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  • Doug Chia

Notes from the JPMorgan Chase 2020 (Virtual) Annual Meeting

Updated: Jun 17, 2020

I attended this morning's JPMorgan Chase & Co. Annual Meeting of Shareholders. It was the first time JPMorgan held its annual meeting by remote participation only. The company had already decided to make the move before the Proxy Statement (filed on April 6) was printed. The Notice at the front of the Proxy Statement told shareholders:

In light of the coronavirus, or COVID-19, outbreak, for the safety of all of our people, including our shareholders, and taking into account recent federal, state and local guidance that has been issued, we have determined that the 2020 Annual Meeting will be held in a virtual meeting format only, via the Internet, with no physical in-person meeting.

Good Annual Meeting Instructions in Q&A Format

The company also included very good disclosures on how shareholders would "be able to attend, vote, examine the stockholders list, and submit questions (both before, and for a portion of, the meeting) from any location via the Internet." These disclosures were presented in Q&A format, which a lot of retail investors like. For companies that favor the Q&A format for proxy disclosures, the "Information about the shareholder meeting" section beginning on page 106 of JPMorgan's 2020 Proxy Statement is a nice model.

The Proceedings

I was able to enter the meeting site with the 16-digit control number from my VIF. The landing page was typical of what I've seen with a prominent "Vote Here!" button and the annual meeting materials posted. I was able to vote very easily and submit a question in the question box (more on that later).

The meeting started promptly at 10:00 a.m. EDT with five minutes of housekeeping announcements from the Secretary followed by a 15-minute introduction and business presentation by Chairman/CEO Jamie Dimon. Dimon reported that he is in good health. You'll recall that he underwent emergency heart surgery at the beginning of March, and the board asked Co-Presidents/Chief Operating Officers Gordon Smith and Daniel Pinto to lead the company for a period of time while Dimon recuperated.

The quality of the audio was mixed. Dimon was harder to hear than the others who spoke. This may have been due to the audio equipment on his end, as well as the fact that Dimon speaks at New York City speed. It was clear that he was reading directly from a script, so maybe they could have recorded it (and slowed it down) ahead of time like some companies do with the opening remarks for their quarterly earnings calls. It's something for companies to consider, even though I've heard that some investors frown at this.

Discussion on the items of business began at 10:20. The Secretary presented the director nominations, ratification of auditor appointment, and say on pay, and then went through the six shareholder proposals.

Shareholder Proposals

Each proponent was allotted three minutes to present, but none of them needed the full three. A few noteworthy points:

John Chevedden was on the line and presented two of the proposals. Chevedden has long been a controversial figure in the corporate governance community, in part because he often represents and acts as agent for multiple shareholder proponents at the same company. I won't get into that here since there's a lot of history, with zealous supporters and detractors alike, and it gets very technical. But, I will point out that he spoke at length against retired Exxon Mobil Chairman/CEO Lee Raymond serving as the Lead Independent Director of JPMorgan's board. The company disclosed on April 30 that its Corporate Governance & Nominating Committee "undertook a formal process to appoint a new Lead Independent Director" and planned to announce that appointment "by the end of summer 2020," and it was reported that this was in response to shareholder pressure, so it felt like there was a disconnect in Chevedden's statement. Chevedden didn't mention this new development, and the company didn't point that out after he was done with his statement. Just thought that was interesting.

One of the proponents, Arjuna Capital, submitted a pre-recorded statement, which the company played in lieu of having the proponent or a representative on the line to present the proposal at the meeting in real-time.

After the proponents presented their proposals, two other speakers, Boston Trust Walden and Whistle Stop Capital, were given time to make additional supporting statements on some of the proposals. (I believe they were co-filers, or consultants to the co-filers, of one or more of the proposals.) This appeared to have been arranged with the company ahead of time.

Q&A on Items of Business and Preliminary Voting Results

There was a Q&A session for questions related to the items of business submitted before and at the meeting that lasted for eight minutes, during which the head of Investor Relations read the questions and Dimon and the Secretary answered them. The polls were then closed, and the preliminary voting results were announced (apologies if my numbers are off +/- a point):

Director Nominees: All received at least 84.6% support.

Say On Pay: 92.2% support

Ratification of Auditor Appointment: 95.9% support

Shareholder Proposals:

  • Independent Board Chairman: 41.9% support

  • Report on Oil and Gas Company and Project Financing Related to the Arctic and the Canadian Oil Sands: 15.2% support

  • Climate Change Risk Reporting: 49.6% support

  • Amend Shareholder Written Consent Provisions: 11.0% support

  • Charitable Contributions Disclosure: 2.6% support

  • Report on Global Median Gender/Racial Pay Equity: 9.9% support

The formal part of the meeting was then adjourned.

General Q&A

The general Q&A started at 11:00 and lasted about 10 minutes. There was a whole variety of questions read by the head of IR and answered by him, Dimon, and the Secretary. The head of IR combined a few of the questions that were substantially similar. Once he and the Secretary determined that there were no more questions submitted in advance or during the meeting to answer, the entire event concluded at 11:11 a.m.

However... I had actually submitted a question via the question box at the beginning of the webcast asking whether all of the director nominees were in attendance (remotely) at today's meeting. I was kind of puzzled that they didn't read and answer it. Did it fall through the cracks? It was clear from the webcast that they were making every effort to scrape the barrel and find all of the questions that came in. I lobbed an email into the Secretary's office right after, and they got back to me quickly to let me know that they thought the answer to my question was implied in the opening remarks related to the election of directors and therefore was not necessary to repeat. You'll recall that I had a similar hiccup at another annual meeting. I recommend companies err on the side of reading and answering questions that come in, even if you think the answers to some of them were already talked about earlier, if only to preclude annoying shareholders like me from pestering you afterwards. :-)



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