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

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

Good morning, ladies and gentlemen. It's 10 a.m., and I'm pleased to call to order the Annual Meeting of Shareholders of JPMorgan Chase & Co. Welcome. I am Jamie Dimon, Chairman of the Board and Chief Executive Officer 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. Also with us is Reggie Chambers, our Head of Investor Relations, who will be reading questions that have been submitted by our shareholders. Stacey?

Thank you, Jamie. I would like to add my welcome to everyone joining us today. As for the business of the meeting, I have, one, the affidavit of mailing of notice of the meeting, the proxy statement, the form of the proxy, 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 on the website. Representatives of American Election Services, LLC who've been appointed to serve as inspectors of the election are with us virtually. Dan Felgner, our audit partner from PricewaterhouseCoopers, is with us by phone. The meeting is properly convened, a quorum is present and the proposed resolutions 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 will remain open until we announce they have been closed. Please note, if we experience technical issues, such as the loss of audio or webcast, we will ask that shareholders and guests stand by to allow us time to try and resolve the issue, and we'll resume the meeting or otherwise provide an update. If a technical disruption occurs that prevents us from continuing the meeting, the polls will close immediately and 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. This meeting is being conducted solely through remote communication, and you will be able to participate in the meeting by voting and submitting questions through our virtual meeting website. You may submit a question at any time, and I would encourage you to do so now. Our meeting agenda and rules of conduct are provided in the meeting website and will be strictly followed. Because this is a meeting of our stockholders, only shareholders who are holders of record on March 19 are permitted to vote and submit questions during the meeting. In order to vote or ask questions, please follow the directions on the meeting website and in the rules of conduct. To allow us an opportunity to answer other shareholder questions, each shareholder will be limited to two questions. We received proxies up until just before the beginning of this meeting representing 85.48% of the outstanding shares eligible to vote, and these have been voted in accordance with shareholder 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 website. Your votes will be recorded and reflected in the final vote tally. 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 Board of Directors and comment on the state of the company.

Great. Thanks, Stacey. Thank you very much. I would like first to introduce and recognize our incumbent directors who are on this call today. They are Linda Bammann, Stephen Burke, Todd Combs, Jim Crown, Tim Flynn, Mellody Hobson, Michael Neal, Phebe Novakovic and Ginni Rometty. I am very proud to tell you that the dedication and commitment of your directors play a huge part in making this a great company. I would also like to encourage you to read the letter that was cowritten by myself, and our Lead Independent Director is included in this year's proxy. I will make some remarks now about the year we've had. As I wrote in this year's annual letter to shareholders and as we come together virtually here today for the second consecutive year, 2020 was an extraordinary year by any measure. It was a year of global pandemic, a global recession, unprecedented government's actions, turbulent elections and deeply felt social and racial injustice. It was a year in which each of us faced difficult personal challenges and a staggering number of us lost loved ones. It was also a year when those among us with less were disproportionately hurt by joblessness and poverty. And it was a time when companies discovered what they really were and sometimes what they might become. Watching events unfold throughout the year, we were keenly focused what we as a company could do to serve our countries. I want to start by saying how proud I am of what our company and our tens of thousands of employees around the world achieved collectively and individually. I also want to thank Daniel Pinto, Gordon Smith, our operating committee and our Board of Directors and senior leaders for the exceptional leadership they have shown under the most difficult of circumstances. As you might have seen, this morning, we announced some senior management changes to help build a path of success as a leader in global financial services for its customers and communities. Gordon Smith, Co-President and Chief Operating Officer and Chief Executive Officer of the Consumer and Community Banking, recently informed me of his decision to retire at the end of this year. Gordon will continue to carry on his current responsibilities until December, when Danny Pinto, Co-President and Chief Operating Officer and Chief Executive Officer of the Corporate and Investment Bank, will become the sole President and Chief Operating Officer of the firm. We're delighted that Gordon will continue as a senior adviser to me and other executives in the new year. You should know that Gordon has been an exceptional friend, exceptional leader and exceptional human being for this company. Marianne Lake, CEO of Consumer Lending; and Jennifer Piepszak, Chief Financial Officer of the firm, will become Co-Heads of Consumer and Commercial Consumer Banking effective immediately before the Board. As Co-Heads of CCB, Marianne and Jen will be responsible for home lending, auto finance, small business and U.S. wealth management businesses as well as our industry-leading Chase consumer banking and credit card businesses. And Jeremy Barnum, currently Head of Global Research for the Corporate Investment Bank, who have been the CFO of the CIB for 7 or 8 years, will succeed Jen Piepszak as Chief Financial Officer, also effective immediately. Congratulations to all. As a management team and as a company overall, we have long championed the central role of banking in the community with the potential for bringing people together, for enabling companies and individuals to reach their dreams and for being a source of strength in difficult times. Those opportunities were powerfully presented to us this year, and I'm proud of how we stepped up to help clients, communities and countries worldwide. I'll start with our company's performance in 2020. 2020 was another strong year for JPMorgan Chase, with the firm generating record revenue as well as numerous other records in each of the lines of business. We earned $29.1 billion net income on revenues of $122.9 billion, reflecting strong underlying performance across our businesses, offset by additional reserves under new accounting rules. We generally grew market share across our businesses and continue to make significant investments in products, people and technology, all while maintaining credit discipline and a fortressed balance sheet. In total, we extended credit and raised $2.3 trillion in capital for businesses, institutional clients and U.S. customers. I want to reiterate how the purpose of a corporation is tied to its role as a corporate citizen. JPMorgan stock is owned by large institutions, pension plans, mutual funds and directly by individual investors. To create long-term shareholder value, we need to build and maintain a healthy environment company to be able to deal with the uncertainties of life, to invest, to innovate and to grow. And to be healthy and vibrant, our company must do many things well. They must do a great job for customers; attract, develop and retain talented employees; and service communities. Businesses must earn the trust of customers and communities by acting ethically and morally. With JPMorgan Chase as a community, we take great pride in being a responsible citizen at the local level. In addition, being a responsible community citizen nationally or globally is equally important but far more complex. But we have devoted to philanthropy and have spent $330 million a year on philanthropic efforts. Corporate responsibility is far more than that. We are fully engaged in trying to solve some of the world's biggest issues: climate change, poverty, economic development and racial inequality. I'll cite a few ways we're addressing them. Last month, we announced a 10-year $2.5 trillion commitment to advance long-term solutions that address climate change and sustainable development. And last week, we released carbon reduction targets for our Paris-aligned financing commitments. And we introduced the path forward in October 2020, committing $30 million over the next 5 years to address the key drivers of the racial wealth divide, reduce the systemic racism against Black and Latinx people and to support employees. With well-designed policies, we think these issues can all be made significantly better. We also believe that business's extraordinary capabilities are even more powerful when put to use in collaboration with government capabilities. Now I'll turn to COVID and the effect it's had in the economy. Within days of realizing that COVID-19 is a global pandemic that have virtually closed down large parts of the world's economy, the U.S. government and the Federal Reserve moved with unprecedented speed and took bold actions to effectively reverse financial panic. Fortunately, banks are part of the solution, unlike in the Great Recession. And unlike the Great Recession, the U.S. economy is actually in good shape going into the COVID-19 recession. Just about every bank took extended actions to help with customers, employees and communities. And many companies, large and small, may not survive had JPMorgan Chase not taken security efforts to help them. I have little doubt that excess savings, new stimulus savings, huge deficit spending, more quantitative EG, a new potential infrastructure bill, a successful vaccine and before now and the end of pandemic, that the U.S. economy will likely boom, and this boom could easily run into 2023 because all of the spending could extend well into 2023. The current effect of this boom will be fully known only when we see the quality, effectiveness and sustainability of the infrastructure and other government investments. Now I want to discuss the importance of collaboration because of problems that are tearing at the fabric of American society. And these problems require government, business and civic society to work together with a common purpose. If we could agree on what these problems are as well as the symptoms and its causes, then we can start to address them. I want to highlight a few of the problems I see. The education system is broken. While the average American high school graduates promptly 85% of the students, many of our inner city schools don't graduate half of their students. This is certainly not equal opportunity. Our health care system, among the best in the world, is also increasingly costly, now at $11,000 per person, more than twice our global competitors, and the outcomes are certainly not twice as good. We need to invest properly on an ongoing basis in infrastructure, including highways, ports and water systems to airport modernization of the products. Our challenges are significant, and we should assume -- not assume that they will take care of themselves. [ 15 Americans filed ], we're going to take hard work, and we all have to do what we can to strengthen our exceptional union. What stands in our way is the following: presenting issues is that they're binary, which they almost never are; creating and blaming scapegoats, frequently, we blame trade, China, immigration or capitalism; unfairly assigned [ modes ] to people that may or may not be true; and creating strawmen. Here's what we need to do to start to solve some of America's problems. We need a national plan effectively, a coherent, consistent national strategy to match the severity of existing structural challenges that are driving the country's racial and economic crises. We need a healthy growth strategy. We need to promote healthy economic growth, and this should be a primary economic policy of both political parties. We believe that if we have the right policies, we can enhance growth in America by 1% a year, which will be good for every single American. We need to take specific actions, and there are 15 policies where we made recommendations and we think if we do and do a good job with these policies, not just spend the money but spend the money well and effectively. Training for jobs with community colleges and high schools. Paying more for jobs. That would include raising the minimum wage, the earned income tax credit, et cetera. Creating jobs by giving people a clear background and a second chance. Making the health care system work better. And JPMorgan will be announcing some moves soon about things we think we could do to make it work better. We need proper, rigorous and multiyear budgeting, planning and reporting at the government level. Proper management and proactive review of regulatory red tape and bureaucracy, which is crippling the formation of small business. We need proper investments on an ongoing basis in infrastructure. But if you don't fix the regulatory problems, you will not fix the regulatory infrastructure problems. We need proper and consistent tax and fiscal policy. Intelligent industrial policy, which include proper R&D in things like broadband, AI, et cetera. Thoughtful trade policies, which should enhance the economy of the United States and the world. Maintain a strong financial system, proper immigration policies, affordable housing, which is now out of reach for many Americans. And then we have specific programs, very specifically identified policies to help assist the Black and Latinx communities. The cumulative multiyear effort of doing just some of these measures I described will lead to a healthier, more resilient, robust and fair America. Sometimes, we forget how blessed we are. America is in a very strong position, and we have the resources to emerge from this latest economic crisis as a stronger country. America is still the most prosperous nation the world has ever seen. And my fervent hope is that we roll up our sleeves and bring leadership to our self-inflicted problems. As we work together for an inclusive recovery that is long-lasting, we must never forget that America's economic prosperity is a necessary foundation for our military capability, which keeps us free and strong and essential to world peace. America is still the arsenal of democracy. Let me close by thanking our more than 250,000 employees for the exceptional work they have done in this difficult year. Everyone, you should keep being safe. Back to you, Stacey.

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 shareholder questions regarding those proposals, including questions that were submitted prior to the meeting. It is after the polls have closed that we'll hold a 30-minute general Q&A period during which we will address general questions, including any that were submitted prior to the meeting. I'll now move all of the management proposals as set forth in the proxy statement. These are four: number one, election of the 10 nominees listed in our proxy statement as directors; number two, an advisory resolution to approve executive compensation; number three, approval of an amended and restated long-term incentive plan effective May 18, 2021; and number four, ratification of the independent registered public accounting firm, PricewaterhouseCoopers. I'll now ask the shareholder proponents to introduce their proposals. Proponents, as stated in our rules of conduct for this meeting, we do ask that you limit your time to 3 minutes and confine your comments to the subject matter of the proposal being presented. The first proposal is #5, to improve shareholder written consent. It was submitted by John Chevedden. We've been advised that he is here to present the proposal. Mr. Chevedden, are you on the line?

This is John Chevedden. Can you hear me okay?

Yes. All good. Please go ahead.

Proposal 5, improve our current useless shareholder right to act by written consent. Shareholders request that our Board of Directors take the steps necessary to enable 10% of shares to request a record date to initiate written consent. This proposal topic just won majority support at BorgWarner on April 28. Our current version of written consent like the BorgWarner written consent is useless and would not be used by any group of shareholders in their right mind. If you have voted against this proposal, please consider changing your vote before the polls close. Why would any group owning 20% of our stock seek to do so little as to get a date on the calendar for management when the same group of shareholders with less effort can compel management to hold a special shareholder meeting on a topic of their choosing? Door #1 is the date on the calendar for management that shareholders can frame and hang on the wall, and door #2 takes less effort and compels management to hold a special shareholder meeting. This door #2, a special shareholder meeting is the clear choice, and our current written consent is thus useless. Clearly, shareholders were made aware of the uselessness of our current right deck by written consent would not approve it. Yet management claims that shareholders did approve it. This shows how management abuse shareholder outreach by withholding key information on written consent in order for management to claim they got shareholder approval. Management failed to mention that there is no formal process to remove false text for management statements next to a shareholder proposal. Thus, management gets a free ride that includes false statements next to a shareholder proposal. However, there is a formal process for management to remove false text from shareholder proposals that is overseen by the Securities and Exchange Commission. Management made no such attempt in regard to this proposal. Management talks about a so-called shareholder outreach plan. It is important to emphasize that such an outreach plan is not transparent, has no objective oversight and depends 100% on whatever honor system management has in reporting the outcome of shareholder outreach. JPM has the chutzpah to brag about shareholder outreach and then forces shareholders to pay for glossy advertisements imposing shareholder proposals that gain significant shareholder support. Please vote yes, proposal 5, improve our current useless shareholder right deck by written consent.

Thank you for that. We oppose this resolution. Our reasons for doing so appear on Pages 99 and 100 of the proxy statement. We'll now turn to proposal 6. It was submitted by CtW Investment Group. We've been advised that Ms. [ Patel ] will present this proposal. Ms. [ Patel ], are you on the line?

Yes, I am. Can you hear me?

Yes, please go ahead and start.

Okay. Thank you. On behalf of the CtW Investment Group, I hereby move Proposal 6, requesting the Board of Directors oversee a racial equity audit based on input from stakeholders. A racial equity audit will help JPMorgan identify, remedy and avoid adverse impacts on non-white stakeholders and communities of color, particularly in light of its $30 billion commitment to address racial inequality. When it comes to addressing racial inequality in the communities it serves, JPMorgan has a controversial history. Over the years, regulators have levied numerous fines against the bank related to racial imbalances and its mortgage lending practices. There continues to be a lack of racial diversity in the bank's most senior leadership, and JPMorgan appears to be failing to hire, develop and retain employees of color, particularly amongst its management ranks. We continue to see that JPMorgan's policies have had an effect on minority-owned businesses, as shown by the bank's inequitable application requirements for PPP loans during the early days of the COVID-19 pandemic. The disparate impact of JPMorgan's practices in communities of color continues even today. Community leaders are currently calling on JPMorgan to waive a $9 million interest payment to a loan made to the City of Chicago because there are plans to redirect Federal funds intended to assist black and brown communities that were hardest hit by COVID towards repayment of the loan to JPMorgan in order to avoid the hefty interest payment. An audit of this nature would provide an objective assessment of the bank's lending, human capital management and philanthropic practices. The proposal looks to evaluate the effectiveness of the company's policies in addressing racial inequality. And we do not believe that existing regulatory requirements or inspections are sufficient to ensure that JPMorgan is meeting its commitments. As with any other operational or financial reviews, the real benefit of the racial equity audit lies in its independence. The auditor must have a civil rights background in order to produce credible and useful information. The objective perspective and civil rights expertise required cannot be provided by management, internal counsel or the Board. For JPMorgan and its investors, the racial equity audit is an important risk management tool. In the banking industry, trust is paramount. Changes in public, consumer and employee sentiment have put systemic racism and racial injustice at the forefront of our national dialogue. Concerns about reputation and talent attraction have prompted other major consumer-facing companies, such as Facebook, Starbucks and Airbnb to conduct these types of audits. The racial equity audit is an important investment in JPMorgan's long-term sustainability and value protection. JPMorgan has committed $30 billion to address racial inequality. Given such a significant sum, investors need assurances that the bank's policies are effective at addressing these issues and that JPMorgan is not acting in other ways that could negate any positive impact. Therefore, we urge shareholders to vote for Proposal 6, requesting that the Board oversee a racial equity audit. Thank you.

Thank you. We oppose this resolution, and our reasons for doing so appear on Pages 101 and 102 of the proxy statement. We'll now turn to Proposal 7. Mr. Chevedden, I understand you're going to present this proposal. Are you still on the line?

Yes. This is John Chevedden. This is Proposal 7, the Independent Board Chairman, sponsored by Kenneth Steiner. Shareholders request that our Board of Directors adopt as policy and amend the bylaws to require that the Chair of the Board of Directors, whenever possible, to be an independent member of the Board. This policy could be phased in for the next CEO transition. This proposal topic won 52% support at Boeing and 54% support at Baxter International in 2020. Boeing adopted this proposal topic in June of 2020. 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 in our company. The role of the CEO and management is to run the company. The role of the Board of Directors is to provide independent oversight of management and the CEO. Thus, there is a potential conflict of interest for a CEO to have the oversight role of Chairman. After Lee Raymond finally retired as Lead Director at age 82, we now have Mr. Stephen Burke as Lead Director. Mr. Burke was runner-up in getting the most against votes at our 2020 annual meeting. Mr. Burke has 17 years long tenure on JPM Board. Long tenure is the enemy of director independence, and director independence is the most important attribute of a lead director. Mr. Burke is also a former CEO. Being a former CEO can make Mr. Burke the champion of CEO rights at the expense of shareholder rights. People tend to favor members of their peer group. This proposal topic won a 41% support at the 2020 JPM Annual Meeting. This was close to or above majority support from the shares that have access to objective proxy voting advice. Unfortunately, most small shareholders do not have access to objective proxy voting advice. Management is thus getting a free ride on the backs of the small shareholders who do not have access to objective proxy voting advice and are then forced to rely on the self-serving management recommendation. Management promotes the fallacies that shareholders should be apathetic about increasing management accountability to shareholders with this proposal simply because JPM has the average governance practice that a lot of other companies have. The unfortunate attitude of the management is that since JPM is average on accountability to shareholders, the management goal is to [ back ] improvement. The 41% support in 2020 for this proposal topic was in spite of JPM management having its hand on the scale by forcing JPM shareholders to pay for glossy advertisements opposing this proposal topic. Shareholders were again forced to pay for management glossy advertisements opposing greater accountability to shareholders in this proposal today. Please vote yes, the Independent Board Chairman, Proposal 7.

Thank you. We oppose this resolution and our reasons for doing so appear on Pages 103 and 104 of the proxy statement. Our final proposal is #8. It was submitted by Rhia Ventures on behalf of Jon Weinstock. We've been advised that Shelley Alpern will present this. Ms. Alpern, are you on the line?

Yes. Can you hear me correctly?

Yes, you want to go ahead?

Thank you. Good morning, Mr. Chairman, Board of Directors and my fellow shareholders. This proposal asks JPMorgan to make a regular practice of examining its political contributions to ensure that they are congruent with the company's values and policies and to report out on this review. This proposal received 47% in support at Pfizer last month. Events in recent months have made it very clear why this makes sense. After the January 6 attack on The Capitol, corporate donations to the politicians in Congress who challenged the election results came under nationwide scrutiny. That scrutiny has now broadened to include ties to politicians who support voter suppression legislation. Public records show that in 2020, JPMorgan made at least 30 contributions to members of Congress who challenged the election results. These are the first issues that reveal how risky it is for corporations to engage in political spending, and they won't be the last. Mr. Weinstock's resolution notes that Bloomberg News reported last fall that 1/2 of JPMorgan's political spending in the 2020 election cycle had gone to candidates the article characterized as "ardent obstructionist of proactive climate policy." Public records also reveal how over the last 3 election cycles, JPMorgan has contributed at least $2.8 million to at least 268 candidates and political committees that are working to weaken access to women's reproductive health care, a contradictory stance for a company that invests in programs to improve its retention and promotion of female employees. JPMorgan also gives to politicians who oppose LGBT equality despite its excellent policies on workplace inclusion. After January 6, JPMorgan was reported to be pausing all PAC donations in the coming months. This is a step in the right direction, but we urge senior leadership to think beyond band-aid solutions that don't get to the heart of the problem. And the problem is that political contributions never succeed in just advancing their business interests. Inevitably, there is collateral damage. They are inherently fraught with reputation and brand risks. There really are only 2 sustainable options going forward. Don't make political contributions or tie them to deeply held, clearly articulated organizational values. This is consistent with the business roundtable's 2019 declaration under the chairmanship of Mr. Dimon, that companies must balance the drive for profits with the needs of customers, employees and communities. Our country and our world face daunting challenges that demand that the business community act with integrity and consistency. Fellow shareholders, if you have not already cast your vote, please vote yes on item #8. And thank you for your attention.

Thank you. We oppose this resolution, and our reasons for doing so appear on Pages 105 and 106 of the proxy statement. And that completes the introduction of the shareholder proposals. We oppose them for the reasons set forth in the proxy. If anyone has questions regarding any of the proposals, please submit them now using the Q&A field on the website. I would now like to invite Reggie Chambers, our Head of Investor Relations, to read questions from our shareholders, particularly those we've already received.

Thank you, Stacey. Our first question comes from shareholder [ Dion Puccino ] and relates to shareholder proposal 6 on a racial equity audit and report. [ Dion ] asks, why would the Board recommend voting against the racial equity audit and report?

Thank you, Reggie. This is Jamie. The firm is committed to maintain a culture of respect and inclusion and to advancing rational equity, and we've taken significant steps to combat systemic racism in the communities in which we are present. We believe we are taking appropriate action to address the issues raised in the proposal, and we've embarked on an effective path forward. The work to advance racial equity is complex, and we're determined to get it right with our Board providing oversight of our progress as we execute our strategy around diversity, equity and inclusion. In addition to Board oversight, we get feedback and input from internal organizations and from key independent external organizations that are focused on civil rights, human rights and consumer advocacy as part of our efforts to shape and inspect our progress in racial equity commitment. Tracking our progress and sharing periodic updates publicly is part of our commitment. This transparency is another key element of our rate -- of our commitment. Given this, conducting an additional racial equity audit at this point in time do not provide us with meaningful additional information. We believe our shareholders will be better served by the firm's vigilant focus on building on current momentum to maintain a culture of respect and inclusion and advancing racial equity and related reporting. Thank you.

Great. Our next question is also about shareholder proposal 6 on a racial equity audit and report. A shareholder who chose not to provide her name asked, who keeps submitting racial equity audit proposals and how many shares do they have?

Thank you, Reggie. The shareholder proposal #6 on the racial inequity audit and report was submitted by CtW Investment Group, and they've satisfied the minimum shareholding requirement set by the SEC to be eligible to submit a shareholder proposal.

Great. Thank you, Stacey. We have now addressed the questions that were submitted with respect to the proposals.

Thanks, Reggie. We have now completed responding to the questions on the proposals. It is now 10:33 a.m., 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 will be reported on a Form 8-K that will be filed with the SEC, along with the minutes of the meeting. With respect to the election of the directors, all directors were elected, and each director received the majority of the votes cast for and against. No director received less than 91.6% 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. The votes for the approval of #2, advisory resolution to approve executive compensation, was 90% for. The vote to approve the amended and restated long-term incentive plan effective May 18 was 96% for. The votes for ratification of our independent registered public accountant was 95% for. The votes for proposal to improve shareholder written consent was 47% for. The votes for proposal on a racial equity audit was 39% for. The votes for the proposal on Independent Board Chairman was 48% for. The votes for proposal on political and electioneering expenditure congruency report was 29.6% for. That concludes all of the formal business. Jamie, if you want to call to adjourn the meeting, now is the time.

Stacey, thank you. This concludes the business of the meeting, and the 2021 Annual Meeting of Shareholders -- Stockholders is hereby adjourned.

Thanks, Jamie. We're going to respond now to general questions and comments submitted by shareholders. As mentioned earlier, we're going to allow 30 minutes to respond to general questions. As a reminder, if you have questions about the services we provide or questions in regard to a personal matter, we will be responding to those questions separately after the meeting. Reggie, would you please read the questions?

Sure. Thank you, Stacey. A shareholder named [ C. Cook ], submitted the following question. News reports suggest that big banks will no longer be friendly toward fossil fuel companies. As a long time and continued investor in this type of energy, it is becoming a concern that major banks could cause great harm to these companies. Is this true as we have recently seen in the news? Thank you for your response.

Meeting the needs of our clients is a top priority for the firm, and we will continue to support clients with the capital and strategic support they need as they navigate the low carbon transition. The challenges we face in combating climate change is significant and we recognize the role of continued reliance on resources such as oil and natural gas until commercial, affordable and low-carbon alternatives could be developed to meet all of our global energy needs. The solution is not as simple as walking away from fossil fuels, which is why we're leaning in and working with our clients in these industries in developing solutions. We've announced our aim to facilitate more than $2.5 trillion over the next 10 years on sustainable development and we're growing capacity in our business -- business to support these needs, such as with our new Center for Climate Carbon Transition and Green Economy Team. This is about doing what's right for the environment, but also what's right for our clients and business.

Our next question was submitted by shareholder, [ James Box ], who asked, the bank had an excellent first quarter. Prospects for the balance of the year are bright. And 2020 reserves for the pandemic are being released. Hence, is the Board considering raising the dividend in 2021?

Thanks for your question, [ James ]. When we think about the dividend, it's important to remember that our capital use hierarchy hasn't changed. First and foremost, we use our capital to invest in our businesses, communities and employees. After all prudent investments have been made and we may still have excess capital, the best thing we can do with this excess capital is return it to shareholders through dividends or buybacks, subject to regulatory capital requirements. Beyond that, we won't comment on future dividend actions. These decisions are sometimes influenced by regulators and always up to our Board.

A shareholder who submitted a question without providing her name asked JPMC spends a lot of money, time and effort to put forth a green or environmentally conscious agenda. However, employees are also being asked to come back to the office, creating commutes. Commuting will increase emissions. That's bad for the environment in a number of ways. How is the company planning to adjust for this unnecessary climate cost?

To this shareholder, 100 million people go to work every single day and have been for the last year. That includes firemen, police, sanitation, hospitals, the United States military, manufacturers, retailers, our branches, et cetera. We think it's time to go back to work. And we're going to do it safely and intelligently and attack the climate problem with material ways, not ways to stop commuting to normal work.

Our next question was submitted by shareholders who did not provide their name. This was presented by several shareholder questions on the same topic. What steps are being taken to have a more diverse board of Directors?

Information about the composition, attributes and diversity of our Board is available on Pages 12 and 13 of the proxy statement. When recruiting Director candidates, the Board looks for candidates with a diversity of experience reflected in view points, including diversity with respect to gender, race, ethnicity and nationality. For example, over the last 3 years, we recruited 3 highly qualified new directors and it just so happened all 3 are women.

We have another question that was submitted by a shareholder who did not provide her name. This shareholder asked, how do you justify the very large compensation packages for your Board of Directors of both cash and stock? I realize that shareholders essentially pay to have you make sure the stock performs well. However, are you including the performance of the stock first in your compensation packages?

The Governance Committee annually reviews the Board's responsibilities and director compensation against the practices of peer firms and makes any recommendation to the Board. Our director compensation program is unchanged since 2017. A significant portion of Director compensation is limited stock, which directly aligns with shareholder interest. Additionally, directors are required to retain all shares purchased and received along the Board and may not hedge or pledge JPMorgan stock with further strength of the alignment with long-term shareholders.

Great. We received multiple shareholder questions about political activities and statements of the firm's management. One of these questions, representative of the topic, was submitted by shareholder [ David Moore ], who wrote, why has the company been visible and vocal specific to political issues? JPMC has shareholders and employees on both sides of the aisle, and voicing a stance in either direction is only going to cause more division.

In response to Mr. [ Moore ] and other shareholders who have asked similar questions, we recognize that our employees, our clients and our shareholders have different views on many issues. First and foremost, we deeply respect and welcome all points of views in an effort to have a constructive dialogue on the policy challenges we face as a company and as a nation. Because these challenges are so important, JPMorgan Chase believes that responsible corporate citizenship demands a strong commitment to healthy and informed democracy through civic and community involvement. Our business is subject to extensive laws and regulations and change in such laws can significantly affect how we operate our revenues in the closing curve. Because the impact public policy can have in our businesses, employees, communities and customers, we engage with policymakers in a range of issues, including banking, financial services, cybersecurity, workforce development, small business, tax trade and inclusive economic growth, among others, all to advance and protect the long-term interest of the firm. More important, we believe companies like ours have an obligation to put their business to work for all of these -- all the stakeholders. For our firm, this means we're leveraging our business and policy expertise, data capital and global presence to help drive inclusive recovery, expand access to economic opportunities and accelerate sustainable climate solutions.

A shareholder named [ Clive Branford ] submitted the following question. Is there any plan to have a stock split in the future? And what would be the criteria for implementing the split?

We have no plans to do one in the immediate future, and the Board looks at this periodically.

We received multiple shareholder questions about cryptocurrency. The first is from [ Cecilia Guso ] who asked, what is the company's policy on cryptocurrency?

Complex question. We use the blockchain here, which is a technology -- not necessarily cryptocurrency. In cryptocurrency, we think that the regulators and the legislators are looking at product rules and regulations of how cryptocurrency should be treated. A lot of our clients are asking, can we help them buy or sell cryptocurrency, and we're investing in that as we speak.

Our next question is also about cryptocurrency. [ Sergey Olusov ] asked, what is JPMorgan Chase doing in anticipation of a federal digital currency? What effect will such a change have on financial institutions such as JPM?

Yes. We are closely monitoring the situation and central banks around the world are looking at it. And depending how they implement it, it could have anywhere from small to large effects in the firm. And when we have something to report on it, we will report to the shareholders on it.

Next question. Multiple shareholders ask about executive compensation. A representative question comes from a shareholder named [ Whitten Knapp ], who asked why are the executives of the company receiving such high compensation packages?

JPMorgan Chase has 250,000 employees and we need some very talented employees who have made choices to work elsewhere to work here to make sure we do the best we can for our company. And that's across the whole spectrum, with lawyers, technologists, engineers, investment bankers. There are always choices, and we try to be very fair about compensation across the full board. I should also point out that starting salaries at this company is something like $33,000 a year, which does not include $10,000 to $13,000 of benefits, which include medical, retirement, et cetera. So -- and all of those folks are given opportunity to grow and expand their careers while they're here. So we try to be very good to all of our employees.

The following question, also about employee compensation, was submitted by a shareholder who did not provide their name. During the pandemic, our company has successfully conformed to remote BAU. However, although our company has done well during these circumstances, it appears as though lower-level employees, 602 and below, received minimal to any annual incentive compensation, which is a bit disheartening. Can you please advise why this has occurred? Those employees that are 602 and below are the employees holding the company together, doing the work and working 12-plus hour days remotely while also caring for children.

I don't really disagree with what the person said. We're deeply appreciative and grateful for employees' hard work, dedication, perseverance, especially in a year we had to quickly adapt to fundamental new ways of doing business. This special note of gratitude goes out to our frontline colleagues who've been diligently serving our clients, customers and each other during the COVID-19 crisis. We also recognize that many of our employees have been facing personal obligations, parents and caregivers, for example. We appreciate the way our employees have managed these responsibilities and know that it hasn't been easy. We remain committed to support our employees and its families. Examples of our efforts in 2020 include: we raised the minimum wage for U.S.-based overtime-eligible employees between $16 and $20 an hour, depending on where they work, while providing annual benefits package worth about $13,000. We made a special $750 -- special award to employees earning less than $60,000 from 401(k) contributions in the U.S. We launched a lifelong learning education benefit program with employees -- which provides employees access to 300 accredited programs. We increased paid leaves provided to nonprimary parental caregivers following the birth or adoption of a child. We provided additional benefits and support for employees and their families during the pandemic. For example, we awarded over $100 million in special payments to employees whose jobs required continuing on-site work with a focus on those with annual compensation of less than $60,000. We enhanced our paid time off policies, including an additional 5 days off for all employees to handle COVID-related challenges, 14 days if the employee contracts or is in close contact with someone who contracted COVID-19. We provide additional support for our employee with childcare needs. We increased the number of covered mental well-being assisted sessions. And we provide additional resource support for coping with the challenging topics such as topics of fear, anxiety and loss.

A shareholder who did not provide their name submitted the next question. Which group, customers, rank and file employees, shareholders, management, do you feel will be most greatly impacted by the proposed increase in the corporate tax rate? Why? What effect will it have on the profitability of the company as a whole?

So obviously, if the tax rate goes up, it will reduce the profitability of the company. But I think a far more important issue is the United States, if you want to maximize healthy growth in the United States, we need to have a competitive international global tax system. And that's been our focus, to make it internationally competitive and fair to maximize growth in the United States. The more healthy growth in the United States, the better it is for all Americans.

Our next question comes from shareholder [ Mark Dubeau ] who asked, what is the bank's outlook for net interest margin based on current 10-year bond yields?

We would expect it to grow up marginally over the next couple of years if they stay where they are.

Shareholder [ Lila Hopeman ] submitted our next question. [ Lila ] asked, being able to compare finance emissions across global financial institutions is of critical importance to investors. Consensus is converging on the partnership for carbon accounting financials, PCAF. What would it take for JPMorgan to join its peers and commit to PCAF? Will JPMorgan provide a clear transition plan as to how it will reach its Paris-aligned banking commitment and clarify whether this means the company aims for net 0 financing emissions by 2050?

We've already provided our clear transition plan. We made our Paris Alliance Finance Commitments last fall. It is now set and we announced initial targets. We published our Carbon Compass Methodology in our recently released ESG report. We said we're going to include new sectors in our commitment over time, and we'll keep you all updated on our progress. This shows we're not just saying the right thing, we're doing the right thing.

Our next question comes from a shareholder who did not provide their name. The shareholder asks, since CEO James Dimon is on the Presidential Committee of Economic Advisers, I would respectfully request that Mr. Dimon urge the Biden administration to be a little less aggressive with government spending. The U.S. has already had 2 multitrillion dollar stimulus packages within the past calendar year. I'm hoping that the U.S. Treasury Secretary, Janet Yellen, is pushing for a more balanced spending approach. Inflation getting out of control is one of the current fears of Wall Street and investors, many of whom have retirement savings tied into those accounts. Thanks for your leadership and influence in the U.S. economy.

I'm not on a council of economic advisers or any formal government body providing value to the administration. I have noted the President spoke with the administration officials but not in any form of advisory capacity. Regarding the substance of the question, I do believe the public policy to take into consideration concerns over ways of spending and inflation or recognizing the importance of public investment. I think it's very important. And I can't emphasize this, how we spend it -- we need to not just spend the money, spend it wisely. If we spend it wisely, it will help with healthy growth, it will help productivity and will help Americans. If we spend it poorly, which has been the history of this country, by the way, if we spend it poorly, it will make growth less, productively lower and inflation higher.

Great. The following question concerns the financing of a pipeline and was submitted by [ Myka Bennett ] of the #StopEACOP Coalition. I'm asking a question on behalf of the #StopEACOP Coalition, an alliance of local groups and communities and, in absence, international organizations. The East African Crude Oil Pipeline is a proposed 898-mile heated pipeline through Uganda and Tanzania. Construction of the pipeline threatens to enable the opening of critical ecosystems, including the Murchison Falls National Park, to oil extraction. It will cause large-scale displacement of communities and pose grave risks to protected environments, water sources and wetlands in both countries in addition to releasing massive amounts of carbon. The net 0 pathway announced today by the IEA confirmed that new fossil fuels projects like these are incompatible with keeping global heating at or below 1.5 degrees. Can the bank confirm whether or not it plans to finance the East African Crude Oil Pipeline?

Reggie, thank you for asking the question. I don't know the answer to it. I'm going to -- you can -- Reggie will get back to you.

You got it. All right. The following question concerns CEO pay and was submitted by a shareholder who did not provide their name. What is the total CEO pay for 2020 and for 2019?

It was $31.5 million in both years, most of which is in stock, which is performance-based.

The following question concerns accounting rules and regulations and was submitted by [ Mark Fashion ]. How will the company approach CECL in 2021 and beyond?

Well, we've made extensive disclosure about CECL, and I just refer you to the disclosure that we made in the past.

Awesome. The following question is submitted by [ Saida Afrin ]. In 2015, JPMorgan committed to not support the global controversial Adani Carmichael coal project in Australia. However, JPMorgan is continuing to support Adani by raising capital for other companies such as Adani ports, which is part of the Carmichael project, owning the port and rail haulage of coal operations. Earlier this year, Adani Ports was removed from the Dow Jones Sustainable Index after its involvement in the Carmichael project and its business dealings with the Myanmar military were highlighted. Why does JPMorgan still consider this company fit for financial support?

We are going to have to get back to you on that one.

The following question comes from Scott Shepard. I'm Scott Shepard with the National Center for Public Policy Research. In response to a question posed by a colleague of mine at the 2019 meeting, you asserted that, "We have not -- we have not and do not debank JPMorgan Chase customers in response to their political activities." Can you again confirm that you do not debank for political reasons? And can you explain in detail the circumstances in which accounts are shut by senior management demand without explanation?

I can confirm that we don't debank people for their political considerations. People are debanked usually because we file suspicious activity reports and there is suspected ill behavior regarding money laundering, women trafficking, sex trafficking and criminal activities, et cetera. We are required by law not to tell why we're closing the account.

We received multiple shareholder questions about cutting emissions and financing of fossil fuel companies. One of these questions, representative of the topic, was submitted by shareholder [ Jordie Giaconia ] who wrote, we must cut global absolute emissions in half by 2030 if we are to limit climate change to 1.5 degrees. President Biden last month committed to cutting U.S. emissions in half by 2030. But JPMorgan Chase's new 2030 targets, which are limited to carbon intensity, are fully compatible with increasing absolute emissions. Ahead of the COP 26 climate talks in Glasgow, is JPMorgan Chase committed to cutting the emissions coming from its fossil fuel portfolio at least in half by 2030?

We've recently made some announcements about what we're doing, and we think we'll be able to accomplish something like that. If you look at what we're doing, it's very detailed, very mature. I just want to point out to our shareholders even -- and we're in favor of doing these kind of things, intelligently reducing carbon intensity. But even if the margin gets down to 50%, and India and China don't get it down at all, and they have under Paris, if you remember that they have no obligation in the Paris Climate Accord to reduce CO2 at all. In fact, they'll probably increase it dramatically for the next 10 years. Then you won't accomplish anything about trying to help our climate.

The next following question is on the topic of political contributions, and it comes from [ Douglas Cha ]. Will the company continue to refrain from making political contributions to members of Congress who voted against the certification of the 2021 U.S. presidential election and maybe even dissolve the corporate PAC as Charles Schwab and other competitors have done?

We are definitely not going to dissolve the PAC. We think being part of the political process is a good thing. I would not be against getting into the PAC. If everyone were attacked over the PACs, then I think we see there a perfectly reasonable -- legislators would have to make that possible. We are going to be announcing soon how we're going to operate the PAC. We believe in democracy, so it does not mean that every time we disagree with someone, that we're not going to give money or engaged in dialogue with them. And this is always democracy, folks. You don't have to agree with people to sit at the table with them and have conversations about what's good for the United States of America. So we'll make clear the base in which we will continue to make contributions.

The following question relates to stakeholder capitalism and it's from Gerald Matthews. Mr. Chairman, Gerald Matthews again from the United Brotherhood of Carpenters. The topic of shareholder capitalism as an alternative to shareholder capitalism has received considerable attention recently. As long-term pension fund investors, the Carpenter Funds appreciate the sentiments embodied in the stakeholder capitalism perspective but feel that execution could be complicated. Could you discuss the Board's perspective on the concept of stakeholder capitalism and what principles the board would use to balance the interest of various stakeholders as it develops and it implements the company's long-term business strategy? Thank you.

I think when people talk about shareholder capitalism, they get confused with short-term profit taking or profit taking as a way to build a company. It's ironic, that's the worst way to build a company. You cannot build a company if you do not do a good job for customers over time. Customers do not have to come back with loads of choices. You cannot build a great company if you don't have great employees, which takes years of training and building up the right kind of employees over time. You cannot build a great company if you aren't accepted and trusted in the communities in which you operate. You don't have to weigh and balance them or you have to do them all. It's kind of like a team. Every point has got to do their part well. If you fall on any one part, the company can fail.

The next question relates to coal -- our coal policy. It comes from [ Jason Dusterhoft ]. Yesterday, the presidency of the Glasgow Climate Conference called for private finance institutions to, among other ambitious commitments, commit to phasing out coal before the conference in November. JPMorgan Chase's coal policy lag behind U.S. and global best practice. Your bank has no commitment to exit coal power and no restrictions on financing companies to be building new coal power, unlike Citigroup and a number of global banks. Your bank's coal mining phaseout threshold of 50% of revenue is very high, allowing continued financing of major miners like Glencore. By the UN Climate Conference in Glasgow in November, will JPMorgan Chase commit to phasing out all coal finance, including power and mining as well as prohibiting financing for companies expanding coal?

And just -- I mean for this show, I just like to point out that you can have all the banks in the world not finance coal companies. But they may be financed by private companies, international investors, et cetera. We have terrific policies in place that will dramatically reduce the carbon intensity of coal producers, and we're helping some of the coal producers in their transition too. So these assets specifically help them get more into renewables and things like that. We've made a lot of commitments that we think are intelligent and wise and well described. And we think a lot of people made commitments that we don't actually even understand what they are.

Next question relates to financial literacy, in particular in urban poor communities. This comes from [ Tom Wang ]. His question is coming from a rural area near Columbus, Ohio, I recently encountered a man who describes his child's 4-H project, where the child raised some ducks and later sold them after a year. It was a teaching about working, saving and investing. Will JPM want to try this approach in the urban poor communities, something like a 4-H urban program for urban kids to learn about capitalism?

I would have to look into this. It is -- sounds interesting, but we do believe in the concept of financial education. So if you look at our new community branches, in which we have 6, we have a hall in L.A., in New Orleans, in Chicago. Part of the point of a community branch is to have people come in and learn about savings, investing, financial education. We're also asking governments, teachers, schools, K-12 to start teaching financial education. We think it's important that the American public understands what investing and saving is all about.

Great. We have another climate change-related question. This comes from [ Mariela Montiero ]. JPMorgan Chase has committed to strengthening its palm oil restrictions to require producer clients to adopt no deforestation, no peat, no exploitation, NDPE policies. This is a welcome move, but palm oil constitutes just 10% of JPMorgan Chase's forced risk financing. Pulp and paper constitute 70%. And beef, rubber, saw and timber are crucial as well. By the UN Climate Conference in Glasgow in November, will JPMorgan Chase extend its NDPE policy to encompass the full range of forced risk commodities?

The answer is no. But we are looking at how those industries should be incorporated in our carbon transition policies.

Great. The next question comes from Adam Neville. Good morning, all. My name is Adam Neville, and I'm attending today on behalf of Future Coalition and as an organizer within the Youth Climate Justice Movement. Chase's first banking program is targeted at young people under 18, arguably with the objective of creating lifelong customers. However, young people are becoming increasingly aware and critical of Chase's assistance on financing fossil fuel companies like Enbridge, which is building the Line 3 tar sands pipeline. Young people are looking for more ethical banking options and are increasingly skeptical of big climate commitments. To respond to this emerging demand of young customers for banking that respects our plans and indigenous sovereignty, will Chase commit to stop financing companies that are expanding fossil fuels and abusing indigenous rights?

I think first, the question has nothing to do with the age of the person. I think we've already described our climate policies, which we think are detailed, and profit policies for our country going forward that can actually help solve the problem.

Great. The next question comes from a shareholder who did not provide their name. Are there programs to encourage employees to be vaccinated?

Well, we've been quite clear. I think -- I want all of our employees vaccinated. We've not mandated it, but we want all our employees be vaccinated. And we think it's the right thing to do, not just for themselves, but for all of the people inside the company, and we will consider at one point mandating it if it becomes legal.

Great. The next question comes from Alderman -- Alderwoman of the City of Chicago's 33rd Ward, Rossana Rodriguez Sanchez. JPMorgan provided a loan to the City of Chicago in December. That was a $9 million per year interest payment. Currently, there are plans to redirect almost $500 million in Chicago's federal recovery money, which is intended to help black and brown communities in order to avoid the interest payments to JPMorgan. In light of the company's pledges to racial equity, will JPMorgan commit to waive the interest and CEO Dimon meet with me and members of my community to talk about how we can ensure our relief line goes towards the recovery for our hardest hit communities?

First of all, I'm a native of Chicago. I miss the city, and I'd be happy to have a meeting with the proper people on this issue. I don't know about the specific issue that you just raised. We'll look into it, and we'll be happy to get back to you.

Reggie, maybe we have time for one more question.

Perfect. Last question is from [ Mark Fashion ]. Is it harder for a bank of your size to deal with the efficiency ratio?

Not really, I think we have very strong economies of scale, which leads to a good efficiency ratio. But I want to point out that we're not only trying to improve this. We take a lot of our profits, et cetera, and reinvest them in future endeavors.

Thank you. Our discussion period has now concluded. If you submitted a question that was not responded to or would like additional information, we invite you to contact our Investor Relations team at the e-mail address included on the website. Jamie, would you like to say a few words in closing?

Yes, Stacey. We greatly appreciate the views of all of our shareholders and how thoughtful they were engaging us in this process. The entire Board 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 best-in-class in every way. Thank you all for being on this call.

This concludes today's web conference. You may now disconnect.