JPMorgan Chase CEO Jamie Dimon will begin selling 1 million shares of the bank he manages next year, according to a filing on Friday.
The idea raised speculation that Dimon, who has run JPMorgan since 2005, is thinking about retiring. A spokesman for the New York-based bank said the transaction had nothing to do with succession planning and that Dimon has “no current plans” for another sale, but his demands may alter in the future. The bank’s stock fell 2.9% in early trading.
Here is the bank’s statement:
Jamie Dimon, Chairman and CEO of JPMorgan Chase, stated today that he and his family want to sell a portion of their JPMorgan stock for financial diversification and tax planning considerations. They now propose to sell 1 million shares beginning in 2024, subject to the provisions of a stock trading plan. This is Mr. Dimon’s first stock sale since joining the corporation.
Mr. Dimon remains confident in the company’s potential, and his stake in the company will remain substantial. He and his family presently own about 8.6 million shares, and he also has unvested Performance Share Units worth 561,793 shares and Stock Appreciation Rights worth 1,500,000 shares, subject to the terms and conditions of each issuance.
Mr. Dimon will sell his shares using stock trading strategies in compliance with the guidelines outlined in Rule 10b5-1 of the Securities and Exchange Act of 1934. JPMorgan CEO Jamie Dimon plans to sell one million shares in the bank next year, marking the first time he has lowered his holdings in the company since entering nearly two decades ago.
At current market levels, the sale would net him more than $140 million (€132 million), despite the fact that he and his family would retain almost 7.6 million shares. Mr Dimon’s stake in the company is worth $1.4 billion, including options.
JPMorgan Chase stated in a regulatory statement that the sale was for “financial diversification and tax-planning purposes,” and that “Dimon continues to believe the company’s prospects are very strong, and his stake in the company will remain very significant.”
The sale raises questions about how long Wall Street’s longest-serving CEO intends to remain in the post. James Gorman, Mr Dimon’s adversary at Morgan Stanley, revealed this week that he will step down as CEO at the end of the year. Mr Dimon had “not sold a single share of JPMorgan Chase common stock,” according to JPMorgan chase.
According to a bank spokesperson, the sales had nothing to do with succession planning, and Mr Dimon “has no plans to enter into another such sale, but will of course consider his financial planning needs over time.”
The 67-year-old banker, who is also the chairman of JPMorgan Chase , joined the company when it purchased Bank One in 2004. He was appointed chief executive of JPMorgan Chase at the end of 2005, and a year later he was named chairman and president.
By holding company stock for over two decades, Mr Dimon has followed in the footsteps of his former mentor at Citigroup, Sandy Weill, who imposed a “blood oath” among senior executives, prohibiting them from selling shares until they left.
Nonetheless, a Financial Times investigation of bank share sales in 2015 discovered that the practice was not widespread on Wall Street. In the years following the financial crisis, some CEOs sold tens of millions of dollars in stock.
Mr Dimon owns almost 2 million share options in addition to his bank equity. In 2021, the board granted Mr Dimon 1.5 million stock appreciation rights in recognition of his “continuing, long-term stewardship of the firm, leadership continuity, and management succession planning amid a highly competitive landscape for executive leadership talent.”
The stock appreciation rights granted two years ago were a type of option that would be exercisable beginning in July 2026, with Mr Dimon required to hold any shares until July 2031. However, the award did not go down well with shareholders.
During his tenure as CEO, the bank’s stock has increased by 250 percent, giving the company a market capitalization of $410 billion. Mr Dimon made a personal investment in JPMorgan chase stock in 2016, purchasing half a million shares for slightly more than $25 million. The stock price has risen by 160 percent since then.
Mr Dimon endorsed JPMorgan chase shares after a promotional reel was aired at JPMorgan’s investor day in May 2022, adding “I would buy that stock.” At the time, the bank’s stock was trading about $120 per share. They are currently trading around $140.
When asked months later on a conference call with reporters if he had any plans to buy more stock, Mr Dimon answered, “I already own plenty of stock.” I believe the company is great and well worth the price it currently commands.”
Mr Dimon warned last month that current suggestions for additional capital regulations by US regulators risk rendering bank stocks uninvestable. According to the bank, Mr Dimon would sell his shares through stock trading plans in conformity with SEC requirements. Mr Dimon was paid $34.5 million in 2022, the same as the previous year.
Frequently asked questions
Who is JPMorgan Chase?
JPMorgan Chase & Co. is one of the oldest, largest, and most well-known financial firms in the world.
What is JP Morgan’s business?
organization is a leading global financial services firm with $2.6 trillion in assets and operations around the world.
Who is Jamie Dimon?James Dimon is an American corporate leader and banker who has served as the chairman and CEO of JPMorgan Chase since 2005.
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