JPMorgan Chase & Co. (JPM) Earnings Call Transcript & Summary

Welcome to the Annual Shareholders Meeting for JPMorgan Chase and Company, which will be led by Jamie Dimon, Chairman and CEO of JPMorgan Chase. Please welcome, Jamie Dimon.

Good morning, ladies and gentlemen. It's 10:00 a.m., and I'm pleased to call to order the Annual Meeting of Shareholders of JPMorgan Chase & Co. Welcome. I'm Jamie Dimon, Chairman of the Board and Chief Executive Officer of JPMorgan Chase and Chairman of this meeting. With me today is Stacey Friedman, our General Counsel. Stacey will serve as secretary of this meeting and will lead us through the formalities and the agenda. Stacey?

Thank you, Jamie. I would like to add my welcome to everyone for joining us today. As for the business of the meeting, I have, first, the affidavit of mailing of the notice of the meeting; second, the proxy statement; third, the form of the proxy; and fourth, the annual report. The shareholder list is available for inspection by our stockholders who are participating in this virtual meeting webcast by using the link provided in our virtual meeting website. Representatives of American Election Services, LLC have been appointed to serve as inspectors of the election and are with us virtually today. Kathryn Kaminsky, our audit partner from PricewaterhouseCoopers, is with us by phone. The meeting is properly convened. A quorum is present, and the proposed resolution set forth in the proxy statement will be filed as part of these proceedings. It's 10:02 a.m., and the polls on all proposals set forth in the proxy statement are now open and remain open until we announce they have been closed. Please note that if we experience technical issues such as a loss of audio or webcast connection, we ask that shareholders and guests stand by and allow us time to try and resolve the issue and resume the meeting or otherwise provide an update relating to the meeting. If a technical disruption occurs that prevents us from continuing the meeting, the polls will be closed immediately. The votes received prior to the time the polls were closed will be counted. The meeting will not be reconvened, and the vote results will be announced publicly. The meeting is being conducted solely through remote communications, and you will be able to participate in the meeting by voting and submitting questions through our virtual meeting website. You may submit questions at any time, and I would encourage you to do so now. Our meeting agenda and the rules of conduct for this meeting are provided on our virtual meeting website and will be strictly followed. Because this is a meeting of our stockholders, only shareholders who are holders of record on March 20 are permitted to vote and to make questions during the meeting. In order to vote or ask questions, please follow the directions on the virtual meeting website and in the rules of conduct. To allow us an opportunity to answer other shareholder questions, each shareholder will be limited to 2 questions. I know that many of you, hopefully, all of you, are customers as well as shareholders. And so before we turn to the business of today's meeting, I want to thank you for that. And I want to mention that if you have questions about a service we provide, you may also submit a question via the Ask a Question field on our virtual meeting website, and we'll get back to you separately after the meeting. We received proxies up until just before the beginning of this meeting representing over 85.25% of the outstanding shares eligible to vote, and these have been voted in accordance with shareholders' wishes. If there are shareholders present who have not yet voted, we ask that you take the opportunity to vote now using the link provided on the meeting website. Your votes will be recorded and reflected in the final vote results. Our remarks today may contain forward-looking statements. Please refer to our annual report on Form 10-K filed with the SEC for a disclaimer regarding such statements. That completes the necessary formalities. Jamie will next introduce the directors and comment on the state of the company.

Thank you, Stacey. I would like to recognize our incumbent director nominees, who are Linda Bammann, Stephen Burke, Todd Combs, Jim Crown, Tim Flynn, Mellody Hobson, Michael Neal and Lee Raymond. I'm also pleased to announce we have a new nominee for election at this meeting, Ginny Rometty. I'd also like to acknowledge James Bell and Labe Jackson, who do not stand for reelection. I want to thank them for their exceptional service over the years. So good morning, everyone. Today, our 2020 Annual Meeting is being held as a virtual meeting via the Internet with no in-person gathering. As I wrote in this year's annual letter to shareholders and as we come together virtually here today, the world is confronting one of the greatest health and economic threats of a generation. Our thoughts remain with the communities and particularly individuals and health care workers, first responders and service workers most deeply hit by the COVID-19 crisis. Throughout our history, JPMorgan has built its reputation on being there for clients, customers, communities in most critical times. This truly unprecedented environment is no different. Our actions during this crisis are essentially keeping the global economy going and will be judged for years to come. In my remarks at previous annual meetings, I usually cover a range of topics, including a review of our principles, priorities and performance as well as the broader geopolitical and public policy issues facing our company and our country. However, right now, as we deal with the spiraling effects of this pandemic, I want to focus on what we as a bank can do to remain strong, resilient and well positioned to support our colleagues, clients, customers and communities across the globe. Looking back on the last 2 decades, starting from my time as CEO of Bank One in 2000, the firm has weathered some extraordinary challenges as we will this current crisis. Once again, you should know how grateful and proud I am of our more than 250,000 employees around the world. I'd like to thank all of you who shared good wishes to me while I was recouping from my heart surgery a few months ago. I'm now in very good health and very happy to be back to work. I also want to thank Daniel Pinto, Gordon Smith, our Operating Committee, our Board of Directors and our senior leaders for the exceptional leadership they have shown under the most difficult of circumstances. I'll start with a brief look on our company's performance in 2019. We entered this crisis in a position of strength. 2019 was another strong year for JPMorgan Chase, with the firm generating record revenue and net income as well as setting numerous other records across our lines of business. We earned $36.4 billion in net income on revenue of $118.7 billion, reflecting strong underlying performance. We also continue to make significant investments in products, people and technology. In 2019, we grew core loans by 2%, increased deposits overall by 5% and generally broaden market share across our businesses. In total, we extended credit and raised capital of $2.3 trillion for businesses, institutional clients and U.S. consumers. We've now delivered record results in 9 of the last 10 years, and we are confident that we'll continue do so in the future, though earnings will be down meaningful in 2020. In the first quarter this year, the underlying results of the company were rather good. However, we necessarily had to build credit reserves of $8.3 billion, bringing our profits to $2.9 billion as we recognize the likelihood of a severe recession at a minimum. Now I'd like to turn to how we're dealing with this unprecedented crisis. Entering into a crisis is not the time to figure out where you want to be. You must already be a well-functioning organization prepared to rapidly mobilize your resources for the good of all your stakeholders. No matter the challenge, we manage our company's principles that have stood the test of time. These include extremely talented and motivated employees, a fortress balance sheet, disciplined risk and operating reporting, a devotion to our customers and communities and continuous investing. And we've always known that we need to be prepared for severe economic volatility. Our 2019 pretax earnings were $48 billion, a huge and powerful earnings stream that enables us to absorb the loss of revenues and the higher credit costs that inevitably follow a crisis. We've always run multiple stress scenarios, including extreme stress, which is more extreme than the Fed's severely adverse stress test. Even with a meaningful reduction in our revenue and any significantly to loan loss reserves, we would expect to be profitable. Our common Tier 1 ratio would hold at strong capital levels, and we have in excess of $500 billion of liquid assets. It's also important to be aware that in all cases, we are lending, currently or plan to do so, an additional $150 billion for clients' need. We could, of course, yield our significant capital and liquidity buckets by restricting our activities, but we do not intend to do that. Our clients need us, and we have more than sufficient capital and liquidity. I would like to point out, as we get closer to the extreme adverse scenario, that current regulatory constraints may nonetheless limit additional actions we can take to help our clients in spite of the extraordinary amount of capital and liquidity. Now I'll describe how we're going to great lengths to help our customers and clients, large and small. To help consumers who are struggling financially, we have provided over 1.5 million hardship accommodations, including delaying payments and refunding fees across our business banking, home lending, credit card, deposit and auto lease and loan accounts. Included in this are hundreds of thousand homeowners we have helped both by delaying their mortgage payments for at least 3 months. They won't be charged a late fee or penalty during this time, and we generally move the missed payments to the end of the mortgage term. In March and April, we approved more than $45 billion in new credits for clients impacted by COVID-19. This included approximately $6 billion to hospitals and health care companies, education institutions, nonprofits and state and local governments. This is in addition to the approximately $55 billion of drawdowns on committed revolving facilities in March. Year-to-date, we've extended more than $400 billion of new and renew credit to support our clients and customers. We're also assisting our corporate clients in raising capital, including many industries that have been hit hard by the pandemic, from health care, to travel, to transportation. Year-to-date, we have helped clients raise $664 billion in investment-grade financing and $104 billion in high-yield financing. In addition, we work to help as many of our customers as possible to receive loans through the SBA's Paycheck Protection Program. Since the beginning of PPP, we funded a total of more than $30 billion to over 250,000 businesses, helping to support more than 3 million employees. The average loan amount is $122,000, and half of those loans were to companies with fewer than 5 employees. During this pandemic, we have taken extensive steps to protect and support our employees and their families. For example, we mobilized our workforce around the globe to work remotely where feasible, and those who still need to go to the office or to a branch, we are taking extra precautions for their safety. We made a special payment of up to $1,000 to [ elder ] employees and have given 5 additional paid days off to all employees. We also expanded access to medical resources, both internally and externally. Importantly, the public and private sector is also making longer-term plans to reopen our economy. As we develop our strategy for bringing more employees back to working on site, the 2 principal considerations driving our approach are using the latest data and information due at the right time, which may differ by region, country, state, and that prioritizes the health and safety of our people. If you read my annual letter to shareholders this year, you may have noted the only other issue I focused on was diversity and inclusion. This shows I seriously take it in our commitment to integrity, fairness and responsibility. We have more than 250,000 employees globally, and more than 50% of our workforce is ethically diverse. Notably, to date, we represent more than 50% of the Operating Committee and more than 30% of our company's senior leadership. About a year ago, we announced Advancing Black Pathways to help black people at the firm and in the community we serve achieve economic success. We also know that too many people are being left behind, particularly in the black community. The civil war ended more than 150 years ago, and we still have not come even close to parity. We need to do more as a nation, and we have to do more as a firm. Examples of what we are doing include enhancing the employee feedback process, making it easier for all of our customers to access our products and services, bolstering hiring systems to build a more robust pipeline of diverse talent, instituting required diversity and inclusion training, increasing the diversity of businesses that we partner with and recently hired a gentleman, Brian Lamb, as the global head of diversity and inclusion, a newly created position that builds on the firm's existing work and one that reports to our co-Presidents. Again, a sign of how seriously we're taking this issue. We are continuing to help the most vulnerable in our communities. Crises like COVID-19 create further inequities in society, so it's even more important that we be present for these communities hit hardest by the pandemic. We must ensure the recovery from this crisis is inclusive. So far, we've made a $250 million global business and philanthropic commitments to support vulnerable communities, existing non-for-profit parties and underserved small businesses. Going forward, we will continue to look for ways to invest in efforts and advance recovery and rebuilding policies that create and sustain opportunity for more people, especially those who've been left behind for too long. Throughout this crisis, we've been working closely with all levels of governments to do our part to help. While we will participate in government program to address the severe economic challenges, we will not request any regulatory relief for ourselves. The Fed's overwhelming actions have already dramatically reduced the financial stress in the system, and they can still do more if they need to. For example, balance sheet expansion, additional lending facilities and changes to capital liquidity requirements and steps designed to ensure that more capital will flow through the system, which will ultimately allow us to help more families and small businesses. After the crisis subsides, and it will, our country should thoroughly review all aspects of our preparedness response, fiscal, economic and regulatory. I still have a fervent hope for America. Sometimes extraordinary events in history can cause a change in the body of politics. As a nation, we were clearly not equipped, or was the globe, for this global pandemic, and the consequences have been devastating. But it is forcing us to work together, and it is improving stability and reminding us that we live on one planet. I'm hoping this humanity, empathy and the goal of improving America will break through. We have the resource to emerge in this crisis as a stronger country. America is still the most prosperous nation the world has ever seen. It has and will continue to be a beacon of hope for the world and [indiscernible] for the world's best and brightest. Of course, America as always has flaws. Intercity schools don't graduate half of their students; our health care system is increasingly costly and bureaucratic; our litigation and regulatory system cripples small businesses; our infrastructure plan and investment is ineffective and inadequate; we have failed to put proper immigration policies in place; our social safety nets are poorly designed; and the share of wages to the bottom 30% of Americans has effectively been going down. We need to acknowledge these problems and the damage they have done if we're ever going to fix them. Every problem I have noted above should have detailed and nonpartisan solutions. As we've seen in past crises of this magnitude, there will come a time when we look back and it will be clear how we, at all levels of society, government, business, health care systems and civic humanitarian organizations, could have been and will be better prepared to face emergencies of this scale. While the inclination of some will be to finger point and look for blame, I hope that we can avoid that. My fervent hope is that America rolls up its sleeves and starts to attack these problems, fixing them with better preparedness for future catastrophes, create better economic outcomes for everyone, improved income and equality, protect the most vulnerable and [ forward ] economic growth that is more resilient, which would also strengthen America's role in the world. We must never forget that America's economic prosperity is a necessary foundation for our military capability, which keeps us free and strong and is essential to world peace. If we knowledge our problems and work together, we can lift up those who need help and society as a whole. Business and government collaborating together can conquer our biggest problems. Let me close by the way I opened by thanking our more than 250,000 employees, including our exceptional senior management team and Board of Directors. Our Board of Directors is fully engaged in all the critical matters of the company, from setting the agenda of the Board meetings for viewing strategy to helping to carry the culture and determine CEO compensation and succession planning. In terms of succession planning, while I serve at the pledge of the Board, I am in good health, and I fully enjoy my role as Chairman and CEO of JPMorgan Chase. I believe it's a critically important role, especially in times like this, and I intend to continue in this job doing it to the best of my abilities. That said, at every Board meeting we discuss succession, I also meet with Gordon Smith and Daniel Pinto every 6 weeks or so to make sure the company has the right senior leaders in every key job and they continue to develop the top talent for the future. I would also like to thank 2 retiring directors, Labe Jackson and James Bell, for their long-standing exemplary service on the Board. Our Board is populated with great new beams. As you know, this is Lee Raymond's last annual meeting as our lead director -- lee has been our lead director for more than 6 years and a member of our Board for more than 19. I will tell you without any hesitation that the success of our company over the last number of years, including through 2 financial crises, has been in no small way in part because of leadership, counsel and wisdom of Lee Raymond. Lee is a man of extraordinary intellect and impeccable character. His knowledge of our company, financial services, global affairs and the management of large organizations is exceptional. As a leader among leaders, he's always encouraged and considered a range of views and opinions on a multitude of issues facing our company and society, including climate change. Lee has made us a better company in measurable ways, and I'm deeply proud of his continued service and friendship. Personally, I'm honored to work in this company with these great people. I'd like to end by expressing my deep gratitude to all of our employees at JPMorgan Chase. Now I'd like to hand it back off to Stacey Friedman.

Thank you. Thank you, Jamie. It's now time to turn to the proposals that are in the proxy statement. I will introduce the management proposals and then invite shareholder proponents to introduce their proposals. After all the proposals have been introduced, we'll respond to shareholders' questions regarding the proposals, including questions that were submitted prior to the meeting. After the polls have been closed, we'll hold a general Q&A period, during which we'll address general questions, including any that were submitted prior to the meeting. I now move all of the management proposals as set forth in the proxy statement. These are for: first, election of the 10 nominees listed in our proxy statement as directors; second, an advisory resolution to approve executive compensation; third, ratification of the independent registered public accounting firm, PricewaterhouseCoopers. I will now ask the shareholder proponents to introduce their proposals. Proponents, as stated in the rules of conduct through this meeting, we ask that you limit your time to 3 minutes and confine your comments to the subject matter of the proposal being presented to be sure that all proponents have an opportunity to present today. I'll begin with proposal 4, the independent Board Chairman. Proposal 4 was submitted by John Chevedden on behalf of Kenneth Steiner. We've been advised that Mr. Chevedden will present this proposal. Are you on the line, sir?

Hello. This is John Chevedden. Can you hear me okay?

I can. Perfect. Will you please go ahead and introduce the proposal?

Certainly. Can the meeting leader respond? Can he hear me okay?

Yes, sir. We can. Can you hear me?

I don't hear Mr. Dimon responding, whether he can hear me.

Yes, I can hear you. I can hear you.

Please go ahead.

Okay. This is our proposal 4, independent Board chairman, sponsored by Kenneth Steiner. Shareholders request our Board of Directors adopt as policy and amend our governing documents to require the Chairman of the Board be an independent member of the Board whenever possible. Although it would be better to have an immediate transition to an independent Board Chairman, the Board would have the discretion to phase in this policy for the next Chief Executive Officer transition. This proposal topic won 52% support at Boeing in late April. This proposal topic also won 50-plus percent support at 5 major U.S. companies in 1 year, including 73% support at Netflix. These 5 majority votes would have been still higher if more shareholders had access to independent proxy voting advice. It is more important to have an independent Chairman of the Board since our lead director, Lee Raymond, at age 81, has 19 years long tenure. Long tenure in a director is the opposite of independence, and independence can be the most important attribute for a director, especially a lead director. Plus Mr. Raymond serves on no other significant Board of Directors to keep his skills up to date and bring new ideas to JPM. JPM shareholders seem to be impatient with Mr. Raymond since he received the second highest negative votes at the 2019 JPM Annual Meeting. Stephen Burke received the highest negative votes at the 2019 JPM Annual Meeting, which may be a negative reflection on his chairmanship of the JPM Nomination Committee. The roles of Chairman and CEO are fundamentally different and should be held by 2 directors, a CEO and a Chairman who is completely independent of the CEO and our company, particularly at a company as large and powerful as JPM. The show of support for this proposal will be understated because management has used shareholder money to distribute glossy advertisings opposed to this proposal. Thus, this selection is not a level playing field. The super size management opposition to shareholder proposal undercuts the credibility of the so-called JPM shareholder outreach program. Please vote yes, independent Board Chairman, proposal 4.

Thank you, sir. We oppose the resolution, and our reasons for doing so appear on Pages 93 and 94 of the proxy statement. We'll now turn to proposal 5, which was submitted by Trillium Asset Management LLC as agents for Oneida Trust Minors. We've been advised that Jonas Kron will present this proposal. Mr. Kron, can you hear me?

Yes, I can hear you.

Please go ahead.

Thank you. Good morning, Mr. Chairman, members of the Board, fellow shareholders. My name is Jonas Kron, and I'm here on behalf of Trillium Asset Management and its clients to hereby move proposal #5, seeking a report on the company's involvement in Canadian oil sands production, oil sands pipeline companies and other matters. To begin, JPMorgan faces ongoing exposure to reputational risks associated with the Canadian tar sands projects. On April 2, JPMorgan led a $1.25 billion bond issuance for TC Energy, the primary entity behind the Keystone XL tar sands oil pipeline. Now surprisingly, this put an even larger target on JPMorgan's backs by climate activists, and it has already brought further negative attention to the bank. This is only the most recent tar sands-related attention and controversy that JPMorgan has experienced. In January and February, JPMorgan received significant negative attention in the media as activists focused their criticism on the bank with renewed vigor. It should be said that also in February, JPMorgan announced the commendable policy on Arctic matters, and we believe that it was a wise decision to do so. However, because the policy does not apply to financing companies involved in Arctic drilling, existing projects, and does not rule out exploration, there is ongoing risk that the company will face reputational damage related to its financing related to Arctic -- to the Arctic. So given these reputational risk exposures, we believe investors would benefit from more disclosures on how JPMorgan Chase plans to respond to rising reputational risks related to involvement in Canadian oil sands production and oil sands pipeline companies. Public attention on JPMorgan's involvement in the Arctic and Canadian oil sands has been occurring for years. It has resulted in business disruptions at our branch offices, public scrutiny and inquiries from Capitol Hill. How JPMorgan plans to respond to these risks as climate change activism escalates is an important question. It may be that the reputational impact will affect policymaker oversight, various lines of business, employee morale or its ability to recruit new employees. But regardless of the specific risk, we believe it is investors' interest to understand what the Board thinks of the reputational risks created by its involvement in these projects and companies. This information will allow investors to make better predictions about the risks and opportunities JPMorgan confronts. In short, it will provide investors with actionable information about their investment, something all investors need. Thank you.

Thank you very much. We oppose this resolution, and our reasons for doing so appear on Pages 95 and 96 of the proxy statement. We now want to turn to proposal 6, which was submitted by As You Sow on behalf of Brian Patrick Kariger Revocable Trust. We've been advised that Danielle Fugere will present this proposal. Ms. Fugere, can you hear me?

Yes. Good morning.

Good morning. Please go ahead with your proposal.

Thank you. Mr. Chairman, members of the Board, fellow shareholders, my name is Danielle Fugere, and I'm presenting proposal #6. This proposal requests a report on whether the company plans to reduce the carbon impact of its lending activities in alignment with the Paris climate goal; and if so, how it will do so. JPMorgan is the largest global financier of fossil fuels, having channeled an average of $67 billion per year into fossil fuel companies since the time the Paris Agreement was adopted. This amounts to nearly 10% of total bank lending to the fossil fuel sector during that time. As noted by Mr. Dimon, due to the COVID-19 pandemic, 2020 has seen unprecedented disruption. This shock demonstrates how critical early action and planning are to mitigate likely global catastrophes. Thus, even as the financial sector grapples with the impact of the pandemic, it must also take action to stem the risks presented by the climate crisis, which moves with equally catastrophic potential and presents material portfolio risk to investors. Globally, losses from climate change are estimated to be between $150 trillion and $790 trillion by 2100, and the financial sector will not be spared. As the world transitions, the fossil fuel sector is already showing signs of profound disruption. To safeguard shareholder value, our company must take action to measure, disclose and set targets to reduce its finance emissions, phasing out lending to the riskiest and most harmful fossil fuel projects first and ensuring that its reductions are made at the scoping rate necessary to align with the Paris Agreement's goal. We commend our company for its recent action to join Climate Action 100+, an investor initiative created to move large corporate lenders to reduce their greenhouse gas emissions. We also applaud the company's recent policy to limit the financing of Arctic drilling projects and to end lending to certain coal companies. This is an important first step. But the vast majority of the company's high carbon lending remains unaffected by this new policy. As investors, we know that JPMorgan can and must do better. Many of its peer banks have already made commitments to align their lending with the Paris Agreement, and they have begun measuring, disclosing and reducing their total carbon footprint. We look forward to working with the company to make the progress demanded by the climate crisis. Thank you. We ask you to support proposal #6.

Thank you. We oppose this resolution, and our reasons for doing so appear on Pages 98 and 99 of the proxy statement. We'll now turn to proposal 7, which was submitted by Mr. Chevedden. We've been advised that you will present this proposal as well. Can you hear me, sir?

Hello. This is John Chevedden. Can you hear me?

Yes. Please go ahead.

Our proposal 7, initiate meaningful shareholder right to act by written consent. Shareholders request that our Board of Directors take the steps necessary to add these words through our bylaws to make the current JPM written consent a meaningful shareholder right: "Any shareholder of record seeking to have the stockholders authorize or take corporate action by written consent without a meeting shall, by written notice delivered to the secretary of the corporation, request the Board of Directors to fix a record date." When JPM adopted a shareholder right to act by written consent, it put in a hurdle to make written consent not a meaningful right. Our directors made it necessary for 20% of JPM shares or $50 billion to request a record date. In other words, shareholders would need the backing of $50 billion of JPM shares to simply ask management to set a date. JPM now has a version of shareholder right to act by written consent that makes no sense and appears to be 100% excess baggage. Under the current JPM written consent, it takes 20% of JPM stock just to get management to look at a calendar and set a date. Why would anyone go to tremendous administrative burden to gather together 20% of JPM stock just to have management look at a calendar when the same 20% of JPM stock could obligate management to call a special shareholder meeting? JPM's current written consent is thus inferior to its long-standing shareholder right to call a special meeting. The management statement next to this proposal is misleading. When shareholders approve the current 100% excess baggage version of written consent, shareholders did not have the opportunity to opt out of the excess baggage clause. Please vote yes, initiate meaningful shareholder right to act by written consent, proposal 7.

Thank you. We oppose this resolution, and our reasons for doing so appear on Pages 100 and 101 of the proxy statement. We'll now turn to proposal 8, which was submitted by Thomas Strobhar. We've been advised that Mr. Strobhar will present this proposal. Sir, are you on the line?

Yes, I am.

Great. Please go ahead.

My name is Thomas Strobhar. Good morning to the Chairman, the Board of Directors and fellow shareholders. This resolution regards charitable contributions disclosure. And very simply, I've asked for the company to list all the direct corporate gifts, contributions, grants, whatever you want to call it, that they make that do not include matching gifts to -- from the employees. Just keep in mind, corporate contributions are the fruits of the labor of all our employees and belong to all the shareholders. We should be sensitive to the individual differences and preferences of these 2 groups. But what prompted my initial interest in this topic was a $500,000 contribution from JPM to the Southern Poverty Law Center. This organization, the Southern Poverty Law Center, is most famous for its list of "hate groups." It once included the [ impaired ] suspects like the Klu Klux Klan, skinheads and others. More recently, it has added a number of Christian organizations primarily because of disagreements over human sexuality in the nature of marriage. List -- the included list represents views of millions, if not tens of millions, of Americans. Calling them haters is, most obviously, uncivil, and frankly, wildly inaccurate. It is not unlike Hillary Clinton claiming millions of Americans deplorable for some of the same reasons. And also, JPM's supported controversial groups like Planned Parenthood, which does over 300,000 abortions a year. Love it or hate it, abortion is very controversial, and we have employees and shareholders on both sides of this question. The company response is that some projects are mentioned in the annual report or the corporate responsibility report, neither of which mention all of the contributions the company makes. The only comprehensive listing is on the website of a third party, which very few people are familiar with. The list is over 1,200 pages long and does not differentiate direct corporate grants from employee matching contributions. Thus, we are often taking undeserved credit or blame. As individuals, we may choose to make our charitable contributions anonymously. As a corporation, we should shout our benevolence from the rooftops. That's what corporate contributions are supposed to do, to engender goodwill. Feedback from our stakeholders would be a most valuable tool. A simple list of direct corporate contributions seems an appropriate response. I urge you to vote for this resolution. Thank you.

Thank you very much. We oppose this resolution, and our reasons for doing so appear on Pages 102 and 103 of the proxy statement. We'll now turn to Proposal 9, which was submitted by Arjuna Capital on behalf of Rainer Judd, Laura Ballance and Lucas Suer. We've been advised that Natasha Lamb will present this proposal via prerecorded statement. Operator, would you please play Mrs. Lamb's statement?

Good morning. My name is Natasha Lamb, and I move proposal #9 on behalf of Arjuna Capital, asking for a report on gender and racial pay equity. On its face, JPMorgan has taken an important first step by publishing statistically adjusted pay parity numbers, assessing the pay of men and women performing similar jobs and the pay of minority and nonminority employees performing similar jobs in the U.S. And while we are proud to have worked with a company to make that data public, this statistically adjusted pay parity reporting is only half the story. The other half is median pay disclosure, which is the objective of this proposal. Pay gaps are comprised of 2 parts: equal pay for your current job versus peers and equal opportunity to high-paying jobs. Median pay gaps reflect a lack of equal opportunity by measuring whether women and minorities are holding as many high-paying jobs. The gender pay gap is literally defined as the median pay of women working full time compared to the median paid men. Women in the U.S. make $0.82 on the dollar on this basis. African-American women make $0.62, and Latina women makes $0.54. Median pay gaps are considered the valid way of measuring pay and equity by the U.S. Census Bureau; the Department of Labor; the Organization for Economic Cooperation and Development, the OECD; and the International Labor Organization, the ILO; not to mention the United Kingdom, which now mandates disclosure of median pay gap. To choose to ignore median pay gaps and for the Board to label the measure "not meaningful" is misleading and a disservice to the group's [ big ] pay gaps effect. We can see JPMorgan's pay gaps in the U.K. because they are mandated. Our company reported a 26% hourly pay gap and a 41% bonus pay gap for its U.K. operations. But notably, our company has not published median information beyond the U.K. Yet, companies like Citigroup, Mastercard and Starbucks are already showing leadership by publishing their median pay gap data globally. These disclosures can improve performance and provide a baseline for measuring progress moving forward. A 2019 study in the Harvard Business Review found that wage transparency in countries that mandate it narrowed the median wage gap. There are many ways to shrink gender and racial pay gaps at a company, improving diversity, ensuring statistically adjusted pay parity, advancing women and minorities into positions of leadership. But the only benchmark to measure whether the pay gap is actually shrinking from these various levers is to publish the pay gap itself. Thank you for your time as we firmly believe our company is best served by a transparent and fulsome accounting of pay equity.

Thank you. We oppose this resolution, and our reasons for doing so appear on Pages 104 and 106 of the proxy statement. That completes the introduction of the shareholder proposals we've opposed for the reasons set forth in the proxy. If anyone has questions regarding any of the proposals, please submit them now using the Ask a Question field on the meeting website. Before we answer questions on the proposal, we've been advised that Timothy Smith would like to make a brief statement on behalf of Boston Trust Walden. Mr. Smith, can you hear me?

I can. And can you hear me?

Yes. Please go ahead.

Good morning. Good morning, Mr. Chairman, directors and fellow shareholders. As you've heard, I'm Timothy Smith. I'm here today representing Boston Trust Walden, a firm based in Boston, a longtime shareholder in JPMorgan Chase, owner of approximately 950,000 shares as of today. We are long-term investors in the bank and, as such, support the bank as it creates a long-term plan to serve customers and advance shareholder interest. And we want to speak on behalf of all of us, a word of appreciation for the hard and much-needed work of JPMorgan and its employees during this tragic and unsettling pandemic. Over the years, our firm, Boston Trust Walden, and along with other investors, has engaged the bank and its leadership on a number of issues, from climate change, to business ethics, to Board diversity. And one of the issues we focused on is the record of JPMorgan Asset Management and its voting of proxies on key environmental, social and governance issues. Last fall, our firm led a group of investors, including Mercy Investment Services, and filed a shareholder resolution with JPMorgan Chase urging a review of a proxy voting record on key issues like climate change. Unfortunately, JPMorgan in the past had a poor voting record, only voting for approximately 15% of important shareholder resolutions on climate. We felt this was ironic since the bank has issued forward-looking positions on climate change, describing the negative impact on our environment, our economy and our portfolios. Yet the asset management side of the bank seemed to be on a different wavelength, voting shares against forward-looking climate resolutions. This was in contrast to many other major investment managers who've been actively engaging companies and voting their proxies in support of such resolutions. However, after a very constructive dialogue, led in part by your Corporate Secretary's office and their able management, Boston Trust Walden and the other sponsors withdrew the resolution for this year. We've been encouraged by the new statements by JPMorgan Chase about climate change and its risk to investors. And we're also so pleased to see, as Danielle Fugere said, that the bank had joined the important and effective group Climate 100+, which, before the pandemic, affected the market and investors with over $41 trillion of assets under management, working together to encourage companies on climate, a well-done decision by the bank. We commend JPMorgan for these steps, and we trust that they will influence our engagements with companies and our votes in this spring proxy season. How we vote sends a clear message to companies supporting -- as we urge them to support new policies and changes. We also watch with interest as companies like BlackRock have announced a much more active position on climate change. There is a new investment -- investor energy on climate. We're glad to see JPMorgan playing its part and urge the Asset Management division to do so. We know that our management and our sustainability leadership is hard at work inside the bank updating our policies and reviewing our practices on climate change. And we're all aware that this issue is not going to go away, witness the resolution that was filed today by both Trillium Asset Management and As You Sow. This is an issue being supported by numerous banks, numerous investors, and we believe it's a fiduciary that since we take care of other people's money, that JPMorgan needs to improve our proxy voting record on climate. So we look forward to seeing the tally of votes for this season and to continue our discussion with management and JPMorgan Asset Management on this topic. Thank you very much for this opportunity.

Thank you, Mr. Smith. We've also been advised that Meredith Benton of As You Sow would like to make a brief statement. Ms. Benton, can you hear me?

I can.

Please go ahead.

Hello, I'm Meredith Benton. I'm principal at Whistle Stop Capital and a consultant to the As You Sow Foundation, a nonprofit organization promoting corporate responsibility. In 2019, we sent an investor statement on workplace equity disclosure signed by $1.73 trillion in represented AUM to 3,000 companies. The statement explained that corporate transparency on diversity inclusion was generally insufficient and that investors needed more data on the effectiveness of corporate practices. Investor interest in this information stems from studies linking diversity to innovation, new market identification, risk management and thoughtful decision-making. Given this, we ask JPMorgan Chase to publish metrics related to the company's promotion, recruitment and retention of diverse employees. We ask for this information so that investors might have access to quantitative, comparable data across companies. I'm glad to be able to commend and thank JPMorgan Chase for the conversations we have had on this complex issue. The company has now released workforce composition data and will soon release high-level promotion rate data. This sharing of initial data associated with the company's diversity initiative implies that JPMorgan Chase is taking seriously and understands the need to be accountable and responsive to its investors, to its employees, to its consumers and to its broader community. We understand that our company is at the beginning of its journey, and we look forward to continuing to cheer as it builds out its reporting on this important topic. Thank you.

Thank you, Ms. Benton. We will now turn to shareholder questions regarding the proposals we've just discussed. We'll begin with the questions that were submitted prior to the meeting and then continue with questions that have been submitted while this meeting has been going on. I'd like to invite Jason Scott, Head of Investor Relations, to read the questions from our shareholders. Mr. Scott, please go ahead.

Thank you, Stacey. This first question is with respect to proposal #1. The question is, can you identify which directors being proposed are new to the Board?

We have one new director nominee this year, Ginny Rometty.

Thank you. We also received a question from [ Jeff Daily ] regarding how the firm is addressing climate change.

Well, this is Jamie. So we believe that climate change is an important global challenge. Businesses have a role to play in addressing climate change, and we're using our resources and expertise to support the transition to a lower carbon future. In February, at our Investor Day, we announced several new commitments to expand upon our previous sustainability efforts. These include financing $200 billion in 2020 for transactions that advance sustainable development, including climate action and social economic development; enacting restrictions on coal and Arctic-led transactions, including in the Arctic National Wildlife Refuge; membership in the Climate Leadership Council, which supports a carbon tax and dividend policy in the U.S. to reduce carbon emissions while protecting consumers; and within our Asset Management business, an enhanced focus on climate change, including joining the Climate Action 100+ investor initiative to enhance its engagement with companies and economy-related risks and opportunities.

Thank you, Jamie. The next question concerns the firm's sustainable finance strategy and was submitted by [ Oliver Hales ] of Trinity Responsible Investment Society. Question states: In 2020, JPMorgan committed $200 billion over 5 years to finance projects that advance the objectives of the unsustainable development -- the UN sustainable development goals. Over the past 4 years, however, JPMorgan has financed the fossil fuel industry more than any other global institution totaling $269 billion. When will JPMorgan adopt a coherent long-term strategy by joining almost 200 institutions and committing to the principles for responsible banking, developed by the UN environment program, finance initiative in 2019 to provide a global framework for sustainable financial system?

Again, we agree that climate change is an important issue. It is why the firm supports the Paris Agreement and has been expanding its efforts on sustainability and climate change over the past several years. [ Today, ] in the world on track for Paris Alignment will require significant shifts in the way energy is produced and consumed around the world. We have to do it in a way that protects consumers and promote social and economic development, especially with people who don't have regular access to energy today. It will require a thoughtful and detailed policy, technological research and innovation and investment and significant cooperation in the public and the private sectors. That is why we published a TCFD climb report last year. We've discussed the steps we are taking to manage climate-related risks and opportunities. It's also why in February, alongside Investor Day, we announced another 7 new sustainability commitments that expand upon the firm's [ philanthropic ] efforts, including a commitment to use renewable energy for 100% of our power use annually; also a commitment to facilitate $200 billion in financing sustainable development in 2020; announcing expanded financing restrictions on coal mine, coal-fired power and oil and gas development in the Artic and membership in the Climate Leadership Council, which is a bipartisan group calling for carbon tax. Our management team is committed to exploring how we can continue to drive the transition to a low carbon future over time, including developing meaningful commitments that we can achieve.

Thank you, Jamie. That concludes the pre-submitted questions that relate to our shareholder proposals. Now we will turn to questions submitted by shareholders during the meeting. The first question is on proposal #1, the election of directors. It was submitted by Tim Smith of Boston Trust Walden. Question is: We commend JPMorgan Chase for its further progress on diversifying its Board. As you know, this has become a major priority for many investors, from state pension funds to state Street, who often -- walking with giant Boards with inadequate diversity. Thus, it is smart practice to ensure we continue to build diverse board in terms of gender and race. Does the Board have a practice that they ask the Nominating Committee to ensure there is a diverse slate of candidates for every Board seat?

Yes.

Question number two is also on Proposal 1, election of directors submitted by Lisa Lindsley of Majority Action. JPMorgan announced on April 30 that the Corporate Governance and Nominating Committee would plan to announce a new lead independent director by end of summer 2020. The same proxy supplement announced "forthcoming committee changes in 2020." Will Mr. Raymond remain on Corporate Governance and Nominating Committee and the Compensation and Management Development Committee?

That, of course, is up to the Board, but that's the current intent.

The next question we received on shareholder proposals is on proposal #5 related to oil and gas in Arctic -- in the Arctic. It is from Ben Cushing of the Sierra Club. Question is: Will you strengthen your prohibition on Arctic oil and gas projects to also include ending general financing for companies that are actively seeking to expand production-sensitive Arctic ecosystems such as the Arctic National Wildlife Refuge?

So in 2020, we did announce new restrictions on oil and gas development in the Arctic, which includes sensitive areas like the Arctic National Wildlife Refuge. We will now provide project financing or other forms of asset-specific financing where the proceeds will be used from new oil and gas development in that Arctic area.

Thank you. The next question relates to JPMorgan Chase's plans with respect to fossil fuels. There were several very similar questions that all asked, what is JPMorgan Chase's plan to phase out its investments in fossil fuels and align its investment portfolio with the goals of the Paris Agreement? So related to proposal #6.

I think we've already answered that, that we believe and support the Paris Agreement. We supported many other agreements report, including the carbon tax initiative, which may be the most important to do it rationally. We will help this country and this world get to sustainable and cleaner energy sources.

The next question also relates to proposal #6. It is a bit of a different question from Mary Minette of Mercy Investment Services. Question asks: How are you analyzing the climate impact of your lending practices in high-risk sectors such as oil and gas? And are you looking at ways to minimize that risk given the impact it is likely to have on the overall economy in the future?

The answer is yes, we do, do it. We disclosed it in our ESG report. I've already mentioned some of the things we're doing today. And we're enhancing all these systems and risk reporting to do an even increasingly better job at it.

Thank you. I believe we have now addressed all of the questions that were submitted during the meeting, specifically with respect to the proposals in the proxy.

Thank you. Now that we've completely responded to the questions on the proposals, I would invite stockholders who have not already done so to vote their shares by clicking on the voting button provided in the meeting website and following the instructions provided. The polls will remain open until voting has been completed. I will pause for just a brief moment. [Voting]

It is now 10:56, and I declare the polls closed. I will now read the preliminary vote results that were received immediately prior to the meeting. The final voting results were reported on a Form 8-K that will be filed with the SEC and also with the minutes of the meeting. With respect to the election of directors, all directors were elected, and each director received a majority of the votes cast for and against. No director received less than 84.6% of the votes cast. With respect to the other proposals today, the results I read will be the percentage voted for each proposal based on the shares marked for, against or abstain. On proposal 2, the vote for approval of the advisory resolution to approve executive comp was 92.22% for; on 3, the vote for ratification of our independent registered public accounting firm was 95.93% for; the vote for independent Board chair was 41.96% for; on proposal 5, the vote for a proposal related to oil and gas company and project financing related to the Arctic and Canadian oil sands, that is 15.18% for; on proposal 6, the vote for proposal on climate change risk reporting was 49.6% for; proposal 7, the vote for proposal to amend shareholder written consent provisions was 10.95% for; on 8, the vote for proposal regarding charitable contribution disclosures, it was 2.55% for; and on #9, the vote for a proposal on gender ratio pay equity, it was 9.89% for. That concludes all the formal business. Jamie, if you want to call to adjourn the meeting, now is the time. Jamie?

Thank you, Stacey. This concludes the business of the meeting, and the 2020 Annual Meeting of Stockholders hereby adjourned.

Thank you, Jamie. We are now ready to respond to general questions and comments submitted by shareholders. We'll begin with questions submitted prior to the meeting and continue with questions submitted during the meeting. As a reminder, if you have questions about the services we provide or your question is in regards to a personal matter, we'll be responding to those questions separately after the meeting. Jason, would you please read the questions?

Yes. Thank you, Stacey. The first question concerns the firm's efforts to assist vulnerable communities and was submitted by Reverend Séamus Finn of OMI and OIP Trust. Question states: The call of the business roundtable to promote an economy that serves all Americans has become more urgent as marginalized communities have not only been suffering economically because of COVID but have been dying in disproportionately high numbers compared to more affluent constituencies. Can you please outline 3 ways that our bank can serve these threatened communities and what shareholders need to do to get behind these life-saving measures?

Yes. So Reverend, I appreciate the question. I think I've noted in my prior remarks that we have extensive programs to assist customers who are struggling financially, be it mortgages, credit cards, auto loans, et cetera. We've already waived fees in more than 1 million credit card holder loans and hundreds -- and a couple hundred thousand mortgages have deferred their payments. So we will be working harder to get that done. We participate in the SBA payment protection program and extended loans to 250,000 clients, average loan size, $120,000. And we're also making $250 million of global business and philanthropic commitments to support vulnerable and underrepresented communities, not-for-profit partners and underserved small businesses. We're also providing $50 million in philanthropic support, and that project is working to help communities and people hit hardest by this public health crisis. I also mentioned earlier a couple of the things we're doing to help hospitals, schools, not-for-profit, states, local governments have more vibrant economies.

Thank you, Jamie. The next question we received concerns the impact of COVID-19 on employees and submitted by [ Frederic Capel ].

Yes. Some...

Yes. Some events such as May 11 may have long-term effects on people who work in frontline. How is the company protecting and following up with the frontline employees dealing with the COVID-19 pandemic and its potential long-term effects?

So clearly, the well-being of our employees is a top priority of our firm. We put in place many precautionary measures at all offices and branches and extended benefits and incentive accommodations. All employees globally who can work from home are doing so. I think that totaled maybe 180,000 people. We're taking mobile measures, those who come to the office, including wearing masks, increased social distancing, screenings and symptom checkers, sign education, greater ventilation and tried protocol for handling a confirmed or presumed positive case. We're also working in a number of protocols, and we prepare offices for additional step to return. These include remodeling and remapping of certain common areas and seating plans and establishing food handling and protocols in our cafés and canteens. With respect to COVID-19, we've expanded our health care coverage to include no out-of-pocket expenses for any COVID-19 related health care to help employees. We introduced cost-free virtual doctor visits for nonurgent medical matters, offer free virtual mental health visits and allow early prescription refills for the long term. The long term, we believe that robust health care benefits for all our full-time employees is important, and we're focused on providing employees with practical information and access to resource to empower them to take ownership of their well-being and to make positive lifestyle choice as a priority.

Thank you. The next question also concerns employees and asks: Is JPMorgan going to make a commitment to the hardworking employees, keeping our great company at the top of banking and science that the company will not have any layoffs during the year?

As Jamie just said, we're doing a lot to take care of our employees to help them through the crisis, and caring for employees is just simply a lot broader than not doing layoffs. Indeed, we're actually still hiring in many areas as well as repurposing some of the current staff or other open roles.

The last question received pre-submitted concerns cash deposits and was submitted by [ Anton Frank ] of [ AG&G Enterprises ]. It asks: Have you considered legal problems that could arise from asking clients for identification when you make a cash deposit?

Thank you, Mr. Frank. We do ask customers show ID. It's just to combat misuse of accounts, including money laundering.

That concludes the pre-submitted questions. We will now turn to questions submitted by shareholders during the meeting. We'll start with a question on share repurchases from Gerald Matthews of the United Brotherhood of Carpenters. It asks: As long-term investors, we appreciate the company's actions to address employee and customer health and safety issues created by the pandemic. We would also like to extend our continued best wishes to Chairman Dimon. In mid-March, the company suspended its share repurchase program, at least through the second quarter of the year. What factors will the Board consider in determining when to restart the share repurchase program and at what level?

And so we've always said that the highest and best use of capital is to grow our company organically and support our clients. Obviously, while entering a pandemic, we feel it was important to stop the stock buyback program to strengthen our capital base and keep it strong throughout this crisis. The Board will entertain in putting those stock probably back in place at the appropriate time when we believe that the crisis is pretty much over.

The next question is regarding dividends. A number of these, but they asked: Does JPM expect to be able to continue paying the dividend at the current level?

So I think we announced this morning that we -- the dividend for the quarter. And as long as the company continues to perform, we could pay the dividend. We've always told our shareholders, but depending how bad the environment gets, the dividend is something the Board would consider, which would be paid or not in the future.

The next set of questions we received are related and asked if there is any type of financial update on performance in the second quarter you could give as well as what are the greatest impact of COVID-19 on JPMorgan Chase.

I think I mentioned in my opening remarks, the company had as pretax earnings about $48 billion before going to this crisis. In the first quarter, we've traded on reserves by $8 billion. And we did indicate that we might need to trade on reserves again in the second quarter. We will do that at the appropriate time, looking forward and making some estimates about the third and fourth quarter and 2021, and we'll disclose that at the proper time. The good news is the underlying performance of the company continues to be good.

The next question we received asks: When was the last time the Board was able to meet in person?

So our last full Board meeting in person was January. Although I will say for our March meeting, we had a few of our directors coming in person as well, but our meeting since then have been remote.

The next question we received is regarding JPMorgan Chase's stock and asks: Do you expect the stock to split in the foreseeable future?

That's a question the Board will take up at the appropriate time, but I wouldn't expect it in the foreseeable future.

I'm checking to see if we have any further questions. Okay. Yes, we have a question on capital adequacy that asks: Can you please comment on the firm's capital adequacy, in particular with regards to supplementary leverage ratio and the Tier 1 leverage ratio?

We believe our company has extreme amount of capital to handle this crisis, et cetera. We have almost $1 trillion, but I would consider liquid assets, including high-quality liquid assets and stock -- I mean, investment portfolio, et cetera. So we are very well positioned to handle this crisis.

Okay. Let me check to see if there is anything else that we have received during the meeting or if that was it. Give me just 1 minute here. We have a few more, but we are going to get to them, if you'll bear with me for just a minute.

Jason, it looks like that you've covered all of the topics from the general questions. Do you agree?

Yes.

So I think we just have one final question...

I apologize, one more question that we have received that we have not covered, and I think then that will likely be [ needed ]. Do you -- the question is do you anticipate long-term changes to any consumer banking practices as a result of habit patterns that changed in response to the coronavirus?

I think there are lots of changes to banking patterns that have been taking place over time. And some will be accelerated by the COVID crisis, which is basically the digitization of the business. So some things will stay the same and some things will change. The goal will always be the same: do a great job for our customers however they want to access the bank services and products.

Thank you so much. And thank you, Jason, for curating the questions. Our discussion period has now concluded. If you did submit a question and would like additional information and response, please do contact Investor Relations via the contact information on our Investor Relations web page. Jamie, do you want to say a few closing words?

Yes, Stacey. Thank you. We greatly appreciate the views of all of our shareholders and how thoughtful they were in engaging us in the process. The entire Board who has been listening to this conversation takes their feedback very seriously, and we'll continue to incorporate their input in how we govern the company. We will continue to build towards being the best in class in every way. Thank you all very much, and that concludes the meeting.

This concludes today's webcast. You may now disconnect.