JPMorgan chief executive Jamie Dimon will sell 1 million shares in the bank next year. This is the first time JPMorgan stake has been reduced by him since joining nearly two decades ago. At current market prices, the sale of JPMorgan stock would net Jamie Dimon more than $140mn, although he and his family would continue to own about 7.6mn shares. Including options, Jamie Dimon’s position in the group is worth $1.4bn.
JPMorgan stake reduced by Jamie Dimon
In a regulatory filing, JPMorgan said the stake sale was for “financial diversification and tax-planning purposes”, adding that “Dimon continues to believe the company’s prospects are very strong and his stake in the company will remain very significant”.
The JPMorgan stake sale will raise questions about how long Wall Street’s longest-serving chief executive intends to stay on in the role. Jamie Dimon’s rival at Morgan Stanley, James Gorman, announced this week that he would step down as CEO at the end of the year. JPMorgan used to highlight the fact that Dimon had “not sold a single share of JPMorgan Chase common stock”.
No specific reason for JPMorgan stock sale
A spokesperson for the bank said the JPMorgan stock sales had no connection to succession planning and that Dimon had “no plans to enter into another such sale but will of course consider his financial planning needs over time”.
Jamie Dimon, the 67-year-old banker, who is also chair of JPMorgan, joined the group in 2004 when it bought Bank One. At the end of 2005 he was made chief executive of JPMorgan, and a year later he added the roles of chair and president.
By retaining JPMorgan stock for the best part of two decades, Dimon has followed a tradition set by his former mentor at Citigroup, Sandy Weill, who instituted a “blood oath” among senior executives whereby they were forbidden from selling shares until they left.
Yet a Financial Times analysis of JPMorgan stock sales in 2015 found the practice was not universal across Wall Street. Some executives sold tens of millions of dollars of stock in the years after the financial crisis.
Around 2 million share options
Dimon has more than 2 million share options on top of his stock in the bank. Some of that came in the form of a “special award” in 2021, when the board granted Dimon 1.5 million stock appreciation rights in recognition of his “continuing, long-term stewardship of the firm, leadership continuity and management succession planning amid a highly competitive landscape for executive leadership talent”.
The JPMorgan stock appreciation rights awarded two years ago were a form of option that would become exercisable from July 2026, and Dimon would need to hold any shares until July 2031. However, the stock appreciation rights award was unpopular with shareholders.
Rise in JPMorgan stock price
During his time as chief executive, the JPMorgan’s shares have risen 250%, giving the group a market capitalization of $410 billion. Dimon made a personal investment in the bank’s stock in 2016, when he bought half a million JPMorgan shares for just over $25 million. Since then, the JPMorgan stock price has increased by 160%.
At JPMorgan’s investor day in May 2022, Jamie Dimon had touted JPMorgan shares after a promotional reel was played, saying “I would buy that stock”. At the time the bank’s shares were trading at about $120 apiece. They are now trading around $140.
SEC rules
Asked on a call with reporters months later if he had any plans to purchase more shares, Dimon said, “I already own plenty of stock. I do think the company is an exceptional company and well worth the price that it is today.”
Last month, Jamie Dimon warned recent proposals for new capital rules by U.S. regulators risked making bank stocks uninvestable.
The bank said Jamie Dimon would use stock trading plans to sell his JPMorgan stake of shares, in accordance with SEC rules.
Dimon was paid $34.5mn for 2022, which was unchanged from the year before I.e. 2021.
