VSIt’s always good to know you’re loved. Especially when this love is very expensive. To justify the extraordinary bonus of 52 million dollars (49.4 million euros), in addition to his salary of more than 30 million dollars, granted to the CEO of the bank JP Morgan, Jamie Dimon, the board of administration merely said that it did not want him to leave. At 66, and endowed with a fragile heart and a fortune exceeding one billion, he could have had this temptation. So, each year, they give him a special bonus that he can only receive if he stays five or six more years. In 2021, it was 34 million. Jamie being president of this same board of directors, he finds nothing wrong with these constant proofs of love.
But, this year, something broke. A new distrust took hold, not of the administrators, but of the shareholders. For the first time since they have the right to speak at a general meeting on the subject (in 2009), they rejected, by an overwhelming majority, Tuesday, May 17, the small gift to the beloved boss. While in 2021 they were 90% to applaud, this year they are only 31%.
Of course, no moral consideration in this sanction, moreover purely advisory. The fact that the average remuneration of bosses is reaching peaks in the United States does, after all, only reflect the good health of the stock market, which everyone is happy about. The return on investment, in 2021, was, on average, 30% for the 400 largest American companies. However, most of the bosses’ remuneration is now paid in shares, which the boss can only receive from a specific date and a level of valuation reached. Thus, Jamie Dimon will only be able to open his pretty package of 50 million from 2027, and if the share price exceeds 148 dollars, against 122 today.
Interest rates go up
What the shareholders criticize the boss for is rather his investment plan, announced in March and deemed both not very detailed and too ambitious. When companies that are too rich get it into their heads to spend a lot, it always alarms shareholders. The boss of Intel, Pat Gelsinger, suffered a bronca of the same order, on May 12, when he intends to multiply investments in his electronic factories around the world.
However, this sudden revolt hides a stronger concern. The spectacular surge in the stock market over the past ten years, which has played on the health crisis like a refreshing breeze, does not resist the ultimate terror of investors: inflation. Massive in the United States, fueled by rising wages, it led the central bank to reverse its monetary policy in a hurry, by reducing its asset purchases and raising its interest rates. It is precisely this combination that caused prices to explode, which created a bubble in technology stocks and which is bursting today. And, suddenly, the shareholders are wondering if it would be very fair to see the bosses basking in paradise, when they are heading for hell.