Finance and Corporate Controller (2000–2003)
Other Public Company Directorships
Apple Inc. (since 2015)
CDW Corporation (since 2005)
Dow DuPont Inc. (formerly Dow Chemical Company Inc.) (since 2005)
Other Experience
Trustee, Rush University Medical Center
Education
Graduate of California State University at Los Angeles
 
 
 
 

 

 
 
     
11
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
 
         
burke_cmykflata02.jpg
 
 
Stephen B. Burke
Chief Executive Officer of NBCUniversal, LLC
Age: 59
 
 
Mr. Burke’s roles at Comcast Corporation and his prior work at other large global media corporations have given him broad exposure to the challenges associated with managing large and diverse businesses. In these roles he has dealt with a variety of issues including audit and financial reporting, risk management, executive compensation, sales and marketing, technology, and operations. These experiences have also provided Mr. Burke a background in regulated industries and international business.
 
 
 
Director since: 2004 and Director of Bank One Corporation from 2003 to 2004
Committees:
Compensation & Management Development Committee
Corporate Governance & Nominating Committee
Director Qualification Highlights:
Financial and accounting
Leadership of a large, complex organization
Management development and succession planning
Regulated industries and regulatory issues

 
 
 
 
 
 
 
 
 
Career Highlights
Comcast Corporation/NBCUniversal, LLC, leading providers of entertainment, information and communication products and services
Chief Executive Officer of NBCUniversal, LLC, and a senior executive of Comcast (since 2011)
Chief Operating Officer, Comcast (2004– 2011)
President, Comcast Cable Communications Inc. (1998–2010)

 
Other Public Company Directorships
Berkshire Hathaway Inc. (since 2009)
Education 
Graduate of Colgate University
M.B.A., Harvard Business School
 
 
 
 
 
         
toddcombsphotorgb.jpg
 
 
Todd A. Combs
Investment Officer at Berkshire Hathaway Inc.
Age: 47
 
 
Mr. Combs’ roles have provided him with extensive experience in financial markets, risk assessment, and regulatory matters. His service on three of Berkshire Hathaway’s subsidiary boards has given him insights into matters such as corporate governance, strategy, succession planning, and compensation.
 
 
 
Director since: 2016
Committees:
Directors’ Risk Policy Committee
Public Responsibility Committee
Director Qualification Highlights:
Financial services
Regulated industries and regulatory issues
Risk management and controls

 
 
 
 
 
 
 
 
 
Career Highlights
Berkshire Hathaway Inc., a holding company whose subsidiaries engage in a number of diverse business activities including finance, insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, retailing, and other services
Investment Officer (since 2010)
Castle Point Capital Management, an investment partnership Mr. Combs founded in 2005 to manage capital for endowments, family foundations, and institutions
CEO and Managing Member (20052010)
Other Public Company Directorships
None
Education
Graduate of Florida State University
M.B.A., Columbia Business School
 
 
 
 

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
12


 
 
         
jimcrowncmykflatv2a02.jpg
 
 
James S. Crown
President of Henry Crown and Company
Age: 64
 
 
Mr. Crown’s position with Henry Crown and Company and his service on other public company boards have given him extensive experience with risk management, audit and financial reporting, investment management, capital markets activity, and executive compensation matters.
 
 
 
Director since: 2004 and Director of Bank One Corporation from 1991 to 2004
Committees:
Directors’ Risk Policy Committee
Director Qualification Highlights:
Financial services
Management development and succession planning
Risk management and controls

 
 
 
 
 
 
 
 
 
Career Highlights
Henry Crown and Company, a privately owned investment company that invests in public and private securities, real estate, and operating companies
President (since 2002)
Vice President (1985–2002)
Other Public Company Directorships
General Dynamics (since 1987) - Lead Director since 2010
Sara Lee Corporation (1998-2012)
Other Experience
Chairman of the Board of Trustees, Aspen Institute
Trustee, Museum of Science and Industry
Trustee, University of Chicago
Member, American Academy of Arts and Sciences
Former member of the President’s Intelligence Advisory Board
Education
Graduate of Hampshire College
JD, Stanford University Law School
 
 
 
 
 
         
jdimonheadshot2.jpg
 
 
James Dimon
Chairman and Chief Executive Officer of JPMorgan Chase & Co.
Age: 62
 
 
Mr. Dimon is an experienced leader in the financial services industry, and has extensive international business experience as well. As CEO, he is knowledgeable about all aspects of the Firm’s business activities. His work has given him substantial experience and insight into the regulatory process.
 
 
 
Director since: 2004 and Chairman of the Board of Bank One Corporation from 2000 to 2004
Director Qualification Highlights:
Financial services
Leadership of a large, complex organization
Management development and succession planning
Regulated industries and regulatory issues

 
 
 
 
 
 
 
 
 
Career Highlights
JPMorgan Chase & Co., a financial services company (merged with Bank One Corporation in July 2004)
Chairman of the Board (since 2006) and Director (since 2004); Chief Executive Officer (since 2005)
President (2004–2018)
Chief Operating Officer (2004–2005)
Chairman and Chief Executive Officer at Bank One Corporation (2000–2004)
Other Public Company Directorships
None
Other Experience
Director, Harvard Business School
Director, Catalyst
Chairman, Business Roundtable
Member, Business Council
Trustee, New York University School of Medicine
Education
Graduate of Tufts University
M.B.A., Harvard Business School
 
 
 
 

 

 
 
     
13
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
 
         
tpflynncmykv3flata02.jpg
 
 
Timothy P. Flynn
Retired Chairman and Chief Executive Officer of KPMG
Age: 61
 
 
Through his leadership positions at KPMG, Mr. Flynn gained perspective on the evolving business and regulatory environment, experience with many of the issues facing complex, global companies, and extensive experience in financial services, auditing matters and risk management.
 
 
 
Director since: 2012
Committees:
Audit Committee
Public Responsibility Committee
Director Qualification Highlights:
Financial services
Financial and accounting
Leadership of a large, complex organization
Risk Management and controls

 
 
 
 
 
 
 
 
 
Career Highlights
KPMG International, a global professional services organization providing audit, tax and advisory services
Chairman, KPMG International (2007– 2011)
Chairman, KPMG LLP (2005–2010)
Chief Executive Officer, KPMG LLP (2005– 2008)
Vice Chairman, Audit and Risk Advisory Services, KPMG LLP (2001–2005)
Other Public Company Directorships
United Healthcare (since 2017)
Alcoa Corporation (since 2016)
Wal-Mart Stores, Inc. (since 2012)
Chubb Corporation (2013–2016)
Other Experience
Member, Board of Trustees, The University of St. Thomas
Former Trustee, Financial Accounting Standards Board
Former Member, World Economic Forum’s International Business Council
Former Board Member, International Integrated Reporting Council
Education 
Graduate of The University of St. Thomas
 
 
 
 
 
         
mhobsonheadshot.jpg
 
 
Mellody Hobson
President of Ariel Investments, LLC
Age: 49
 
 
Ms. Hobson’s roles at Ariel Investments, LLC and on other public company boards have provided her with significant experience in financial services and financial markets, corporate governance, strategic planning, operations, regulatory issues, and international business.
 
 
 
Director since: March 2018
Committees: Ms. Hobson will begin her committee service after the 2018 annual meeting
Director Qualification
Highlights:
Financial services
Management development and succession planning
Regulated industries and regulatory issues
 
 
 
 
 
 
 
 
Career Highlights
Ariel Investments, LLC, a Chicago-based investment management firm
President (since 2000)
Chairman of the Board of Trustees of Ariel Investment Trust, a registered investment company (since 2006)
Regular contributor and analyst on finance, the markets, and economic trends for CBS News
Other Public Company Directorships
The Estée Lauder Companies Inc. (since 2005)
Starbucks Corporation (since 2005)
Other Experience
Chairman, After School Matters
Director, Economic Club of Chicago
Board member, The Chicago Public Education Fund
Executive Committee of the Investment Company Institute’s Board of Governors
Education
Graduate of the Woodrow Wilson School of International Relations and Public Policy at Princeton University

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
14


 
 
         
jacksoncmykflata02.jpg
 
 
Laban P. Jackson, Jr.
Chairman and Chief Executive Officer of Clear Creek Properties, Inc.
Age: 75
 
 
Mr. Jackson’s service on the board of the Federal Reserve Bank of Cleveland and on other public and private company boards has given him extensive experience in financial services, risk management, audit and financial reporting matters, government relations and regulatory issues, and executive compensation and succession planning matters.
 
 
 
Director since: 2004 and Director of Bank One Corporation from 1993 to 2004
Committees:
Audit Committee
Director Qualification
Highlights:
Financial and accounting
Management development and succession planning
Regulated industries and regulatory issues
Risk management and controls
 
 
 
 
 
 
 
 
Career Highlights
Clear Creek Properties, Inc., a real estate development company
Chairman and Chief Executive Officer (since 1989)
Other Public Company Directorships
The Home Depot (2004–2008)
Other Experience
Former Director, Federal Reserve Bank of Cleveland
Emeritus Trustee, Markey Cancer Foundation
Education
Graduate of the United States Military Academy
 
 
 
 
 
         
michaelnealcmykv3flata02.jpg
 
 
Michael A. Neal
Retired Vice Chairman of General Electric Company and Retired Chairman and Chief Executive Officer of GE Capital
Age: 65
 
 
Mr. Neal has extensive experience managing large, complex businesses in regulated industries around the world. During his career with General Electric and GE Capital, Mr. Neal oversaw the provision of financial services and products to consumers and businesses of all sizes globally. His professional experience has provided him with insight and extensive expertise in risk management, strategic planning and operations, finance and financial reporting, government and regulatory relations, and management development and succession planning.
 
 
 
Director since: 2014
Committees:
Directors’ Risk Policy Committee
Director Qualification Highlights:
Financial services
Leadership of large, complex organization
International business operations
Technology

 
 
 
 
 
 
 
 
 
Career Highlights
General Electric Company, a global industrial and financial services company
Vice Chairman (2005–2013)
Chairman and Chief Executive Officer, GE Capital (2007–2013)
Other Public Company Directorships
None
Other Experience
Founder and advisor, Acasta Enterprises, Inc.
Member, Advisory Board, Sam Nunn School of International Affairs, Georgia Institute of Technology
Trustee, The GT Foundation of the Georgia Institute of Technology
Education
Graduate of the Georgia Institute of Technology
 
 
 
 

 

 
 
     
15
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
 
         
leerraymondv2cmyka02.jpg
 
 
Lee R. Raymond (Lead Independent Director)
Retired Chairman and Chief Executive Officer of Exxon Mobil Corporation
Age: 79
 
 
During his tenure at ExxonMobil and its predecessors, Mr. Raymond gained experience in all aspects of business management, including audit and financial reporting, risk management, executive compensation, marketing, and operating in a regulated industry. He also has extensive international business experience.
 
 
 
Director since: 2001 and Director of J.P. Morgan & Co. Incorporated from 1987 to 2000
Committees:
Compensation & Management Development Committee (Chair)
Corporate Governance & Nominating Committee
Director Qualification Highlights:
International business operations
Management development and succession planning
Public company governance
Technology
 
 
 
 
 
 
 
 
Career Highlights
ExxonMobil, an international oil and gas company
Chairman and Chief Executive Officer of ExxonMobil (1999–2005)
Chairman and Chief Executive Officer of Exxon Corporation (1993–1999)
Other Public Company Directorships
None
Other Experience
Member, Council on Foreign Relations
Emeritus Trustee, Mayo Clinic
Member, National Academy of Engineering
Member and past Chairman of the National Petroleum Council
Education
Graduate of the University of Wisconsin
PhD., Chemical Engineering, University of Minnesota

 
 
 
 
 
 
         
weldonbillcmykflata02.jpg
 
 
William C. Weldon
Retired Chairman and Chief Executive Officer of Johnson & Johnson
Age: 69
 
 
At Johnson & Johnson, Mr. Weldon held a succession of executive positions that gave him extensive experience in consumer sales and marketing, international business operations, financial reporting and regulatory matters.
 
 
 
Director since: 2005
Committees:
Corporate Governance & Nominating Committee (Chair)
Compensation & Management Development Committee
Director Qualification Highlights:
International business operations
Leadership of a large, complex organization
Management development and succession planning
Public company governance
 
 
 
 
 
 
 
 
Career Highlights
Johnson & Johnson, a global healthcare products company
Chairman of the Board and Chief Executive Officer (2002–2012)
Vice Chairman, Pharmaceuticals Group (2001–2002)
Other Public Company Directorships
CVS Health Corporation (since 2013)
Exxon Mobil Corporation (since 2013)
The Chubb Corporation (2013–2016)
Johnson & Johnson (2002–2012)
Other Experience
Chairman, Board of Trustees, Quinnipiac University
Education 
Graduate of Quinnipiac University
 
 
 
 

 

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
16


 
 
 
Board composition, nomination and succession process
 
 
JPMorgan Chase seeks director candidates who will uphold the highest standards, are committed to the Firm’s values, and who will be strong independent stewards of the long-term interests of shareholders. The Board also looks for individuals with demonstrated experience and success in executive fields relevant to
 
the Firm’s businesses and operations and who will contribute diverse viewpoints and perspectives in providing independent oversight of management. The Board believes that a combination of individuals who possess complementary attributes and skills will most effectively oversee the Firm’s strategy and business.

 
Personal and professional attributes and skills of the nominees
In furtherance of the foregoing, the Board considers a wide range of attributes when selecting and recruiting candidates. Our nominees have executive experience and skills that are aligned with our business and strategy as follows:
 
                       
FINANCIAL AND ACCOUNTING – Knowledge of accounting and financial reporting and of auditing processes and standards
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL SERVICES – Experience in or with the financial services industry, including investment banking, global financial markets and consumer products and services

 
 
 
 
 
 
 
 
 
 
 
All our nominees possess:
Integrity
Judgment
Strong work ethic
Strength of conviction
Collaborative approach to engagement and oversight
Inquisitive and objective perspective
Willingness to appropriately challenge management
 
 
 
 
 
 
10
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTERNATIONAL BUSINESS OPERATIONS – Operational experience in diverse geographic, political and regulatory environments

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LEADERSHIP OF A LARGE, COMPLEX ORGANIZATION – Senior executive experience managing business operations, development and strategic planning

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MANAGEMENT DEVELOPMENT AND SUCCESSION PLANNING – Experience in senior executive development, succession planning, and compensation matters

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PUBLIC COMPANY GOVERNANCE – Knowledge of public company governance issues and policies and governance best practices
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12
 
 
 
 
 
 
 
 
 
 
 
 
 
TECHNOLOGY – Experience with or oversight of innovative technology, cybersecurity, information systems/data management, fintech or privacy

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REGULATED INDUSTRIES AND REGULATORY ISSUES – Experience with regulated businesses, regulatory requirements, and relationships with regulators

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RISK MANAGEMENT AND CONTROLS – Experience in assessment and management of business and financial risk factors
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For additional information about our director criteria, see our Corporate Governance Principles at jpmorganchase.com/corp-gov-principles.

 

 

 

 
 
     
17
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
Independence
All of the Firm’s non-management Board members are independent, under both the NYSE corporate governance listing standards and the Firm’s independence standards as set forth in its Corporate Governance Principles.
For a director to be considered independent, he or she must have no disqualifying relationships as defined by the NYSE, and the Board must have affirmatively determined that he or she has no material relationships with JPMorgan Chase, either directly or as a partner, shareholder or officer of another organization that has a relationship with the Firm.
In assessing the materiality of relationships with the Firm, the Board considers relevant facts and circumstances. Given the nature and broad scope of the products and services provided by the Firm, there are from time to time ordinary course of business transactions between the Firm and a director, his or her immediate family members, or principal business affiliations. These may include, among other relationships: extensions of credit; provision of other financial and financial advisory products and services; business transactions for property or services; and charitable contributions made by the JPMorgan Chase Foundation or the Firm to a nonprofit organization of which a director is an officer. The Board reviews these relationships to assess their materiality and determine if any such relationship would impair the independence and judgment of the relevant director.
The relationships and transactions the Board considered in evaluating each director’s independence were as follows:
   
Consumer credit: extensions of credit provided to directors Bowles, Hobson and Jackson; and credit cards issued to directors Bammann, Bell, Bowles, Crown, Flynn, Jackson, Neal, Raymond, and Weldon, and their immediate family members
   
Wholesale credit: extensions of credit and other financial and financial advisory products and services provided to: NBCUniversal, LLC and Comcast Corporation, for which Mr. Burke is the Chief Executive Officer and a senior executive, respectively, and their subsidiaries; Berkshire Hathaway Inc., for which Mr. Combs is an Investment Officer, and its
 
subsidiaries; Henry Crown and Company, for which Mr. Crown is the President, and other Crown family-owned entities; Movement Mortgage LLC, for which a daughter-in-law of Ms. Bowles is the Chief Financial Officer; Ariel Investments, LLC for which Mellody Hobson is the President, and its subsidiaries and funds; RR Advisors LLC, for which a son of Mr. Raymond is an executive officer; and portfolio companies that have among its principal shareholders funds managed by The Energy & Minerals Group, for which a son of Mr. Raymond is the Chief Executive Officer
   
Goods and services: commercial office space leased by the Firm from subsidiaries of companies in which Mr. Crown and members of his immediate family have indirect ownership interests; national media placements with NBCUniversal and Comcast outlets; transferable state tax credits purchased from NBCUniversal; and purchases from Berkshire Hathaway subsidiaries of merchandising fixtures, private aviation services, and professional services related to the Firm’s corporate-owned aircraft
   
Other relationship: the Firm’s publicly-announced plan to partner with Berkshire Hathaway and Amazon on ways to address healthcare for U.S. employees of the three companies
The Board, having reviewed the above-described relationships between the Firm and each director, determined, in accordance with the NYSE’s listing standards and the Firm’s independence standards, that each non-management director (Linda B. Bammann, James A. Bell, Crandall C. Bowles, Stephen B. Burke, Todd A. Combs, James S. Crown, Timothy P. Flynn, Mellody Hobson, Laban P. Jackson, Jr., Michael A. Neal, Lee R. Raymond and William C. Weldon) had only immaterial relationships with JPMorgan Chase and accordingly is independent.
Directors who served on the Audit and Compensation & Management Development Committees of the Board were also determined to meet the additional independence and qualitative criteria of the NYSE listing standards applicable to directors serving on those committees. For more information about the committees of the Board, see pages xx-xx.

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
18


 
Candidate nomination process
Maintaining an appropriate balance of experience and refreshment is a focus of the Corporate Governance & Nominating Committee (“Governance Committee”). In furtherance of this objective, the Board has added two new directors in the last three years.
The Governance Committee oversees the candidate nomination process and the evaluation of new candidates for Board membership. It also oversees the renomination process, which includes evaluation of each individual director’s contributions to our Board.
Director recruitment process
When considering candidates for the Board, the Governance Committee reviews the Firm’s strategy, risk profile and current board composition to determine the skills and experience needed. The Governance Committee solicits and evaluates candidate recommendations from shareholders, management, directors and a third-party advisor. It considers the candidate’s personal and professional skills, as well as the candidate’s independence, gender, race, ethnicity, nationality, and background, among other attributes. The Governance Committee may also seek candidates with specific skills and experiences based on the needs of the Firm at a specific time.
Following the preliminary assessment of a candidate, the Governance Committee, the Lead Independent Director, and the Chairman of the Board meet with the potential nominee prior to putting the candidate forward for consideration by the full Board.
Ms. Mellody Hobson was elected to the Firm’s Board of Directors in March 2018. Ms. Hobson has been among a select group of individuals considered as part of the Governance Committee’s evaluation of prospective Board members in recent years. Ms. Hobson is well known in the financial services industry, and has been an active participant at Firm and industry events, including as a featured speaker. Based on her background and the support of several directors who know of Ms. Hobson’s diligence, efforts and effectiveness in her past service on another public company board, Mr. Dimon suggested that the Governance Committee consider Ms. Hobson as a prospective candidate when he learned of her availability for service on the Board this year. After Mr. Raymond met with Ms. Hobson and after the
 
Governance Committee reviewed her qualifications, including her experience in financial markets, public company governance, leadership, operational and regulatory issues, as well as her constructive personal attributes and her independence, Ms. Hobson was recommended for election to the Board. For information on Ms. Hobson’s qualifications, see page xx of the proxy statement.
Our By-Laws also permit a shareholder or group of up to 20 shareholders who have continuously owned at least 3% of the Firm’s outstanding shares for at least three years to nominate up to 20% of the Board (but in any event at least two directors). For further information, see page xx.
Shareholders who want to recommend a candidate for election to the Board may do so by writing to the Secretary at JPMorgan Chase & Co., 270 Park Avenue, New York, NY 10017; or by emailing the Office of the Secretary at corporate.secretary@jpmchase.com. All candidates, however recommended to the Governance Committee, are evaluated based on the same standards.
Director re-nomination process
In considering whether to re-nominate a director for election at our annual meeting, the Governance Committee reviews each director, considering such factors as:
   
The extent to which the director’s skills and experience, as well as his or her personal attributes, continue to contribute to the Board’s effectiveness
   
Feedback from the annual Board and committee self-assessments
   
Shareholder feedback, including the support received by director nominees elected at our annual meeting of shareholders
   
Attendance and participation at Board and committee meetings
   
Independence
Each of our director nominees has been recommended for election by our Governance Committee and approved for re-nomination by our Board.
Our Corporate Governance Principles require a non-management director to offer not to stand for re-election in each calendar year following a year in which

 

 
 
     
19
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
the director will be 72 or older. The Board (other than the affected director) then determines whether to accept the offer. The Board believes that, while refreshment is an important consideration in assessing Board composition, the best interests of the Firm are served by taking advantage of all available talent, and evaluations as to director candidacy should not be determined solely on age.
Consistent with this principle, two of our director nominees, Lee R. Raymond and Laban P. Jackson, Jr., offered not to stand for re-election this year. The Board reviewed their offers, taking into account their contributions, the results of the annual Board and committee self-assessment processes, ongoing succession planning for the Board, and the other factors listed above. The Board determined that Mr. Raymond and Mr. Jackson each possesses the capability, judgment, and other skills and attributes the Board looks for in a director, that each has broad experience both within and outside the Firm that continues to be of great value to the Board, and that their continued service as directors is in the best interests of the Firm’s shareholders. Mr. Raymond brings strong and seasoned leadership skills as Lead Independent Director and as Chairman of the Compensation & Management Development Committee. Mr. Jackson has served as the Chair of the Audit Committee and has spent significant time meeting with management and regulators globally. Both Mr. Raymond and Mr. Jackson have participated in shareholder engagement, including speaking with certain of our shareholders about our strategy, and risk management and business practices.
Following its review, the Board determined (with the affected director abstaining with respect to himself) that both Mr. Raymond and Mr. Jackson should be re-nominated for election as directors and therefore did not accept either offer not to stand for re-election. For specific information on each of Mr. Raymond’s and Mr. Jackson’s qualifications and their individual contributions to the Board, including their Board committee roles, please see pages xx and xx, respectively, of this proxy statement. For a description of the annual Board and committee self-assessment process, see page xx of this proxy statement.

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
20


 
Key facts about our Board of Directors
 
               
 
9
Board Meetings
Communication between meetings as appropriate
 
8
Executive sessions of independent directors
Led by Lead Independent Director
 
44
Meetings of Principal Standing Committees
 
37
Meetings of Specific Purpose Committees
 
 
 
 
 
 
Annual Board and Committee assessment
Conducted by the independent directors and guided by the Lead Independent Director, with the assistance of the General Counsel
Each director participates and provides feedback in multiple discussions on a range of issues, including: strategic priorities; Board structure and composition; how the Board spends its time; oversight of, and interaction with, management; culture and conduct; and committee effectiveness
Each of the principal standing committees also conducts an annual self-assessment, led by the respective committee chairs and generally includes, among other topics, committee composition and effectiveness, leadership, agenda planning, and the flow of information received from management
a2018proxyp20chevron.jpg
 
 
Two new independent directors joined the Board in the last three years, including Ms. Hobson who was elected to the Board in March 2018
Committee Chairs were refreshed in 2017: Ms. Bammann became Chair of the Directors’ Risk Policy Committee (DRPC), succeeding Mr. Crown; Mr. Bell became Chair of the Audit Committee, succeeding Mr. Jackson
Committee members were also refreshed in 2017: Mr. Flynn joined the Audit Committee and stepped down from the DRPC, and Mr. Combs joined the DRPC and Public Responsibility Committee
 
       
Sound governance practices
ü
Annual election of all directors
ü
Robust shareholder engagement process, including participation by our Lead Independent Director
ü
Majority voting for director elections
ü
Bi-annual investor feedback review each spring and fall
ü
100% committee independence
ü
Consideration of diversity in director succession
ü
Lead Independent Director with clearly-defined responsibilities
ü
Each director attended 75% or more of total meetings of the Board and committees on which he or she served during 2017
ü
Executive sessions of independent directors at each regular Board meeting
ü
Stock ownership requirements for directors
ü
Annual Board and committee self-assessment guided by Lead Independent Director
ü
Board oversight of corporate responsibility/ESG matters
ü
No poison pill
ü
Robust anti-hedging and anti-pledging policies

 

 
 
     
21
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
 
 
How our Board conducts its business
 
Our Board’s leadership structure
The Board’s leadership structure is designed to promote Board effectiveness and to appropriately allocate authority and responsibility between Board and management.
The Firm’s Corporate Governance Principles require the independent directors to appoint a Lead Independent Director if the role of the Chairman is combined with that of the CEO. Currently, our CEO serves as Chairman of the Board and a non-management director serves as the Board’s Lead Independent Director.
Our Board has determined that combining the roles of Chairman and CEO is, at this time, the most effective leadership structure for our Board. This determination took into consideration results of the Board’s most recent review of its leadership structure, feedback from
shareholders gathered through our engagement program, and the factors described below.
 
The Board believes the present structure provides the Firm and the Board with strong leadership, continuity of experience and appropriate independent oversight of management. A combined CEO and Chairman allows the Firm to communicate its business and strategy to shareholders, clients, investors, employees, regulators, and the public with a single voice.
Our Lead Independent Director further enhances the Board’s leadership structure and effectiveness by focusing on the Board’s processes and priorities, and facilitating independent oversight of management. The Lead Independent Director promotes open dialogue among the independent directors during Board meetings, at executive sessions without the presence of the CEO, and between Board meetings.
 
       
Respective duties and responsibilities of the Chairman and Lead Independent Director
 
The respective authority and responsibility of the Chairman of the Board and Lead independent Director
are as follows:
Chairman of the Board:
ü
calls Board and shareholder meetings
ü
presides at Board and shareholder meetings
ü
prepares board meeting schedules, agendas and materials, subject to the approval of the Lead Independent Director
Lead Independent Director:
ü
acts as liaison between independent directors and
the CEO
ü
presides over executive sessions of independent directors
ü
acts as a sounding board to the CEO
ü
engages and consults with major shareholders and other constituencies, where appropriate

 
ü
provides advice and guidance to the CEO on executing long-term strategy
ü
guides annual performance review of the CEO
ü
advises the CEO of the Board’s information needs
ü
guides the annual independent director consideration of CEO compensation
ü
meets one-on-one with the CEO at every regularly scheduled Board meeting
ü
guides full Board consideration of CEO succession
ü
has the authority to call for a Board meeting or a meeting of independent directors
ü
guides the self-assessment of the full Board
ü
approves agendas and adds agenda items for Board meetings and meetings of independent directors
ü
presides at Board meetings in the CEO’s absence or when the CEO or the Board raises a possible conflict of interest

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
22


 
Factors the Board considers in reviewing its leadership structure
The Board reviews its leadership structure not less than annually as part of its self-assessment process. The most recent review was conducted in March 2018. In reviewing its leadership structure, the Board considered the following factors:
   
The respective responsibilities for the positions of Chairman, Lead Independent Director, and CEO
   
The policies and practices in place to provide independent Board oversight of management (including Board oversight of CEO performance and compensation; regularly held executive sessions of the independent directors; Board input into agendas and meeting materials; and Board self-assessment)
   
The people currently in the roles of Chairman, Lead Independent Director, and CEO
   
The Firm’s circumstances, including its firm-wide performance
   
The potential impact of particular leadership structures on the Firm’s performance
   
The Firm’s ability to attract and retain qualified individuals for Firm and Board leadership positions
   
The views of our shareholders
   
Trends in corporate governance, including practices at other public companies, and studies on the impact of leadership structures on shareholder value
   
Such other factors as the Board determined
Following the review, the independent directors elected Mr. Raymond to continue to serve as Lead independent Director.
The Board believes it is important to retain flexibility to determine its leadership structure based on the particular composition of the Board, the individuals serving in leadership positions, and the needs and opportunities of the Firm as they change over time. The Board has separated the Chairman and CEO position in the past and may do so again in the future if it believes that doing so would be in the best interest of the Firm and its shareholders.

 
 
Board meetings
The Board conducts its business as a group and through a well-developed committee structure in adherence to our Corporate Governance Principles. The Board carries out its responsibilities under the leadership of the Lead Independent Director. The Board has established practices and processes to actively manage its information flow, set its board meeting agendas, and manage its time to actively engage with senior management and enable it to make sound, well-informed decisions.
The Board and each committee has the authority and resources to seek legal or other expert advice from sources independent of management.
In addition, Board members have direct access to management and regularly receive information and engage with management outside of formal Board meetings.
The full Board met nine times in 2017. In 2017, all of the members of our Board (other than Mr. Dimon) served on and/or chaired the principal standing committees and specific purpose committees of the Board. Ms. Hobson, who was elected to the Board in March 2018, will commence serving on Board committees following the annual meeting. For more information on committees, see below. Each director attended 75% or more of the total meetings of the Board and the committees on which he or she served in 2017.
The independent directors of the Board meet in executive session, without Mr. Dimon in attendance, each time the full Board convenes for a regularly scheduled in-person meeting. During 2017, Mr. Raymond presided at each executive session of the independent directors.
Committees of the Board
A significant portion of our Board’s oversight responsibilities is carried out through its five independent, principal standing committees. These five committees are the: Audit Committee, Compensation & Management Development Committee (“CMDC”), Corporate Governance & Nominating Committee (“Governance Committee”), Public Responsibility Committee, and Directors’ Risk Policy Committee (“DRPC”). Allocating responsibilities for oversight

 

 
 
     
23
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
among committees increases the amount of attention that can be devoted to the business and affairs of the Firm.
Committees meet regularly in conjunction with scheduled Board meetings and hold additional meetings as needed. Each committee receives reports from senior management and reports their actions to, and discusses their recommendations with, the full Board.
Each principal standing committee operates pursuant to a written charter. Principal standing committee charters are available on our website at jpmorganchase.com/committee-charters. Each charter is reviewed at least annually as part of the Board’s, and each respective committee’s, self-assessment process.
The Governance Committee annually appraises the allocation of responsibility among the committees as part of the Board and committee self-assessment process. For more information about the self-assessment process, see page xx.
Each committee has defined responsibilities for considering specific areas of business activities and risk, as outlined in its charter. Each committee engages with the Firm’s senior management responsible for the business activities and risk areas that are within the scope of responsibilities of the committee.
All committee chairs are appointed annually by our Board. Committee chairs are responsible for:
   
Calling meetings of their committees
   
Presiding at meetings of their committees
   
Approving agendas, adding agenda items, and reviewing materials for their committee meetings
   
Serving as a liaison between committee members and the Board, and between committee members and senior management, including the CEO
   
Working directly with the senior management responsible for committee mandates
The Board determined that each member of the Audit Committee in 2017 (James A. Bell, Crandall C. Bowles, Timothy P. Flynn and Laban P. Jackson, Jr.) is an audit committee financial expert in accordance with the definition established by the U.S. Securities and
 
Exchange Commission (“SEC”) and that Ms. Bammann, a member of the DRPC, has experience in identifying, assessing and managing risk exposures of large, complex financial firms in accordance with rules issued by the Board of Governors of the Federal Reserve System (“Federal Reserve”).
The Board has determined that Mr. Bell’s service on the audit committees of the three other public companies for which he is a director does not impair his ability to effectively serve on the Firm’s Audit Committee. The Board annually reviews this determination and most recently completed its annual review in September 2017.
Principal standing committees
The following highlights some of the key responsibilities of each principal standing committee.
 
   
Audit Committee
James A. Bell, Chair
18 meetings in 2017
Assists the Board in its oversight of:
   
The independent registered public accounting firm’s qualifications and independence
   
The performance of the internal audit function and the independent registered public accounting firm
   
Management’s responsibilities to assure that there is an effective system of controls reasonably designed to (i) safeguard the assets and income of the Firm; (ii) assure the integrity of the Firm’s financial statements; and (iii) maintain compliance with the Firm’s ethical standards, policies, plans and procedures, and with laws and regulations
 
   
Compensation & Management Development Committee
Lee R. Raymond, Chair
6 meetings in 2017
Assists the Board in its oversight of:
   
Development of, and succession planning for, key executives
   
Compensation principles and practices, including:

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
24


 
   
-
Review and approval of the Firm’s compensation and benefit programs
   
-
The competitiveness of these programs
   
-
The review of the relationship among risk, risk management, and compensation in light of the Firm’s objectives, including its safety and soundness and the avoidance of practices that would encourage excessive or unnecessary risk-taking
   
-
The Firm’s culture and conduct program
 
   
Corporate Governance & Nominating Committee
William C. Weldon, Chair
7 meetings in 2017
Exercises general oversight with respect to the governance of the Board, including:
   
The review and recommendation of proposed nominees for election to the Board
   
The evaluation and recommendation to the Board of corporate governance practices applicable to the Firm
   
The appraisal of the framework for assessing the Board’s performance and the Board’s self-evaluation
 
   
Public Responsibility Committee
Crandall C. Bowles, Chair*
5 meetings in 2017
* The chair of the committee for 2018 will be elected by the Board following the annual meeting.
Assists the Board in its oversight of the Firm’s positions and practices regarding public responsibility matters and other public policy issues that reflect the Firm’s values and character and impact the Firm’s reputation, including:
   
Community investment
   
Fair lending
   
Sustainability
   
Consumer practices, including consumer experience, consumer complaint resolution, and consumer issues
 
related to disclosures, fees or the introduction of major new products
 
   
Directors’ Risk Policy Committee
Linda B. Bammann, Chair
8 meetings in 2017
Assists the Board in its oversight of the Firm’s global risk management framework, approves the primary risk management policies of the Firm and oversees management’s responsibilities to assess and manage:
   
The Firm’s credit risk, market risk, principal risk, liquidity risk, country risk, and model risk
   
The governance frameworks or policies for risk identification, risk appetite, operational risk, reputation risk, compliance risk including fiduciary risk, and conduct risk
   
The Firm’s capital and liquidity planning and analysis
Other standing committees
The Board has two additional standing committees:
Stock Committee: The committee is responsible for implementing the declaration of dividends, authorizing the issuance of stock, administering the dividend reinvestment plan, and implementing share repurchase plans. The committee acts within Board-approved limitations and capital plans.
Executive Committee: The committee may exercise all the powers of the Board that lawfully may be delegated, but with the expectation that it would not take material actions absent special circumstances.
The Board may establish additional standing committees as needed.
Specific purpose committees
The Board establishes Specific Purpose Committees as appropriate to address specific issues. The Board currently has four such committees. They met a total of 37 times in 2017.
Three of the Specific Purpose Committees provide oversight in connection with certain regulatory orders (“Consent Orders”) issued by the Federal Reserve and the Office of the Comptroller of the Currency (“OCC”). These Specific Purpose Committees oversee particular

 

 
 
     
25
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
aspects of our control agenda and monitor progress under action plans developed by management to address the issues identified under the applicable Consent Order. The committees are:
   
BSA/AML (Bank Secrecy Act/Anti-Money Laundering) Compliance Committee
   
FX (Foreign Exchange)/Markets Orders Compliance Committee
   
Trading Compliance Committee
The Omnibus Committee is a Specific Purpose Committee established to review matters, as needed and delegated by the Board. During 2017, the Omnibus
 
Committee was responsible for overseeing the review of the Firm’s consumer sales practices.
As the Firm achieves its objectives in a specific area, the work of the relevant Specific Purpose Committee will be concluded and, subject to regulatory consent where applicable, the committee will be disbanded. In 2017, the work of the Specific Purpose Committee overseeing the Firm’s Sworn Documents compliance practices was completed and the committee was disbanded.
Additional Specific Purpose Committees may be established from time to time in the future to address particular issues.
The following chart summarizes the current Board committee memberships of our Directors:
 
                         
Current Board committee membership
Director
 
Audit
 
Compensation &
Management
Development
 
Corporate
Governance &
Nominating
 
Public
Responsibility
 
Directors’ Risk Policy
 
Specific Purpose Committees 1
Linda B. Bammann
 
 
 
 
 
 
 
 
 
Chair
 
D,E
James A. Bell
 
Chair
 
 
 
 
 
 
 
 
 
A
Crandall C. Bowles
 
Member
 
 
 
 
 
Chair 2
 
 
 
A
Stephen B. Burke
 
 
 
Member
 
Member
 
 
 
 
 
 
Todd A. Combs
 
 
 
 
 
 
 
Member
 
Member
 
 
James S. Crown
 
 
 
 
 
 
 
 
 
Member
 
 
James Dimon
 
 
 
 
 
 
 
 
 
 
 
 
Timothy P. Flynn
 
Member
 
 
 
 
 
Member
 
 
 
A, E
Laban P. Jackson, Jr.
 
Member
 
 
 
 
 
 
 
 
 
A,B,C,D
Michael A. Neal
 
 
 
 
 
 
 
 
 
Member
 
D
Lee R. Raymond 3
 
 
 
Chair
 
Member
 
 
 
 
 
B,C,D
William C. Weldon
 
 
 
Member
 
Chair
 
 
 
 
 
B,C,E
   
1 
The Board’s Specific Purpose Committees in 2017 were:
A – BSA/AML(Bank Secrecy Act/Anti-Money Laundering) Compliance Committee
B – FX (Foreign Exchange)/Markets Orders Compliance Committee
C – Trading Compliance Committee
D – Omnibus Committee
E - Sworn Documents Compliance Committee (the committee was disbanded in September 2017)
   
2 
Ms. Bowles is not standing for re-election when her term expires on the eve of this year’s annual meeting. A new Chair of the committee will be elected by the Board following the annual meeting.
   
3 
Lead Independent Director
Ms. Hobson, who was elected to the Board in March 2018, will commence serving on Board committees following the annual meeting. All of the directors of the Firm, other than Ms. Hobson, were elected as directors in 2017 of JPMorgan Chase Bank, National Association (the “Bank”), Chase Bank USA, National Association, and JPMorgan Chase Holdings LLC. Ms. Hobson was elected to the boards of these subsidiaries in March 2018. Mr. Weldon is the non-management Chairman of the Board of the Bank and of Chase Bank USA, National Association; JPMorgan Chase Holdings LLC does not have a Chairman of the Board.

 

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
26


 
Board self-assessment
The Board conducts an annual self-assessment aimed at enhancing its effectiveness. Through regular assessment of its policies, procedures and performance, the Board identifies areas for further consideration and improvement. In assessing itself, the Board takes a multi-year perspective.
Each of the principal standing committees also conducts an annual self-assessment.
Each director participates in the self-assessment and provides feedback in multiple discussions on a range of issues. In 2017, discussion topics included:
   
Strategic priorities
   
Board structure
   
How the Board spends its time
   
Oversight and interaction with management
   
Culture and conduct
   
Committee effectiveness
The Board self-assessment is led by the Lead Independent Director. The self-assessment is conducted in two phases. First, the Board examines its performance against its obligations, such as regulatory requirements including its responsibilities under the OCC’s “Heightened Standards” for large national banks.  The second phase of the self-assessment, which is overseen by the Governance Committee, is initiated by the distribution to each director of a discussion guide that is intended to provide a framework for the self-assessment. The Firm’s General Counsel assists with the self-assessment by speaking with each director in private one-on-one conversations and with each standing committee, and then reporting to the Lead Independent Director and the Board. The Board develops appropriate action plans that are reviewed by the Board throughout the year and considered in the self-assessment conducted in the following year.
Committee self-assessments include a review of performance against their respective committee charter requirements and focus on committee agenda planning and the flow of information received from management.

 

 
 
Director education
An ongoing director education program assists Board members in fulfilling their responsibilities. The program provides training on the Firm’s products, services, and lines of business; the risks that have a significant impact on the Firm; laws, regulations and supervisory requirements applicable to the Firm; and other topics identified by the Board of Directors.
Training commences with an orientation program when a new director joins the Board. Ongoing education is provided through written materials, presentations in Board meetings, and training outside the boardroom, including events intended to give directors client and other perspectives that can have a significant impact on the Firm.

 

 
 
     
27
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
 
 
Board oversight of the business and affairs of the Firm
 
The Board is responsible for oversight of the business and affairs of the Firm on behalf of the Firm’s shareholders. Among its core responsibilities, the Board:
   
Reviews the strategic priorities of the Firm
   
Evaluates CEO performance and assesses whether the Firm has the proper management talent to pursue its strategic priorities
   
Reviews the Firm’s financial performance and record of delivery of long-term value to our shareholders, and oversees the Firm's financial statements and the performance of the Firm's independent registered public accounting firm
   
Oversees the culture and conduct program that sets forth the Firm’s expectations that employees will act with integrity at all times
   
Oversees the Firm’s risk management and internal control frameworks that are intended to help ensure the Firm’s risks are being managed in an appropriate manner
Strategic oversight
The Firm’s Board of Directors actively engages with senior management with respect to the formulation and implementation of the Firm’s strategic initiatives. Each year’s strategic plans include evaluating performance against the prior year’s initiatives, assessing the current operating environment, refining existing strategies, and developing new strategic initiatives. Presentations by senior management regarding the strategic opportunities, priorities, and implementation strategies for their respective lines of business, and by the CEO and CFO on the Firm’s overall strategic direction, are provided throughout the year. These management presentations and financial plans serve as the basis for active dialogue with, and feedback from, the Board about the strategic risks and opportunities facing the Firm and its businesses.
CEO performance and executive talent management
The CMDC reviews the CEO’s performance periodically during the course of the year, and formally, at least annually. The CMDC’s review is presented to the Board, generally in January, in connection with the Board’s review of executive officer annual compensation. The
 
Board evaluation is conducted by the non-management directors, guided by the Lead Independent Director.
Succession planning for the CEO and other members of the Operating Committee is considered at least annually. The CMDC also discusses at least annually the talent pipeline for specific critical roles. The Board makes sure it has numerous opportunities to meet with, and assess development plans for, members of the Operating Committee and other high potential senior management leaders. This occurs through various means, including informal meetings, Board dinners, and presentations to the Board and its committees. For further information, see Compensation Discussion and Analysis on page xx.
Oversight of financial performance
Throughout the year, the Board reviews the Firm’s financial performance, including overseeing management’s execution against the Firm’s capital, liquidity, strategic, and financial operating plans.
Reports on the Firm’s financial performance are presented at each regularly scheduled Board meeting throughout the year. The Firm’s annual Comprehensive Capital Analysis and Review (CCAR) submission, which contains the Firm’s proposed plans regarding dividend payouts, stock repurchases and other capital actions, is reviewed and approved prior to its submission to the Federal Reserve. In addition, the Audit Committee of the Board assists the Board in the oversight of the Firm’s financial statements and internal control framework. The Audit Committee also assists the BOard in the appointment, compensation, retention, and overview of the Firm's independent registered public accounting firm. For further information, see “Risk oversight” below.
Culture and conduct oversight
The Firm strives for continuous improvement in the way it conducts its business. These efforts are aligned under our Firm’s “How We Do Business Framework” and include initiatives to enhance controls and employee training, development and talent retention.
Corporate standards are clearly articulated so they may be understood by every person at the Firm. To this end, the Firm has documented a set of 20 core Business

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
28


 
Principles and a Code of Conduct (“Code”). The Business Principles set forth four central corporate tenets for the Firm: exceptional client service; operational excellence; a commitment to integrity, fairness and responsibility; and a great team and winning culture.
The Code provides the principles that govern employee conduct with clients and customers, shareholders and one another, as well as with the markets and communities in which the Firm does business. All employees are required to complete Code training and annually reaffirm their compliance with the Code. Each member of the Board also annually affirms his or her compliance with the Code. For further information, see “Code of Conduct” under “Other Corporate Governance Policies and Practices” at page xx-xx.
The 20 Business Principles and Code of Conduct form the basis of the Firm’s Culture and Conduct Program (“Program”). The Program’s focus is on maintaining a strong corporate culture that instills and enhances a sense of personal accountability. Initiatives related to employee conduct and culture are broader than the Program. For additional information see “IV. Investing in our people” in the CD&A at page xx.
The Program is overseen by a senior management Culture and Conduct Risk Committee, headed by the Chief Culture and Conduct Officer who reports to the Chief Control Officer. This committee is responsible for capturing and analyzing conduct-related metrics, including customer complaints, workforce feedback, and employee conduct and compliance.
The CMDC provides oversight of the governance framework of the Program and the DRPC reviews reports of operational, compliance, and reputational matters (including sexual harassment matters) identified by the Program. In addition, the full Board receives a status presentation of the Program annually.
Risk oversight
Risk is an inherent part of JPMorgan Chase’s business activities. When the Firm extends a consumer or wholesale loan, advises customers on their investment decisions, makes markets in securities, or offers its products and services, the Firm takes on some degree of risk. The Firm’s overall objective is to manage its businesses, and the associated risks, in a manner that
 
balances serving the interests of its clients, customers, and investors and protects the safety and soundness of the Firm.
The key risk areas of the Firm are managed on an enterprise wide basis.
The Firm has an Independent Risk Management (“IRM”) function, which consists of the Risk Management and Compliance organizations. The CEO appoints, subject to DRPC approval, the Firm’s Chief Risk Officer to lead the IRM organization and manage the risk governance framework of the Firm. The risk governance framework is subject to approval by the DRPC in the form of the primary risk management policies.
Certain risks, such as strategic risk, are overseen by the full Board. Board committees support the Board’s oversight responsibility by overseeing the risk categories related to such committee’s specific area of focus. Each committee oversees reputation and conduct risk issues within its scope of responsibility. Risk issues that overlap committee responsibilities are reported to each committee overseeing such risk; when appropriate, relevant Board committees hold joint meetings.
Committee chairs report significant matters discussed at committee meetings to the full Board. Issues escalated to the full Board may be dealt with in several ways, as appropriate: oversight of the risk issue may remain with the particular principal standing committee of the Board; the Board may establish a Specific Purpose Committee to oversee management’s addressing of such risk matters; or the Board may ask management to present more frequently to the full Board on such issue.
In addition, in order that risks are properly monitored, reported, escalated and overseen, the Firm has established protocols for the timely communication of matters of significance to the Board, including protocols for matters that are time sensitive and significant that may arise during periods between formal meetings of the Board.

 

 
 
     
29
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
Board oversight of the key risks arising from the businesses and activities of the Firm are coordinated among Board committees generally as follows:
 
                   
 
 

 

 
BOARD OF DIRECTORS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Audit
CMDC
DRPC
Public Responsibility
Governance
 
 
 
 
 
Oversees:
Oversees:
Oversees:
Oversees:
Oversees:
Internal control framework
Review and approval of compensation philosophy and practices
Global risk management framework
Community investing and fair lending practices
 
Governance risk including board composition and governance practices
Integrity of financial statements
Compensation programs
Approval of primary risk policies and risk appetite statement
Political engagement, including lobbying expenses and political contributions
 
 
 
Legal risk
Operating Committee performance assessments and compensation

 
Market risk
Sustainability
 
 
Global compliance program

 
Culture and conduct framework
Credit risk
Consumer practices, including consumer experience, consumer complaint resolution, and consumer issues related to disclosures, fees or the introduction of major new products
 
 
Technology and cybersecurity risk

 
 
 
Country risk
 
 
 
 
 
Investment portfolio risk
 
 
 
 
 
 
Liquidity risk
 
 
 
 
 
 
Estimations and Model risk
 
 
 
 
 
 
Framework for operational risk, reputation risk, and compliance risk including fiduciary and conduct risk
 
 

 
For more information about committee responsibilities, see “Committees of the Board” at page xx-xx.
For more information about the Firm’s risk management, see the “Enterprise-wide risk management” section of the Firm’s Annual Report on Form 10-K for the year ended December 31, 2017.

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
30


 
 
 
Active Board engagement with the Firm’s stakeholders
 
Active engagement
The Board, as a group or as a subset of one or more directors, meets periodically throughout the year with the Firm’s shareholders, employees and regulators, and with non-governmental organizations, and other persons interested in our strategy, business practices, governance, culture and conduct, and performance. For more information, see the CD&A at pages xx-xx.
Engagement and transparency with our stakeholders help our Firm gain useful feedback. Information garnered from these meetings is shared regularly with the Firm’s Board of Directors and senior management.
Feedback from our stakeholders also helps us provide information to our shareholders and other interested parties that better addresses their inquiries and improves our governance processes.
Stakeholders, including shareholders and interested parties who wish to contact our Board of Directors, any Board member, including the Lead Independent Director, any committee chair, or the independent directors as a group, may mail their correspondence to: JPMorgan Chase & Co., Attention (name of Board member(s)), Office of the Secretary, 270 Park Avenue, New York, NY 10017, or e-mail the Office of the Secretary at corporate.secretary@jpmchase.com.
Engagement with shareholders
We have an active and ongoing approach to engagement on a wide variety of topics (e.g., strategy, performance, competitive environment) throughout the year. We receive feedback from our shareholders and other interested parties, including:
   
Institutional shareholders
   
Retail shareholders
   
Fixed-income investors
   
Proxy advisory firms
   
ESG rating firms
   
Industry thought leaders
These interactions and communications take a variety of forms. They include our annual Investor Day, quarterly earnings calls, and presentations at investor conferences, as well as our annual shareholder
 
meeting. They also include information provided in our SEC filings, including the Annual Report and proxy statement, and in press releases, information on our website, and in our annual Environmental, Social and Governance (“ESG”) and Corporate Responsibility Reports.
In 2017:
   
Senior management hosted more than 50 investor meetings and presented at 12 investor conferences.
   
Members of senior management made trips to major cities throughout the U.S. and Canada, as well as international trips to Asia and Europe, during which they met in person with shareholders and other interested parties.
   
At the annual Investor Day, senior management reviewed the Firm’s strategy and financial performance.
   
Our CEO and Lead Independent Director presented to shareholders at the Firm’s 2017 annual meeting and are expected to do so again at this year's annual meeting.
We also conduct a formal shareholder engagement program twice a year. This program covers a wide array of topics with a broad group of shareholders. Our Lead Independent Director participates in certain discussions with our larger shareholders.
Our shareholder outreach efforts in 2017 included hosting more than 80 discussions, covering shareholders representing in the aggregate over 45% of our outstanding common stock. Topics included:
   
Firm strategy and performance
   
Executive compensation
   
Board composition
   
Management and Board succession planning
   
Environmental, social and governance matters
   
Shareholder rights
   
Risk management
   
Culture and conduct
   
Public disclosures, including proxy format and content

 

 
 
     
31
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
In addition, as part of our engagement discussions with shareholders this year, we requested feedback about our By-Law provision regarding shareholders’ rights to call a special meeting. We heard a variety of views, including concerns some had about shareholder rights to call a special meeting without adequate procedural safeguards, including the appropriate threshold of shareholders needed to request such a meeting. In light of the continued interest in this issue, and in lieu of a shareholder proposal seeking to reduce the current threshold, the Board has included in this proxy statement a management proposal requesting that the Firm’s shareholders ratify the current special meeting provisions in our By-Laws which grant shareholders who own at least 20% of the Firm’s shares the right to call a special meeting. The results of this vote will be taken into account in the Board’s ongoing consideration of its corporate governance practices. See Proposal 2, “Ratification of special meeting provisions in the Firm’s By-Laws”, at page xx-xx.
Engagement with employees
Our Board is committed to maintaining a strong corporate culture that instills and enhances a sense of personal accountability on the part of all of the Firm’s employees.
In addition to discussions at Board meetings with senior management about these efforts, our directors participate in meetings with employees to emphasize this commitment. These meetings include employee town halls, lines of business and leadership team events, annual senior leaders’ meetings, and informal sessions with members of the Operating Committee and other senior leaders.
Engagement with regulators
Our Board and senior leaders commit significant time meeting with regulators from the U.S. and from other countries. Frequent interaction helps us learn first-hand from regulators, including their expectations on effective Board oversight. It also gives the Board and management a forum for keeping our regulators well-informed about the Firm’s performance and business practices.

 
 
Engagement with non-governmental organizations
We engage with numerous non-governmental organizations on a diverse range of issues that are important to communities and consumers about our business. For example, through the Chase Advisory Panel program, senior executives engage with national consumer policy groups to discuss issues related to the Firm’s products, policies, customer-facing practices, communications and public policy issues. We also engage with organizations on environmental and social issues and maintain philanthropic partnerships with a broad range of groups that work on issues that are important to our Firm. Management shares feedback from these engagements with the Board, providing it with valuable insight to the issues that matter to these stakeholders, and helps us understand how the Firm’s products and services can better serve our stakeholders and the communities in which we operate.

 

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
32


 
 
 
Other corporate governance policies and practices
 
Shareholder rights
The Firm’s Certificate of Incorporation and By-Laws provide shareholders with important rights, including:
   
Proxy access, which enables eligible shareholders to include their nominees for election as directors in the Firm’s proxy statement. For further information, see page xx-xx, “Shareholder proposals and nominations for the 2019 annual meeting.”
   
The ability to call a special meeting by shareholders holding at least 20% of the outstanding shares of our common stock (net of hedges). For further information, see Proposal 2, “Ratification of special meeting provisions in the Firm’s By-Laws” at page xx.
   
The ability of shareholders holding at least 20% of the outstanding shares of our common stock (net of hedges) to act by written consent on terms substantially similar to the terms applicable to call special meetings.
   
Majority election of directors
   
No “poison pill” in effect
   
No supra-majority vote requirements in our Certificate of Incorporation or By-Laws
The Firm’s Certificate of Incorporation and By-Laws are available on our website at jpmorganchase.com/governance.
Policies and procedures for approval of related party transactions
The Firm has adopted a written Transactions with Related Persons Policy (“Policy”), which sets forth the Firm’s policies and procedures for reviewing and approving transactions with related persons – basically our directors, executive officers, their respective immediate family members, and 5% shareholders. The transactions covered by the Policy include any financial transaction, arrangement or relationship in which the Firm is a participant, the related person has or will have a direct or indirect material interest, and the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year.
 
After becoming aware of any transaction which may be subject to the Policy, the related person is required to report all relevant facts with respect to the transaction to the General Counsel of the Firm. Upon determination by the General Counsel that a transaction requires review under the Policy, the material facts respecting the transaction and the related person’s interest in the transaction are provided to the Governance Committee. The transaction is then reviewed by the disinterested members of the Governance Committee, which then determines whether approval or ratification of the transaction shall be granted. In reviewing a transaction, the Governance Committee considers facts and circumstances that it deems relevant to its determination, such as: management’s assessment of the commercial reasonableness of the transaction; the materiality of the related person’s direct or indirect interest in the transaction; whether the transaction may involve an actual, or the appearance of, a conflict of interest; and, if the transaction involves a director, the impact of the transaction on the director’s independence.
Certain types of transactions are pre-approved in accordance with the terms of the Policy. These include transactions in the ordinary course of business involving financial products and services provided by, or to, the Firm, including loans, provided such transactions are in compliance with the Sarbanes-Oxley Act of 2002, Federal Reserve Board Regulation O and other applicable laws and regulations.
Transactions with directors, executive officers and 5% shareholders
Our directors and executive officers, and some of their immediate family members and affiliated entities, and BlackRock and Vanguard, beneficial owners of more than 5% of our outstanding common stock, were customers of, or had transactions with, JPMorgan Chase or our banking or other subsidiaries in the ordinary course of business during 2017. Additional transactions may be expected to take place in the future.
Any outstanding loans to the foregoing persons and entities and any other transactions involving the Firm’s financial products and services (such as banking,

 

 
 
     
33
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
brokerage, investment, investment banking, and financial advisory products and services) provided to such persons and entities: (i) were made in the ordinary course of business, (ii) were made on substantially the same terms (including interest rates and collateral (where applicable)), as those prevailing at the time for comparable transactions with persons and entities not related to the Firm, and (iii) did not involve more than the normal risk of collectibility or present other unfavorable features.
The fiduciary committees for the JPMorgan Chase Retirement Plan and for the JPMorgan Chase 401(k) Savings Plan (each, a “Plan”) entered into agreements with BlackRock giving it discretionary authority to manage certain assets on behalf of each Plan. Pursuant to these agreements, fees of approximately $4.6 million were paid by the Plans to BlackRock in 2017. Subsidiaries of the Firm have subscribed to information services provided by BlackRock, including select market data, analytics and modeling, and paid BlackRock approximately $1 million in 2017 for the services. JPMorgan Chase paid Blackrock approximately $4.4 million in 2017 to access its Aladdin® platform.
Certain J.P. Morgan mutual funds and subsidiaries entered into a sub-transfer agency agreement with Vanguard and paid Vanguard approximately $550,000 in 2017 for services rendered, primarily accounting, recordkeeping and administrative services.
John Donnelly, who is currently a Vice Chairman and was an executive officer of the Firm in 2017, has a son who is currently employed by the Firm and who is provided compensation and benefits in accordance with the Firm’s employment and compensation practices applicable to employees holding comparable positions. Mr. Donnelly’s son has been employed by the Firm since 2010, currently as an associate in the Corporate & Investment Bank, and for 2017, received compensation of $245,000, including annual salary and incentive awards. This family member does not share a household with Mr. Donnelly.
Compensation & Management Development Committee interlocks and insider participation
The members of the CMDC are listed on page [xx] of this proxy statement. No member of the CMDC is or ever was a JPMorgan Chase officer or employee. No
 
JPMorgan Chase executive officer is, or was during 2017, a member of the board of directors or compensation committee (or other committee serving an equivalent function) of another company that has, or had during 2017, an executive officer serving as a member of our Board or the CMDC. All of the members of the CMDC, and/or some of their immediate family members and affiliated entities, were customers of, or had transactions with, JPMorgan Chase or our banking or other subsidiaries in the ordinary course of business during 2017. Additional transactions may be expected to take place in the future. Any outstanding loans to the directors serving on the CMDC and their immediate family members and affiliated entities, and any transactions involving other financial products and services provided by the Firm to such persons and entities were made in accordance with the standards stated above for transactions with directors, executive officers and 5% shareholders.

 
Political activities and lobbying
JPMorgan Chase believes that responsible corporate citizenship demands a commitment to a healthy and informed democracy through civic and community involvement. In furtherance of this, the Firm is regularly involved in legislative activities across a spectrum of policy areas that could significantly affect our operations and results. The Firm’s policies and practices related to political activities:
   
Prohibit contributions of corporate funds to candidates, political party committees and political action committees
   
Provide that our Firm inform the U.S. trade organizations of which it is a member not to use any payments made by the Firm to these organizations, including membership fees and dues, for any election-related activity
   
Prohibit corporate funds from being used to make contributions to broad-based groups organized under Section 527 of the Internal Revenue Code
   
Restrict corporate contributions to groups organized under Section 501(c)(4) of the Internal Revenue Code for election-related activity
   
Prohibit the use of corporate funds to make independent political expenditures, including electioneering communications

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
34


 
The Firm discloses on its website, at jpmorganchase.com/politicalactivities, contributions made by the Firm’s Political Action Committees (PACs) and contributions of corporate funds to ballot committees and groups organized under Section 501(c)(4) of the Internal Revenue Code for public policy matters.
For further information regarding the Firm’s policy engagement and political participation activities, see our website at jpmorganchase.com/policy-engagement.
Code of Conduct
Employees are required to speak up about misconduct and report suspected or known Code of Conduct (“Code”) violations. (For additional information on the Code, see “Culture and conduct oversight” at page xx.) We also provide guidelines to employees in our Human Resources, Global Security & Investigations and Legal departments regarding the review and treatment of employee-initiated complaints, including the proper escalation of suspected or known violations of the Code, other Firm policy, or the law. The Code prohibits retaliation against anyone who raises an issue or concern in good faith.
Employees can report any known or suspected violations of the Code in person or via the Code Reporting Hotline by phone or the internet. The Hotline is anonymous, except in certain non-U.S. jurisdictions where laws prohibit anonymous reporting, and is available 24/7 globally, with translation services. It is maintained by an outside service provider.
Suspected violations of the Code, other Firm policy or the law are investigated by the Firm and may result in an employee being cleared of the suspected violation or in an escalating range of actions, including termination of employment, depending upon the facts and circumstances. Compliance and Human Resources report annually to the Audit Committee on the Code of Conduct program and provide an update on the employee completion rate for Code of conduct training and affirmation.
Code of Ethics for Finance Professionals
The Code of Ethics for Finance Professionals applies to the CEO, CFO, Controller and all other professionals of the Firm worldwide serving in a finance, accounting, line of business treasury, tax or investor relations role.
 
The purpose of our Code of Ethics is to promote honest and ethical conduct and compliance with the law in connection with the maintenance of the Firm’s financial books and records and the preparation of our financial statements.
Supplier Code of Conduct
Suppliers are expected to have high standards of business conduct, integrity and adherence to the law. The Supplier Code of Conduct applies to our suppliers, vendors, consultants, contractors and other third parties working on behalf of the Firm, as well as to the owners, officers, directors, employees and contractors of these supplier organizations and entities. The Supplier Code of Conduct communicates our expectations on a range of issues, including the Firm’s Business Principles and our suppliers’ responsibility to comply with laws and regulations and operate responsibly with respect to environmental, social and human rights matters.
Section 16(a) beneficial ownership reporting compliance
Our directors and certain senior officers filed reports with the SEC indicating the number of shares of any class of our equity securities they owned when they became a director or executive officer and, after that, any changes in their ownership of our equity securities. They must also provide us with copies of these reports. These reports are required by Section 16(a) of the Securities Exchange Act of 1934. We have reviewed the copies of the reports that we have received and written representations from the individuals required to file the reports. Based on this review, we believe that during 2017, each of our directors and executive officers filed reports required under Section 16(a) on a timely basis.

 

 
 
     
35
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT

 


 
 
 
Director compensation
 
The Governance Committee is responsible for reviewing director compensation and making recommendations to the Board. In making its recommendations, the Governance Committee annually reviews the Board’s responsibilities and the compensation practices of peer firms, which includes the same group of peer firms referenced for NEO compensation comparison. For more information see “Evaluating market practices” on page xx of this proxy statement.
The Board believes it is desirable that a significant portion of director compensation be linked to the Firm’s performance and is therefore paid in common stock.
Annual compensation
For 2017, each non-management director received an annual cash retainer of $100,000 and an annual grant, made when annual employee incentive compensation was paid, of deferred stock units valued at $250,000 on the date of grant. Additional cash compensation was paid for certain committees and other services as described below.
Each deferred stock unit included in the annual grant to directors represents the right to receive one share of the Firm’s common stock and dividend equivalents payable in deferred stock units for any dividends paid. Deferred stock units have no voting rights. In January of the year immediately following a director’s termination of service, deferred stock units are distributed in shares of the Firm’s common stock in either a lump sum or in annual installments for up to 15 years as elected by the director.
 
The following table summarizes the 2017 annual compensation for non-management directors for service on the Boards of the Firm and of JPMorgan Chase Bank, National Association (“Bank”). There is no additional compensation paid for service on the Board of Chase Bank USA, National Association or JPMorgan Chase Holdings LLC.
 
       
Compensation
Amount ($)
Board retainer
$
100,000
 
Lead Independent Director retainer
30,000
 
Audit and Risk Committee chair retainer
25,000
 
Audit and Risk Committee member retainer
15,000
 
All other committees chair retainer
15,000
 
Deferred stock unit grant
250,000
 
Bank board retainer
15,000
 
Bank board chair retainer
25,000
 
The Board may periodically ask directors to serve on one or more Specific Purpose Committees or other committees that are not one of the Board’s principal standing committees or to serve on the board of directors of a subsidiary of the Firm. Any compensation for such service is included in the “2017 Director compensation table” below. See Proposal 4, "Approval of Amended and Restated Long-Term Incentive Plan effective May 15, 2018" on page xx for information relating to our non-management director compensation program and proposed changes to it.

 

 
 
     
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT
 
36


 
2017 Director compensation table
The following table shows the compensation for each non-management director in 2017. The Board has determined that the earliest it would consider an increase in director compensation is 2020.
 
                                           
Director
 
Fees earned or paid in cash ($)1
2017 Stock award ($)2
Other fees earned or paid in cash ($)3
Total ($)
Linda B. Bammann
 
$
134,583

 
 
 
 
$
250,000

 
 
 
$
17,500

 
 
 
$
402,083

 
 
James A. Bell
 
134,583
 
 
 
 
250,000
 
 
 
45,000
 
 
 
429,583
 
 
Crandall C. Bowles
 
130,000
 
 
 
 
250,000
 
 
 
42,500
 
 
 
422,500
 
 
Stephen B. Burke
 
100,000
 
 
 
 
250,000
 
 
 
15,000
 
 
 
365,000
 
 
Todd A. Combs
 
111,750
 
 
 
 
250,000
 
 
 
15,000
 
 
 
376,750
 
 
James S. Crown
 
120,417
 
 
 
 
250,000
 
 
 
15,000
 
 
 
385,417
 
 
Timothy P. Flynn
 
115,000
 
 
 
 
250,000
 
 
 
30,000
 
 
 
395,000
 
 
Laban P. Jackson, Jr.
 
120,417
 
 
 
 
250,000
 
 
 
187,500
 
 
 
557,917
 
 
Michael A. Neal
 
115,000
 
 
 
 
250,000
 
 
 
15,000
 
 
 
380,000
 
 
Lee R. Raymond
 
145,000
 
 
 
 
250,000
 
 
 
42,500
 
 
 
437,500
 
 
William C. Weldon
 
115,000
 
 
 
 
250,000
 
 
 
77,500
 
 
 
442,500
 
 
   
1 
Includes fees earned, whether paid in cash or deferred, for service on the Board of Directors. For additional information on each Director’s service on committees of JPMorgan Chase, see “Committees of the Board” at page xx-xx of this proxy statement.
   
2 
On January 17, 2017, each director received an annual stock award in an amount of deferred stock units equal to $250,000, based on a grant date fair market value of the Firm’s common stock of $84.25 per share. The aggregate number of option awards and stock awards outstanding at December 31, 2017, for each current director is included in the “Security ownership of directors and executive officers” table on page xx of this proxy statement under the columns “Options/SARs/Warrants exercisable within 60 days” and “Additional underlying stock units,” respectively. All such awards are vested.
   
3 
Includes fees paid to the non-management directors for their service on the Board of Directors of the Bank or who are members of one or more Specific Purpose Committees. A fee of $2,500 is paid for each Specific Purpose Committee meeting attended (with the exception of the Omnibus Committee). Also includes for Mr. Jackson, $110,000 in compensation during 2017 in consideration of his service as a director of J.P. Morgan Securities plc, one of the Firm’s principal operating subsidiaries in the United Kingdom and a subsidiary of the Bank.

 

 
 
     
37
 
JPMORGAN CHASE & CO.    2018 PROXY STATEMENT