DEF 14A 1 jpmc2012proxystatement.htm JPMC 2012 PROXY STATEMENT JPMC 2012 Proxy Statement


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A
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________________________________________________________________________________________________________________________




JPMorgan Chase & Co.
270 Park Avenue
New York, New York 10017-2070


April 4, 2012
Dear fellow shareholders:
We are pleased to invite you to the annual meeting of shareholders to be held on May 15, 2012, at our Highland Oaks Campus in Tampa, Florida. As we have done in the past, in addition to considering the matters described in the proxy statement, we will review major developments since our last shareholders’ meeting.
We hope that you will attend the meeting in person. We strongly encourage you to designate the proxies named on the proxy card to vote your shares even if you are planning to come. This will ensure that your common stock is represented at the meeting. The proxy statement explains more about proxy voting. Please read it carefully. We look forward to your participation.

Sincerely,

James Dimon
Chairman and Chief Executive Officer




























Notice of 2012 Annual Meeting
of Shareholders and Proxy Statement
 
 
 
 
Date:
  
Tuesday, May 15, 2012
Time:
  
10:30 am
Place:
  
JPMorgan Chase Highland Oaks Campus
10420 Highland Manor Drive, Building 2
Tampa, FL 33610

Matters to be voted on:
Election of directors
Ratification of appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2012
Advisory resolution to approve executive compensation
Shareholder proposals, if they are introduced at the meeting
Any other matters that may properly be brought before the meeting
By order of the Board of Directors
Anthony J. Horan
Secretary
April 4, 2012

Please vote promptly.
If you hold your shares in street name and do not provide voting instructions, your shares will not be voted on any proposal on which your broker does not have discretionary authority to vote. Brokers do not have discretionary authority to vote on the election of directors, the advisory resolution to approve executive compensation, and on the shareholder proposals. See “How votes are counted” at page 48.
We have sent shareholders of record at the close of business on March 16, 2012, a Notice of Internet Availability of Proxy Materials on or about April 4, 2012. The notice contains instructions on how to access our Proxy Statement and Annual Report for the year ended December 31, 2011, via the Internet and how to vote online. Instructions on how to receive a printed copy of our proxy materials are included in the notice, as well as in the attached Proxy Statement.
Our 2012 Proxy Statement and Annual Report for the year ended December 31, 2011, are available free of charge on our Website at http://investor.shareholder.com/jpmorganchase/annual.cfm.
If you attend the meeting in person, you will be asked to present photo identification, such as a driver’s license, and proof of ownership as of our record date March 16, 2012. See “Attending the annual meeting” at page 49.





Contents
Proposal 1:
Election of directors
 
 
Information about the nominees
 
Corporate governance
 
General
 
Committees of the Board
 
Director independence
 
Other governance practices
 
Director compensation
 
Security ownership of directors and executive officers
 
Compensation Discussion and Analysis
 
Executive summary
 
2011 Business performance overview
 
Compensation decisions for Named Executive Officers
 
2011 Compensation
 
Advisory resolution to approve executive compensation
 
Compensation framework
 
Compensation & Management Development Committee report
 
Executive compensation tables
 
I.      Summary compensation table
 
II.     2011 Grants of plan-based awards
 
III.    Outstanding equity awards at fiscal year-end 2011
 
IV.    2011 Option exercises and stock vested table
 
V.     2011 Pension benefits
 
VI.    2011 Non-qualified deferred compensation
 
VII.   2011 Potential payments upon termination or change in control
 
Additional information about our directors and executive officers
 
Audit Committee report
Proposal 2:
Appointment of independent registered public accounting firm
Proposal 3:
Advisory resolution to approve executive compensation
Proposals 4-10:
Shareholder proposals
General information about the meeting
Shareholder proposals and nominations for the 2013 annual meeting
Appendix A:
Board of Directors – roles and responsibilities
Appendix B:
Director independence standards
Appendix C:
JPMorgan Chase Compensation principles and practices
Appendix D:
Elements of current NEO compensation
Appendix E:
Overview of 2011 performance
JPMorgan Chase Highland Oaks Campus – map and directions





Proxy statement
Your vote is very important. For this reason, the Board of Directors of JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) is requesting that you allow your common stock to be represented at the annual meeting by the proxies named on the proxy card. This proxy statement is being sent or made available to you in connection with this request and has been prepared for the Board by our management. The proxy statement is being sent and made available to our shareholders on or about April 4, 2012.
 
Proposal 1 Election of directors
Nominees
Our Board of Directors has nominated 11 directors for election at this annual meeting to hold office until the next annual meeting and the election of their successors. All of the nominees, except Timothy P. Fynn, are currently directors. Each has agreed to be named in this proxy statement and to serve if elected. All of the nominees are expected to attend the May 15, 2012, annual meeting.
William H. Gray, III, who served as a director of the Firm or a predecessor institution since 1992, and David C. Novak who served as a director of the Firm or a predecessor institution since 2001, will not stand for election when their terms expire on the eve of the annual meeting.
Although we know of no reason why any of the nominees would not be able to serve, if any nominee is unavailable for election, the proxies intend to vote your common stock for any substitute nominee proposed by the Board of Directors. The Board may also choose to reduce the number of directors to be elected, as permitted by our By-laws.
Nomination process
The Board’s Corporate Governance and Nominating Committee (the “Governance Committee”) is responsible for evaluating and recommending to the Board proposed nominees for election to the Board of Directors. The Governance Committee, in consultation with the Chief Executive Officer, periodically reviews the criteria for composition of the Board and evaluates potential new candidates for Board membership. The Governance Committee then makes recommendations to the Board. The Governance Committee also takes into account criteria applicable to Board committees.
As stated in the Corporate Governance Principles of the Board (the “Corporate Governance Principles”), in determining Board nominees, the Board wishes to balance the needs for professional knowledge, business expertise, varied industry knowledge, financial expertise, and CEO-level management experience. Following these principles, the Board seeks to select nominees who combine leadership and business management experience, experience in disciplines relevant to the Firm and its businesses, and personal qualities reflecting integrity, judgment, achievement, effectiveness, and willingness to appropriately challenge management.
The Board strives to ensure diversity of representation among its members. Of the 11 director nominees, two are women and one is African-American. Increasing diversity is a priority, and when considering prospects for possible recommendation to the Board, the Governance Committee reviews available information about the experience, qualifications, attributes and skills of prospects, as well as their gender, race and ethnicity.
The Governance Committee will consider director candidates recommended for consideration by members of the Board, by management and by shareholders. Shareholders wishing to recommend to the Governance Committee a candidate for director should write to the Secretary at: JPMorgan Chase & Co., Office of the Secretary, 270 Park Avenue, New York, New York 10017. Mr. Flynn was nominated to become a director following evaluation and discussion by the Governance Committee and the Board after his consideration was recommended to the Chairman by an executive search expert.
It is the policy of the Governance Committee that candidates recommended by shareholders will be considered in the same manner as other candidates and there are no additional procedures a shareholder must undertake in order for the Governance Committee to consider such shareholder recommendations.
Information about the nominees
Together, the members of the Board provide the Firm with a breadth of demonstrated senior leadership and management experience in large complex organizations, global marketing, services and operations, regulated industries, wholesale and retail businesses, financial controls and reporting, compensation, governance, management succession, strategic planning and risk management. The director nominees bring broad and varied skills and knowledge from positions in global businesses, not-for-profit organizations and government, and diverse perspectives from a broad

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spectrum of industries, community activities and other factors. Each possesses the personal characteristics needed for the responsibilities of a director: each has demonstrated significant achievement in his or her endeavors, can work cooperatively and productively in the interest of all shareholders, possesses high character and integrity, devotes the necessary time to discharge his or her duties, and, for non-management directors, is independent.
The following provides biographical information regarding each of the nominees, including their specific business experience, qualifications, attributes and skills that the Board considered, in addition to their prior service on the Board, when it determined to nominate them.
Unless stated otherwise, all of the nominees have been continuously employed by their present employers for more than five years. The age indicated in each nominee’s biography is as of May 15, 2012, and all other biographical information is as of the date of this proxy statement. Our directors are involved in various charitable and community activities and we have listed a number of these below.
 

 
 
 
 
James A. Bell, 63
Retired Executive Vice President of The Boeing Company, aerospace
Director since November 2011
 
 
 
 
 
 
 
 
Mr. Bell was an Executive Vice President of The Boeing Company, the world’s largest aerospace company, from 2003 until his retirement effective April 1, 2012. He had been Corporate President from June 2008 until February 2012 and was Chief Financial Officer from November 2003 until February 2012. While Chief Financial Officer, he oversaw two key Boeing businesses, Boeing Capital Corporation, the company’s customer-financing subsidiary, and Boeing Shared Services, an 8,000-person, multi-billion dollar business unit that provides common internal services across Boeing’s global enterprise. He is a director of Dow Chemical Company (since 2005).
Prior to being named Chief Financial Officer in 2003, Mr. Bell held the position of Senior Vice President of Finance and Corporate Controller from 2000 and was Vice President of contracts and pricing for Boeing Space and Communications from 1996 to 2000. Before becoming Vice President at the operating group level in 1996, Mr. Bell served as director of business management of the Space Station Electric Power System at the Boeing Rocketdyne unit. Mr. Bell began his career with Rockwell in 1972.
Mr. Bell graduated California State University at Los Angeles with a degree in accounting. He is a member of the board of directors of the Chicago Urban League, World Business Chicago and the Chicago Economic Club.
Mr. Bell has had global business and leadership experience overseeing business performance and strategic growth initiatives at Boeing. His finance and accounting expertise included experience with and direct involvement and supervision in the preparation of financial statements and risk management. As CFO, he was responsible for overall financial management of the company, its financial reporting and transparency, and for multiple corporate functions including Controller, Treasury, long-range planning and corporate and strategic development. In his position as Senior Vice President of Finance and Corporate Controller he served as the company’s principal interface with the board’s audit committee.
 

 
 
 
 
Crandall C. Bowles, 64
Chairman of Springs Industries, Inc., window fashions
Director since 2006
 
 
 
 
 
 
 
 
Ms. Bowles has been Chairman of Springs Industries, Inc., a manufacturer of window products for the home, since 1998 and a member of its board since 1978. From 1998 until 2006, she was also Chief Executive Officer of Springs Industries, Inc. Subsequent to a spinoff and merger in 2006, she was Co-Chairman and Co-CEO of Springs Global Participacoes S.A., a textile home furnishings company based in Brazil, until July 2007. Ms. Bowles is a director of Deere & Company (since 1999 and previously from 1990 to 1994) and of Sara Lee Corporation (since 2008). She previously served as a director of Wachovia Corporation (1991–1996).

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Ms. Bowles graduated from Wellesley College in 1969 and earned an MBA from Columbia University in 1973. She is a trustee of the Brookings Institution and is on the governing boards of the Packard Center at Johns Hopkins, The University of North Carolina Press, The Wilderness Society, and the Global Research institute of UNC-Chapel Hill.
Ms. Bowles has extensive experience managing large complex business organizations at Springs Industries, Inc. and Springs Global Participacoes S.A. At those companies, and through her current and prior service on other public company boards, she has dealt with a wide range of issues including audit and financial reporting, risk management, executive compensation, international business, and sales and marketing of consumer products and services. Her philanthropic activities give her valuable perspective on important societal and economic issues relevant to the Firm’s business.
 
 
 
 
 
Stephen B. Burke, 53
Chief Executive Officer of NBCUniversal, LLC and Executive Vice President of Comcast
Corporation, television and entertainment
Director since 2004 and Director of Bank One Corporation from 2003 to 2004
 
 
 
 
Mr. Burke has been Chief Executive Officer of NBCUniversal, LLC and Executive Vice President of Comcast Corporation since January 2011. He had been Chief Operating Officer of Comcast Corporation, one of the nation’s leading providers of entertainment, information and communication products and services, from 2004 until 2011, and was President of Comcast Cable Communications, Inc. from 1998 until January 2010. Before joining Comcast, he served with The Walt Disney Company as President of ABC Broadcasting. Mr. Burke joined The Walt Disney Company in January 1986, where he helped to develop and found The Disney Store and helped to lead a comprehensive restructuring effort of Euro Disney S.A. Mr. Burke is a director of Berkshire Hathaway Inc. (since 2009).
Mr. Burke graduated from Colgate University in 1980 and received an MBA from Harvard Business School in 1982. He is Chairman of The Children’s Hospital of Philadelphia.
Mr. Burke’s roles at Comcast, ABC Broadcasting, and Euro Disney, have given him broad exposure to the challenges associated with managing a large and diverse business. In those roles he has dealt with a variety of issues including audit and financial reporting, risk management, executive compensation, sales and marketing, and technology and operations. In addition, Comcast and ABC Broadcasting have provided him with experience working in regulated industries and Euro Disney has given him international business experience.
 
 
 
 
 
David M. Cote, 59
Chairman and Chief Executive Officer of Honeywell International Inc., diversified
technology and manufacturing
Director since 2007
 
 
 
 
Mr. Cote is Chairman and Chief Executive Officer of Honeywell International Inc., a diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; turbochargers; and specialty materials. He was elected President and Chief Executive Officer in February 2002, and was named Chairman of the Board in July 2002. Prior to joining Honeywell, he served as Chairman, President and Chief Executive Officer of TRW Inc., which he joined in 1999 after a 25 year career with General Electric. Mr. Cote is a director of Honeywell International Inc. (since 2002) and was a director of TRW Inc. (1999–2001).
Mr. Cote graduated from the University of New Hampshire in 1976. In 2010, he was named by President Obama to serve on the bipartisan National Commission on Fiscal Responsibility and Reform. Mr. Cote was named co-chair of the U.S.-India CEO Forum by President Obama in 2009, and has served on the Forum since July 2005. Mr. Cote serves on an advisory panel to Kohlberg Kravis Roberts & Co.
At Honeywell and TRW, Mr. Cote gained experience dealing with a variety of issues relevant to the Firm’s business, including audit and financial reporting, risk management, executive compensation, sales and marketing of industrial and consumer goods and services, and technology matters. He also has extensive experience in international business issues and public policy matters. His record of public service further enhances his value to the Board.

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James S. Crown, 58
President of Henry Crown and Company, diversified investments
Director since 2004 and Director of Bank One Corporation from 1991 to 2004
 
 
 
 
 
 
 
 
Mr. Crown joined Henry Crown and Company, a privately owned investment company which invests in public and private securities, real estate and operating companies, in 1985 as Vice President and became President in 2003. Mr. Crown is a director of General Dynamics Corporation (since 1987) and of Sara Lee Corporation (since 1998). He is also a director of JPMorgan Chase Bank, N.A., a wholly-owned subsidiary of the Firm (since 2010).
Mr. Crown graduated from Hampshire College in 1976 and received his law degree from Stanford University Law School in 1980. Following law school, Mr. Crown joined Salomon Brothers Inc. and became a vice president of the Capital Markets Service Group in 1983. In 1985 he joined his family’s investment firm. He is a Trustee of the University of Chicago Medical Center, the Museum of Science and Industry, The Aspen Institute, the University of Chicago, and the Chicago Symphony Orchestra. He is a member of the American Academy of Arts and Sciences.
Mr. Crown’s position with Henry Crown and Company and his service on other public company boards have given him exposure to many issues encountered by the Firm’s Board, including audit and financial reporting, investment management, risk management, and executive compensation. His legal training gives him enhanced perspective on legal and regulatory issues. He is experienced in investment banking and capital markets matters through his prior work experience and subsequent responsibilities. The broad range of his philanthropic activities, in the Chicago area in particular, gives him important insight into the community concerns of one of the Firm’s largest markets.
 
 
 
 
 
 
 
James Dimon, 56
 
Chairman and Chief Executive Officer of JPMorgan Chase
 
Director since 2004 and Chairman of the Board of Bank One Corporation from 2000 to 2004

 
 
 
 
 
 
Mr. Dimon became Chairman of the Board on December 31, 2006, and has been Chief Executive Officer and President since December 31, 2005. He had been President and Chief Operating Officer since JPMorgan Chase’s merger with Bank One Corporation in July 2004. At Bank One he had been Chairman and Chief Executive Officer since March 2000. Prior to joining Bank One, Mr. Dimon had extensive experience at Citigroup Inc., the Travelers Group, Commercial Credit Company and American Express Company.
Mr. Dimon graduated from Tufts University in 1978 and received an MBA from Harvard Business School in 1982. He is a director of The College Fund/UNCF and serves on the Board of Directors of The Federal Reserve Bank of New York, The National Center on Addiction and Substance Abuse, Harvard Business School and Catalyst. He is also on the Board of Trustees of New York University School of Medicine. Mr. Dimon does not serve on the board of any publicly traded company other than JPMorgan Chase.
Mr. Dimon has many years of experience in the financial services business, both wholesale and retail, as well as international and domestic experience. As CEO, he is intimately familiar with all aspects of the Firm’s business activities. In addition to the JPMorgan Chase merger with Bank One, he led the Firm’s successful acquisition and integration of The Bear Stearns Companies Inc. and the banking operations of Washington Mutual Bank. His business experience and his service on the board of the Federal Reserve Bank of New York have given him experience dealing with government officials and agencies and insight into the regulatory process.

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Timothy P. Flynn, 55
Retired Chairman of KPMG International, professional services
 
 
 
 
 
 
 
 
 
Mr. Flynn was Chairman of KPMG International from 2007 until his retirement in October 2011.  KPMG International is a professional services organization which provides audit, tax and advisory services in 152 countries.  KPMG International member firms have 145,000 professionals, including more than 8,000 partners in 152 countries, with combined revenues of $22.7 billion for fiscal year 2011. He was also Chairman (2005–2010) and Chief Executive Officer (2005–2008) of KPMG LLP, the U.S. and largest individual member firm of KPMG International.
Mr. Flynn held a number of key leadership positions throughout his 32 years at KMPG, providing him with perspective on the issues facing major companies and the evolving business environment. Mr. Flynn joined a predecessor of KPMG in 1979 and became a Partner in 1988. After having served as an audit partner on accounts for technology and manufacturing companies, he became Vice Chairman, Human Resources (1996–2001). He has served as Client Service Partner for some of KPMG’s largest clients, including clients in the financial services industry. As Chairman of KPMG International, Mr. Flynn led a team of senior partners responsible for the management and operations of the global network and led a board of senior partners responsible for strategy, oversight, risk management and governance of the global network. During his Chairmanship of KPMG LLP, he led the redesign of governance, compensation and incentive programs focusing on integrity, professionalism and personal accountability. This cultural transformation culminated in KPMG LLP being named to Fortune's Top 100 Great Places to Work in 2007 and later years.
Mr. Flynn holds a bachelors degree in accounting from The University of St. Thomas, St. Paul, Minnesota and is a member of their Board of Trustees. He has previously served as a trustee of the Financial Accounting Standards Board, a member of the World Economic Forum’s International Business Counsel, and a founding member of The Prince of Whales’ International Integrated Reporting Committee.
Mr. Flynn has extensive experience in financial services and risk management. Prior to serving as Chairman and Chief Executive Officer, Mr. Flynn served, among other positions, as Vice Chairman, Audit and Risk Advisory Services, with operating responsibility for the audit practice, as well as the Risk Advisory and Financial Advisory Services practices.
Mr. Flynn combines leadership and business experience in a global setting with experience in accounting, auditing, financial services, risk management and regulatory affairs.
 
 
 
 
 
Ellen V. Futter, 62
President and Trustee of the American Museum of Natural History
Director since 2001 and Director of J.P. Morgan & Co. Incorporated from 1997 to 2000
 
 
 
 
 
 
 
 
Ms. Futter became President of the American Museum of Natural History in 1993, prior to which she had been President of Barnard College since 1981. The Museum is one of the world’s preeminent scientific and cultural institutions. Her career began at Milbank, Tweed, Hadley & McCloy where she practiced corporate law. Ms. Futter is a director of Consolidated Edison, Inc. (since 1997) and was previously a director of American International Group Inc. (1999–2008), Bristol-Myers Squibb Company (1999–2005), and Viacom (2006–2007).
Ms. Futter graduated from Barnard College in 1971 and earned a law degree from Columbia Law School in 1974. She is a member of the Board of Overseers and Managers of Memorial Sloan-Kettering Cancer Center, a Fellow of the American Academy of Arts and Sciences and a member of the Council on Foreign Relations. Ms. Futter is also a director of The American Ditchley Foundation and NYC & Company. She was a director of the Federal Reserve Bank of New York (1988–1993) and served as its Chairman (1992–1993).
Ms. Futter has managed large education and not-for-profit organizations, Barnard College and the American Museum of Natural History, and in that capacity, she has dealt with many complex organizational issues. Such work and her service

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on public company boards and the board of the Federal Reserve Bank of New York have given her experience with regulated industries, in particular the financial services industry, and with risk management, executive compensation, and audit and financial reporting. In her role at the Federal Reserve Bank of New York she also acquired valuable experience dealing with government officials and agencies. Her years of practicing corporate law give her enhanced perspective on legal and regulatory issues. Her extensive experience with philanthropic organizations provides her with insights that are relevant to the Firm’s corporate responsibility initiatives.
 
 
 
 
 
Laban P. Jackson, Jr., 69
Chairman and Chief Executive Officer of Clear Creek Properties, Inc., real estate
development
Director since 2004 and Director of Bank One Corporation from 1993 to 2004
 
 
 
 
Mr. Jackson has been Chairman of Clear Creek Properties, Inc., a real estate development company, since 1989. Mr. Jackson was a director of The Home Depot (2004–2008), SIRVA (2006–2007) and IPIX Corporation (1999–2006). He is also a director of J.P. Morgan Securities Ltd. and of JPMorgan Chase Bank, N.A., wholly-owned subsidiaries of the Firm (since 2010).
Mr. Jackson graduated from the United States Military Academy in 1965. He was a director of the Federal Reserve Bank of Cleveland (1987–1992). Mr. Jackson is also a director of Markey Cancer Foundation and Transylvania University.
Mr. Jackson has founded and managed businesses and is an experienced entrepreneur and manager. In that capacity, and through his current and prior service on other public company boards, he has dealt with a wide range of issues that are important to the Firm’s business, including audit and financial reporting, risk management, executive compensation, marketing and product development. His service on the board of the Federal Reserve Bank of Cleveland has given him experience dealing with government officials and agencies and further experience in financial services.
Mr. Jackson is a member of the Audit Committee Leadership Network (“ACLN”), a group of audit committee chairs from some of North America’s leading companies, committed to improving the performance of audit committees and helping to enhance trust in the financial markets.
 
 
 
 
 
Lee R. Raymond, 73
Retired Chairman and Chief Executive Officer of Exxon Mobil Corporation, oil and gas
Director since 2001 and Director of J.P. Morgan & Co. Incorporated from 1987 to 2000
 
 
 
 
 
 
 
 
Mr. Raymond was Chairman of the Board and Chief Executive Officer of ExxonMobil from 1999 until he retired in December 2005. ExxonMobil’s principal business is energy, involving exploration for and production of crude oil and natural gas, manufacture of petroleum and petrochemical products, and transportation and sale of crude oil, natural gas, petroleum and petrochemical products. He had been Chairman of the Board and Chief Executive Officer of Exxon Corporation from 1993 until its merger with Mobil Oil Corporation in 1999, having begun his career in 1963 with Exxon. He was a director of Exxon Mobil Corporation (1984–2005).
Mr. Raymond graduated from the University of Wisconsin in 1960 and received a Ph.D. from the University of Minnesota in Chemical Engineering in 1963. He is a director of the Business Council for International Understanding, a Trustee of the Wisconsin Alumni Research Foundation, a Trustee of the Mayo Clinic, a member of the Innovations in Medicine Leadership Council of UT Southwestern Medical Center, a member of the National Academy of Engineering and a member and past Chairman of the National Petroleum Council. Mr. Raymond serves on an advisory panel to Kohlberg Kravis Roberts & Co.
During his long tenure at Exxon Mobil and its predecessors, Mr. Raymond gained important experience in all aspects of business management, including audit and financial reporting, risk management, executive compensation, marketing, and operating in a regulated industry. He has extensive international business experience.

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William C. Weldon, 63
Chairman and Chief Executive Officer of Johnson & Johnson, health care products
Director since 2005
 
 
 
 
 
 
 
 
Mr. Weldon has been Chairman and Chief Executive Officer of Johnson & Johnson since 2002. Effective April 26, 2012, Mr. Weldon is resigning as Chief Executive Officer; he will continue as Chairman. He served as Vice Chairman from 2001 and Worldwide Chairman, Pharmaceuticals Group from 1998 until 2001. Johnson & Johnson is engaged worldwide in the research and development, manufacture and sale of a broad range of products in the health care field. The company conducts business in virtually all countries of the world with the primary focus on products related to human health and well-being.
Mr. Weldon served in a number of other senior executive positions since joining Johnson & Johnson in 1971. In 1982 he was named manager, ICOM Regional Development Center in Southeast Asia. Mr. Weldon was appointed executive vice president and managing director of Korea McNeil, Ltd., in 1984 and managing director of Ortho-Cilag Pharmaceutical, Ltd., in the U.K. in 1986. In 1989, he was named vice president of sales and marketing at Janssen Pharmaceutica in the U.S., and in 1992 he was appointed president of Ethicon Endo-Surgery. Mr. Weldon is a director of Johnson & Johnson (since 2002).
Mr. Weldon graduated from Quinnipiac University in 1971. Mr. Weldon is a member of the CEO Roundtable on Cancer, a director of the US-China Business Council, a member of The Business Council, a member of the Healthcare Leadership Council, a member of the Business Roundtable, and a member of the Sullivan Commission on Diversity in the Health Professions Workforce. Mr. Weldon also serves on the Liberty Science Center Chairman’s Advisory Council and as a member of the Board of Trustees for Quinnipiac University. He previously served as Chairman of the Pharmaceutical Research and Manufacturers of America.
Mr. Weldon has experience managing a large complex organization at Johnson & Johnson, where he has dealt with such issues as audit and financial reporting, risk management, and executive compensation. Through his role at various Johnson & Johnson entities, he has had extensive exposure to international business management and to operating in a regulated industry, and he has gained expertise in sales and marketing to consumers. His extensive record of charitable involvement and public service also brings an important perspective to his role on the Board.
 
Corporate governance
General
Governance is a continuing focus at JPMorgan Chase, starting with the Board of Directors and extending throughout the Firm. In this section we describe some of our key governance practices.
Corporate Governance Principles of the Board — The Board of Directors first adopted Corporate Governance Principles in 1997, and has revised them periodically since then to reflect evolving best practices and regulatory requirements, including the New York Stock Exchange (“NYSE”) corporate governance listing standards. The Corporate Governance Principles establish a framework for the governance of the Firm.
Board leadership structure — The Board of Directors is responsible for the oversight of management on behalf of the Firm’s shareholders. The Board accomplishes this function acting directly and through its committees. Directors discharge their duties at Board and committee meetings and also through telephone contact and other communications with the Chairman and Chief Executive Officer (“CEO”), management and others regarding matters of concern and interest to the Firm. Specific elements of our Board leadership structure are outlined in Appendix A and include:
Chairman of the Board — The Firm’s Board of Directors has no established policy on whether or not to have a non-executive chairman and believes that it should make that judgment based on circumstances and experience. The Board has determined that the most effective leadership model for the Firm currently is that Mr. Dimon serves as both Chairman and Chief Executive Officer, and that the independent directors annually appoint an independent director to serve as the Presiding Director. The Board believes it is functioning effectively under its current structure, and that the current structure provides appropriate oversight protections. The Board does not believe that introducing a separate Chairman at this time and with this CEO would provide appreciably better direction for and performance of the Firm, and instead could cause uncertainty, confusion and inefficiency in board and management function and relations.

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Independent oversight — Independent directors comprise more than 90% of the Board and 100% of the Audit Committee, Compensation & Management Development Committee (the “Compensation Committee”), Governance Committee, Public Responsibility Committee and Risk Policy Committee. At each regularly scheduled Board meeting, the independent directors generally meet in executive session with no members of management present and may discuss any matter they deem appropriate, including evaluation of the CEO and other senior officers and determination of their compensation.
Presiding Director — The Firm’s Presiding Director functions as a Lead Director, but the Board prefers the term Presiding Director to emphasize that all directors share equally in their responsibilities as members of the Board. The Presiding Director presides at executive sessions of independent directors (generally held as part of each regularly scheduled Board meeting) and at all Board meetings at which the Chairman is not present, and has authority to call meetings of independent directors. The Presiding Director approves Board meeting agendas and schedules for each Board meeting, may add agenda items in his or her discretion, approves Board meeting materials for distribution to and consideration by the Board, facilitates communication between the Chairman and CEO and the independent directors, as appropriate, is available for consultation and communication with major shareholders where appropriate, upon reasonable request, and performs such other functions as the Board directs. The Presiding Director is appointed annually by and from among the independent directors.
Committee Chairs — All are independent and are appointed annually by the Board, approve agendas and material for respective committee meetings, and act as liaison between committee members and the Board and between committee members and senior management.
 
Committees of the Board
The Board has five principal committees. The charter of each committee can be found on our Website at www.jpmorganchase.com under Governance, which is under the About Us tab. Each member of the Audit Committee, the Compensation Committee and the Governance Committee has been determined by the Board to be independent for purposes of the NYSE corporate governance listing standards and within the meaning of regulations of the U.S. Securities and Exchange Commission (the “SEC”).
As stated in the Board’s Corporate Governance Principles, Board members have complete access to management, and the Board and Board committees can, if they wish to do so, seek legal or other expert advice from sources independent of management and shall be provided the resources for such purposes.

8
 
JPMorgan Chase & Co./ 2012 Proxy Statement



Audit Committee — provides oversight of the independent registered public accounting firm’s qualifications and independence; the performance of the internal audit function and that of the independent registered public accounting firm; and management’s responsibilities to assure that there is in place an effective system of controls reasonably designed to safeguard the assets and income of the Firm, assure the integrity of the Firm’s financial statements, assure compliance with the Firm’s operational risk management processes, and maintain compliance with the Firm’s ethical standards, policies, plans and procedures, and with laws and regulations. The Board of Directors has determined that Mr. Bell, Ms. Bowles and Mr. Jackson are audit committee financial experts as defined by the SEC.
Compensation & Management Development Committee — reviews and approves the Firm’s compensation and benefit programs; ensures the competitiveness of these programs; and advises the Board on the development of and succession for key executives. The Compensation Committee periodically reviews and approves a statement of the Firm’s compensation practices and principles and also reviews the relationship among risk, risk management and compensation in light of the Firm’s objectives, including its safety and soundness and the avoidance of practices that would encourage excessive risk. Information on the Committee’s processes and procedures for consideration of executive compensation is provided in the Compensation Discussion and Analysis at page 15.
Corporate Governance & Nominating Committee — exercises general oversight with respect to the governance of the Board of Directors, including reviewing the qualifications of nominees for election to the Board and making recommendations to the Board regarding director compensation. The Governance Committee annually leads the Board in its review and self-evaluation of the performance of the Board as a whole with a view to increasing the effectiveness of the Board.
Public Responsibility Committee — reviews and considers the Firm’s position and practices on charitable contributions, community development, legislation, protection of the environment, shareholder proposals involving issues of public interest and public responsibility and other similar issues as to which JPMorgan Chase relates to the community at large, and provides guidance to management and the Board as appropriate.
Risk Policy Committee — provides oversight of the CEO’s and senior management’s responsibilities to assess and manage the Firm’s credit risk, market risk, interest rate risk, investment risk, liquidity risk, and reputational risk, and is also responsible for review of the Firm’s fiduciary and asset management activities.
Board and committee interaction — Committees meet regularly in conjunction with scheduled Board meetings, and hold additional meetings as needed. The Audit Committee and the Risk Policy Committee hold joint meetings on matters of mutual interest. The Compensation Committee meets at least annually with the Firm’s Chief Risk Officer and one or more members of the Risk Policy Committee to review elements of our organizational structure, management practices and compensation programs that would discourage unnecessary or excessive risk-taking and to assess our incentive arrangements. The committees report their activities and discuss their recommendations with the full Board.
Board committees membership The following table summarizes the membership of the Board and each of its principal committees, and the number of times each met during 2011:
Director
 
Audit

 
Compensation &
Management
Development

 
Corporate
Governance &
Nominating

 
Public
Responsibility

 
Risk Policy

James A. Bell
 
Member

 
 
 
 
 
 
 
 
Crandall C. Bowles 1
 
Member

 
 
 
 
 
Chair

 
 
Stephen B. Burke
 
 
 
Member

 
Member

 
 
 
 
David M. Cote
 
 
 
 
 
 
 
Member

 
Member

James S. Crown
 
 
 
 
 
 
 
 
 
Chair

James Dimon
 
 
 
 
 
 
 
 
 
 
Ellen V. Futter
 
 
 
 
 
 
 
Member

 
Member

William H. Gray, III 1
 
Member

 
 
 
 
 
Member

 
 
Laban P. Jackson, Jr.
 
Chair

 
 
 
 
 
 
 
 
David C. Novak
 
 
 
Member

 
Member

 
 
 
 
Lee R. Raymond 2
 
 
 
Chair

 
Member

 
 
 
 
William C. Weldon 3
 
 
 
Member

 
Chair

 
 
 
 
Number of meetings in 2011
 
15

 
6

 
4

 
4

 
7

1
Ms. Bowles became Chair of the Public Responsibility Committee in October 2011, succeeding Mr. Gray.
2
Presiding director
3
Mr. Weldon became Chair of the Corporate Governance & Nominating Committee effective March 27, 2012, succeeding Mr. Novak.
During 2011, the Board met 11 times; each director attended 75% or more of the total meetings of the Board and the committees on which he or she served.

JPMorgan Chase & Co./ 2012 Proxy Statement
 
9



Other Board Committees In addition to the above committees, the Board has a Board-level Executive Committee and a Stock Committee. The Board-level Executive Committee consists of the CEO and the Chairs of the Board’s principal committees. It may exercise all the powers of the Board that lawfully may be delegated, but with the expectation that it would not take material actions absent special circumstances.
The Stock Committee, acting through the CEO, acts in accordance with Board-approved limitations and capital plans to implement the declaration of dividends, authorize the issuance of stock, administer the dividend reinvestment plan, and implement share repurchase plans.
 
Director independence
Pursuant to the corporate governance listing standards of the NYSE, a majority of the Board of Directors (and each member of the Audit, Compensation and Governance Committees) must be independent. The Board of Directors may determine a director to be independent if the director has no disqualifying relationship as defined in the NYSE corporate governance rules and if the Board has affirmatively determined that the director has no material relationship with JPMorgan Chase, either directly or as a partner, shareholder, or officer of an organization that has a relationship with JPMorgan Chase. In connection with the assessment of director independence, the relationships listed in Appendix B are deemed immaterial unless the Board otherwise determines. Criteria relating to director independence may also be found in the Corporate Governance Principles on our Website.
The Board of Directors reviewed the relationships between the Firm and each director and nominee and determined that in accordance with the NYSE corporate governance listing standards and the Firm’s independence standards, each non-management director and nominee (James A. Bell, Crandall C. Bowles, Stephen B. Burke, David M. Cote, James S. Crown, Timothy P. Flynn, Ellen V. Futter, Laban P. Jackson, Jr., David C. Novak, Lee R. Raymond and William C. Weldon) has only immaterial relationships with JPMorgan Chase and accordingly each is an independent director under these standards. There are additional objective tests for independence in the NYSE rules and each of the nominees meets these objective tests for independence as well. Under the NYSE rules, a director employed by the Firm cannot be deemed to be an independent director, and consequently, James Dimon is not an independent director of JPMorgan Chase.
In making its determinations concerning director independence, the Board considered the following transactions between the Firm and each director and nominee, their immediate family members and any such person’s principal business affiliations: extensions of credit made by bank subsidiaries of the Firm; financial products and services provided by subsidiaries of the Firm; business transactions for property or services contracted for by subsidiaries of the Firm; and charitable contributions made by JPMorgan Chase Foundation or JPMorgan Chase Bank, N.A. to any non-profit organization of which a director or nominee is employed as an officer. The Board reviewed these relationships in light of the Firm's and NYSE independence standards and determined that none of them create a material relationship between the Firm and the respective director or would impair the independence or judgment of the respective director. In particular, the Board considered:
Consumer credit — extensions of credit provided to directors Bell, Futter and Jackson; and credit cards issued to directors Bowles, Burke, Cote, Crown, Futter, Jackson, Novak, Raymond and Weldon, and their immediate family members;
Wholesale credit — extensions of credit and other financial and financial advisory services provided to The Boeing Company and its subsidiaries, where Mr. Bell was an Executive Vice President; Springs Industries, Inc. and its subsidiaries, where Ms. Bowles is Chairman of the Board; NBCUniversal, LLC and Comcast Corporation and their subsidiaries, where Mr. Burke is Chief Executive Officer and Executive Vice President, respectively; Honeywell International Inc. and its subsidiaries, where Mr. Cote is Chairman and Chief Executive Officer; Henry Crown and Company, where Mr. Crown is President, and other Crown family-owned entities; KPMG International and its member firms, where Mr. Flynn was Chairman; the American Museum of Natural History, where Ms. Futter is President and a Trustee; Yum! Brands, Inc. and its subsidiaries, where Mr. Novak is Chairman and Chief Executive Officer; and Johnson & Johnson and its subsidiaries, where Mr. Weldon is Chairman and Chief Executive Officer; and
Goods, services and contributions — purchases of building safety and security equipment and maintenance services from Honeywell International Inc.; leases of office and retail space from subsidiaries of companies in which Mr. Crown and members of his immediate family have indirect ownership interests; professional services provided by KPMG International and its member firms, primarily related to advisory services and expatriate tax work; transitional services related to a 2008 acquisition by the Firm’s private equity division of a business of a subsidiary of Johnson & Johnson; and charitable contributions to the American Museum of Natural History.
All of the transactions, relationships and arrangements of the types listed above were entered into, and payments were made or received, by the Firm in the ordinary course of business and on substantially similar terms as those that would be offered to comparable counterparties in similar circumstances.

10
 
JPMorgan Chase & Co./ 2012 Proxy Statement



 
Other governance practices
Independent director meetings — Independent directors generally meet in executive session as part of each regularly scheduled Board meeting, with discussion led by the Presiding Director.
Majority voting for directors — The Firm’s By-laws provide a majority voting standard for election of directors in uncontested elections (resignation by any incumbent director who is not re-elected) and plurality voting in any election that is contested.
Board’s role in risk oversight — The Firm’s risk management is described in the Management Discussion and Analysis of the 2011 Annual Report starting at page 125. As stated there, risk is an inherent part of JPMorgan Chase’s business activities and the Firm’s overall risk appetite is established in the context of the Firm’s capital, earnings power and diversified business model. The Firm’s risk management framework and governance structure are intended to provide comprehensive controls and ongoing management of the major risks taken in its business activities.
Risk appetite — The Firm employs a formalized risk appetite framework to clearly link risk appetite and return targets, controls and capital management.
— The CEO is responsible for setting the overall risk appetite for the Firm, and the line of business (“LOB”) CEOs are responsible for setting the risk appetite for their respective LOBs subject to approval by the CEO and the Firm’s Chief Risk Officer.
— The Risk Policy Committee approves the risk appetite policy on behalf of the entire Board of Directors.
Risk management framework — The Firm’s risk governance structure starts with each line of business being responsible for managing its own risks, with its own risk committee and a chief risk officer. Overlaying the line of business risk management are four corporate functions with risk management-related responsibilities.
— Risk Management operates independently to provide oversight of firmwide risk management and controls, and is headed by the Firm’s Chief Risk Officer, who is a member of the Firm’s Operating Committee and reports to the CEO and is accountable to the Board of Directors, primarily through the Board’s Risk Policy Committee.
— The Chief Investment Office and Corporate Treasury are responsible for managing the Firm’s liquidity, interest rate and foreign exchange risk, and other structural risks.
— Legal and Compliance has oversight for legal risk.
— Each LOB has a risk committee which includes in its mandate oversight of the reputational risks in its business.
Board oversight — The Board of Directors exercises its oversight of risk management’s principally through the Board’s Risk Policy Committee and Audit Committee.
— The Risk Policy Committee oversees senior management risk-related responsibilities, including reviewing management policies and performance against these policies and related benchmarks.
— The Audit Committee reviews with management the system of internal controls that is relied upon to provide reasonable assurance of compliance with the Firm’s operational risk management processes.
— The Compensation Committee is responsible for reviewing the Firm’s compensation practices and the relationship among risk, risk management and compensation in light of the Firm’s objectives.
— Each of the committees oversees reputation risk issues within its scope of responsibility.
— The Board of Directors also reviews selected risk topics directly as circumstances warrant.
Shareholder outreach — We recognize the importance of shareholder communications to help our investors understand our performance and strategies. We reach out to shareholders in many different ways, including through quarterly earnings presentations, SEC filings, web communications, and investor meetings. In addition, our senior executives engage major institutional shareholders as part of a semi-annual outreach program to invite comments on governance matters, executive compensation, and shareholder proposals. We meet throughout the year with additional shareholders and organizations interested in our practices.
Special shareholder meetings — The Firm’s By-laws permit shareholders holding at least 20% of the outstanding common shares (net of hedges) to call special meetings.
Code of Conduct and Code of Ethics for Finance Professionals — The JPMorgan Chase Code of Conduct is a collection of rules and policy statements governing employees’ conduct in relation to the Firm’s business. In addition, the Firm has a Code of Ethics for Finance Professionals that applies to the CEO, President, Chief Financial Officer (“CFO”), Chief Accounting Officer of the Firm, and to all other professionals of the Firm worldwide serving in a finance, accounting, corporate treasury, tax or investor relations role. The purpose of the Code of Ethics for Finance Professionals is to

JPMorgan Chase & Co./ 2012 Proxy Statement
 
11



promote honest and ethical conduct and compliance with the law, particularly as related to the maintenance of the Firm’s financial books and records and the preparation of its financial statements. The Firm provides a Code Reporting Hotline operated by an independent third party, through which employees can report suspected violations of the Code of Conduct or other policies.
Political contributions and legislative lobbying — We believe that it is in the shareholders’ best interests for the Firm to be an effective participant in the legislative and regulatory process and that governance and transparency are important components of our process. The Firm supports its interests in the political arena in a variety of ways. Our philosophy, policies and disclosures concerning political contributions and legislative lobbying, as well as the compliance procedures and oversight we have in place, reflect our commitment to civic participation and transparency. These are described in our Political Activities Statement which can be found on our public Website at www.jpmorganchase.com under Governance.
The Firm discloses all contributions made by its affiliated political action committees or PACs (funded entirely by voluntary contributions from the Firm’s employees) to candidates for political office and to 527 organizations on our Website. The Firm may from time to time support state ballot initiatives and broad-based groups organized under Section 527 of the Internal Revenue Code. Direct contributions to 527 groups are not made to support the election of any candidate or for the purpose of express advocacy. The Firm belongs to a number of trade associations representing the interests of both the financial services industry and the broader business community. We voluntarily report on our Website such contributions to 527 groups and state ballot initiatives, and the principal trade associations to which we belong.
Board communications — Shareholders and interested parties who wish to contact any Board member or committee chair, the Presiding Director, or the independent directors as a group, may mail correspondence to: JPMorgan Chase & Co., Attention (name of Board member(s)), Office of the Secretary, 270 Park Avenue, New York, New York 10017 or e-mail the Office of the Secretary at corporate.secretary@jpmchase.com.
Documents available — The Corporate Governance Principles, Code of Conduct, Code of Ethics for Finance Professionals, and the JPMorgan Chase & Co. Political Activities Statement, as well as the Firm’s By-laws and charters of our principal Board committees, can be found on our Website at www.jpmorganchase.com under Governance, which is under the About Us tab. These documents will also be made available to any shareholder who requests them by writing to the Secretary at: JPMorgan Chase & Co., Office of the Secretary, 270 Park Avenue, New York, New York 10017.
 
Director compensation
Annual compensation — The Board believes it is desirable that a significant portion of director compensation be linked to the Firm’s common stock, and the Board’s total compensation includes approximately one-third cash and two-thirds stock-based compensation. In 2011, each non-management director received an annual cash retainer of $75,000 and an annual grant, made when annual employee incentive compensation was paid, of deferred stock units valued at $170,000 on the date of grant. The director retainer and annual grant amounts have not changed since 2003.
Each deferred stock unit represents the right to receive one share of the Firm’s common stock and dividend equivalents payable in deferred stock units for any dividends paid. Deferred stock units have no voting rights. In January of the year immediately following a director’s termination of service, deferred stock units are distributed in shares of the Firm’s common stock in either a lump sum or in annual installments for up to 15 years as elected by the director.
Each director who is a member of the Audit Committee receives an additional annual cash retainer of $10,000. Each chair of a board committee receives an additional retainer of $15,000 per year. Directors who are officers of the Firm do not receive any fees for their service as directors.
The following table summarizes annual compensation for non-management directors.
Compensation
Amount ($)

Board retainer
$
75,000

Committee chair retainer
15,000

Audit committee member retainer
10,000

Deferred stock unit grant
170,000


12
 
JPMorgan Chase & Co./ 2012 Proxy Statement



Stock ownership guidelines — As stated in the Corporate Governance Principles, directors pledge that, for as long as they serve, they will retain all shares of the Firm’s common stock purchased on the open market or received pursuant to their service as a board member.
Deferred compensation — Each year non-management directors may elect to defer all or part of their cash compensation. A director’s right to receive future payments under any deferred compensation arrangement is an unsecured claim against JPMorgan Chase’s general assets. Cash amounts may be deferred into various investment equivalents, including deferred stock units. Upon retirement, compensation deferred into stock units will be distributed in stock; all other deferred cash compensation will be distributed in cash. Deferred compensation will be distributed in either a lump sum or in annual installments for up to 15 years as elected by the director commencing in January of the year following the director’s retirement from the Board.
Reimbursements and insurance — The Firm reimburses directors for their expenses in connection with their board service. We also pay the premiums on directors’ and officers’ liability insurance policies and on travel accident insurance policies covering directors as well as employees of the Firm.
2011 Director compensation table — The following table shows the compensation for each director in 2011.
Director
 
Fees earned or 
paid in cash ($) 1

 
2011 Stock 
award ($) 2

 
Total ($)

James A. Bell 3
 
$
14,167

 
$

 
$
14,167

Crandall C. Bowles 3
 
88,750

 
170,000

 
258,750

Stephen B. Burke
 
75,000

 
170,000

 
245,000

David M. Cote
 
75,000

 
170,000

 
245,000

James S. Crown 4
 
130,000

 
170,000

 
300,000

Ellen V. Futter
 
75,000

 
170,000

 
245,000

William H. Gray, III 3
 
96,250

 
170,000

 
266,250

Laban P. Jackson, Jr. 5
 
252,500

 
170,000

 
422,500

David C. Novak
 
90,000

 
170,000

 
260,000

Lee R. Raymond
 
90,000

 
170,000

 
260,000

William C. Weldon
 
75,000

 
170,000

 
245,000

1
Includes fees earned, whether paid in cash or deferred.
2
The aggregate number of option awards and stock awards outstanding at December 31, 2011, for each current director is included in the Security ownership of directors and executive officers table at page 14 under the columns “Options/SARs exercisable within 60 days” and “Additional underlying stock units,” respectively. All such awards are vested.
3
Mr. Bell joined the Board in November 2011. Ms. Bowles became Chair of the Public Responsibility Committee in October 2011, succeeding Mr. Gray. Retainers for Board and committee memberships were pro-rated.
4
Mr. Crown received $40,000 in compensation during 2011 in consideration of his service as a member of the Compliance Committee of the board of directors of JPMorgan Chase Bank, N.A. (the “Bank”), a wholly-owned subsidiary of JPMorgan Chase. Each non-management director serving on the Bank Compliance Committee is paid $2,500 for each committee meeting attended.
5
Mr. Jackson received $110,000 in compensation during 2011 in consideration of his service as a director of J.P. Morgan Securities Ltd., an indirect wholly-owned subsidiary of JPMorgan Chase headquartered in London. Mr. Jackson also received $42,500 in compensation during 2011 in consideration of his service as a member of the Bank Compliance Committee.
 
Security ownership of directors and executive officers
Our share retention policies require share ownership for directors and executive officers, as described at page 23.
The following table shows the number of shares of common stock and common stock equivalents beneficially owned as of February 29, 2012, including shares that could have been acquired within 60 days of that date through the exercise of stock options or stock appreciation rights (“SARs”), together with additional underlying stock units as described in note 3 to the table, by each director and nominee, the current executive officers named in the Summary compensation table, and all directors, nominees and executive officers as a group. Unless otherwise indicated, each of the named individuals and member of the group has sole voting power and sole investment power with respect to shares owned. The number of shares beneficially owned, as that term is defined by Rule 13d-3 under the Securities Exchange Act of 1934, as of February 29, 2012, by all directors and executive officers as a group and by each director and named executive officer individually is less than 1% of our outstanding common stock.



JPMorgan Chase & Co./ 2012 Proxy Statement
 
13



We have been notified by BlackRock, Inc., 40 East 52nd Street, New York, NY 10022, that, as of December 31, 2011, it, in its capacity as a parent holding company or control person in accordance with SEC Rule 13d-1(b)(1)(ii)(G), is the beneficial owner of 213,278,198 shares of our common stock, representing 5.61% of our outstanding common stock. According to the Schedule 13G dated January 20, 2012, filed with the SEC, in the aggregate, BlackRock, Inc. and the affiliated entities included in the Schedule 13G (“BlackRock”) have sole dispositive power and sole voting power over 213,278,198 shares.
Security ownership:
 
 
 
 
 
 
 
 
 
 
 
 
Beneficial ownership
 
 
 
 
Name
 
Common
Stock (#) 1, 2

 
Options/SARs
exercisable within
60 days (#)

 
Total  beneficial
ownership (#)

 
Additional
underlying stock
units (#) 3

 
Total (#)

James A. Bell
 
135

 
0

 
135

 
4,775

 
4,910

Crandall C. Bowles
 
6,280

 
0

 
6,280

 
42,131

 
48,411

Douglas L. Braunstein
 
487,155

 
440,769

 
927,924

 
369,393

 
1,297,317

Stephen B. Burke
 
32,107

 
0

 
32,107

 
61,361

 
93,468

David M. Cote
 
14,000

 
0

 
14,000

 
35,448

 
49,448

James S. Crown 4
 
11,369,019

 
0

 
11,369,019

 
116,251

 
11,485,270

James Dimon 5
 
5,120,108

 
1,361,380

 
6,481,488

 
692,746

 
7,174,234

Ina R. Drew 5
 
661,357

 
710,769

 
1,372,126

 
639,178

 
2,011,304

Mary Callahan Erdoes
 
152,616

 
845,934

 
998,550

 
411,375

 
1,409,925

Timothy P. Flynn
 
3,250

 
0

 
3,250

 
0

 
3,250

Ellen V. Futter
 
951

 
0

 
951

 
68,157

 
69,108

William H. Gray, III
 
0

 
0

 
0

 
89,061

 
89,061

Laban P. Jackson, Jr. 5
 
22,900

 
19,475

 
42,375

 
90,601

 
132,976

David C. Novak
 
158,520

 
0

 
158,520

 
70,892

 
229,412

Lee R. Raymond 5
 
1,850

 
0

 
1,850

 
165,443

 
167,293

James E. Staley
 
402,558

 
1,279,800

 
1,682,358

 
469,856

 
2,152,214

William C. Weldon
 
1,166

 
0

 
1,166

 
49,034

 
50,200

All directors, nominees and current executive officers as a group (26 persons) 5
 
19,798,166

 
11,184,799

 
30,982,965

 
5,563,843

 
36,546,808

 
1
Shares owned outright, except as otherwise noted.
2
Includes shares pledged as security, including shares held by brokers in margin loan accounts whether or not there are loans outstanding, as follows: Mr. Crown, 11,010,795 shares; Mr. Burke, 32,107 shares; and all directors and executive officers as a group, 11,042,902 shares.
3
Amounts include for directors and executive officers, shares or deferred stock units, receipt of which has been deferred under deferred compensation plan arrangements. For executive officers, amounts also include unvested restricted stock units (“RSUs”) and share equivalents attributable under the JPMorgan Chase 401(k) Savings Plan.
4
Includes 139,406 shares Mr. Crown owns individually; 9,463,672 shares owned by partnerships of which Mr. Crown is a partner; 1,547,123 shares owned by a partnership whose partners include a corporation of which Mr. Crown is a director, officer and shareholder, and a trust of which Mr. Crown is a beneficiary. Also includes 168,305 shares owned by trusts of which Mr. Crown is a co-trustee and beneficiary; 12,373 shares owned by Mr. Crown’s spouse; and 38,140 shares held in trusts for the benefit of his children. Mr. Crown disclaims beneficial ownership of the shares held by the various persons and entities described above except for the shares he owns individually and, with respect to shares owned by entities, except to the extent of his pecuniary interest in such entities.
5
As of February 29, 2012, Mr. Dimon held 12,142 depositary shares, each representing a one-tenth interest in a share of JPMorgan Chase’s Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series I (“Series I Preferred”), of which 3,264 depositary shares are held in trusts for which he disclaims beneficial ownership except to the extent of his pecuniary interest, and 1,851 depositary shares are held by his spouse. Ms. Drew held 492 depositary shares of Series I Preferred. Mr. Jackson held 400 depositary shares of Series I Preferred and 15,000 depositary shares, each representing a 1/400th interest in a share of JPMorgan Chase’s 8.625% Non-Cumulative Perpetual Preferred Stock, Series J (“Series J Preferred”). Mr. Raymond held 2,000 depositary shares of Series I Preferred. All directors and current executive officers as a group own 15,034 depositary shares of Series I Preferred and 15,200 depositary shares of Series J Preferred.



14
 
JPMorgan Chase & Co./ 2012 Proxy Statement



 
Compensation Discussion and Analysis
Executive summary
JPMorgan Chase continues to invest in our businesses and develop our people in order to have world-class franchises that provide great services to our customers and clients and make a positive impact in communities globally. The strength of the Firm globally and across the businesses continued to be reflected in our performance in 2011. A few highlights were:
Record net income of $19 billion, up 9% from the prior year
Earnings per share of $4.48, up 13% from the prior year
Return on tangible common equity1 of 15%
In this section we briefly describe our philosophy and approach to compensation, our 2011 performance and the compensation decisions for our Chief Executive Officer (CEO) and other Named Executive Officers (NEOs). The CEO and other NEOs are members of the Operating Committee, the Firm’s most senior management committee responsible for the major lines of business and functions of the Firm.
Compensation philosophy and practices The performance of JPMorgan Chase depends on the quality of our people and strength of our leadership, both in the customer-facing areas and in the risk and control and other support functions essential to the business and our customers. Attracting, developing and retaining key diverse talent and achieving balanced compensation arrangements are essential to our success. Our compensation philosophy, policies and practices drive accountability, and seek to reflect the interplay among risk, financial performance and compensation, especially as it relates to risk assessment and risk-adjusted performance.
The JPMorgan Chase Compensation practices and principles are provided in Appendix C and the major compensation elements we use in our programs are summarized in Appendix D. The practices and principles set out key concepts and how the Firm implements them in administering compensation, including:
Independent Board oversight of the Firm’s compensation practices and principles and their implementation
A recognition that competitive and reasonable compensation helps attract and retain the high quality people necessary to grow and sustain our business
A focus on multi-year, long-term, risk-adjusted performance and rewarding behavior that generates sustained value for the Firm through business cycles
A focus on the performance of the individual employee, the relevant line of business or function and the Firm as a whole
Performance assessments that are broad-based and balanced, including an emphasis on teamwork and a “shared success” culture
A significant stock component (with deferred vesting) for shareholder alignment and retention of top talent. For the CEO and other Named Executive Officers:
— More than 90% of their 2011 total compensation is performance-based variable compensation
— 65% of their total compensation is in the form of long-term equity-based incentive awards, with the value ultimately dependent on stock price performance
— Shares received from equity awards are subject to robust retention requirements and a prohibition on hedging
Very strict limits or prohibitions on executive perquisites, special executive retirement and severance plans, and no golden parachutes
Although awards are made with the expectation that they will vest in accordance with their terms, all awards contain strong recovery provisions, and additional risk-related recovery provisions apply to awards to the Operating Committee and to a group of senior employees we refer to as Tier 1 employees with primary responsibility for risk positions and risk management.
— In 2012, we also added protection-based vesting provisions to equity awards for the Operating Committee and other Tier 1 employees with specific financial thresholds that will result in formal compensation reviews and are designed to be effective in the event of material losses or earnings substantially below the Firm’s potential. These and other provisions are described further at page 24.
Pay for performance The Compensation & Management Development Committee uses its business judgment to determine the compensation of the CEO and other members of the Operating Committee because it is important to focus

JPMorgan Chase & Co./ 2012 Proxy Statement
 
15



on long-term results and a qualitative and quantitative view of their total contribution. In determining total compensation, the Compensation & Management Development Committee considers the overall scope of an executive’s responsibilities, the executive’s performance history with the Firm, comparisons with other executives within the Firm, external market compensation data, and the overall performance of the Firm and the LOB or function the executive leads.
The Board looks for executive performance to be appropriately sustained over multiple time periods, and superior performance to be achieved across multiple factors.
As Chairman and CEO, Mr. Dimon is responsible overall for guiding the Firm’s financial performance and growth, its strategic and operational priorities, risk and control management, and management development and succession planning. Mr. Dimon reviews the priorities for the Firm with the Board of Directors and, in consultation with the Compensation & Management Development Committee and the Board, establishes the priorities for each LOB CEO annually, which are the priorities of the businesses they lead. Heads of functions also review and establish their priorities with the CEO.
Mr. Dimon discusses with the Compensation & Management Development Committee his assessment of the performance of each member of the Operating Committee with respect to individual contributions, and business or function performance, as well as overall Firm performance. Mr. Dimon makes compensation recommendations to the Compensation & Management Development Committee for their consideration as part of their approval process.
Business-specific objectives are evaluated at various points during the year, including during the budget process and monthly business reviews. Each of our businesses reviews its priorities with investors at our annual Investor Day, held most recently on February 28, 2012. Each LOB CEO also reviews 2011 results and the outlook for the future in letters in the Annual Report. We recommend reading those letters and the Chairman’s letter for a fuller understanding of the priorities and performance of the Firm and its businesses. Appendix E is a summary of firmwide and LOB priorities and progress.
 
2011 Business performance overview
Despite the continued challenges of our economic environment, the Firm achieved record net income of $19 billion in 2011, or $4.48 per share, on revenue of $97.2 billion, and made significant investments to continue to build our market leading franchises. As described in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Annual Report, our 2011 financial results were stronger relative to 2010 results, which were also very strong. A few highlights are referenced below.

Year-over-year performance comparison of key Firm financial metrics

 
 
 
 
 
 
 
Financial metrics
 
2011

 
2010

 
Change

Net Income (billions)
 
$
19.0

 
$
17.4

 
+9
%
EPS
 
$
4.48

 
$
3.96

 
+13
%
ROE
 
11
%
 
10
%
 
 
ROTCE 1
 
15
%
 
15
%
 
 
Tier 1 Capital ratio
 
12.3
%
 
12.1
%
 
 
Tier 1 Common capital ratio 2
 
10.1
%
 
9.8
%
 
 
Strong client relationships and continued investments for growth resulted in good performance across most of the Firm’s businesses.
— #1 ranking for Global Investment Banking Fees for 2011
— Credit card sales volume up 10% for 2011; net charge-offs improved
— Commercial Banking reported record revenue and net income for 2011; strong loan growth, up 13%; record deposit balances, up 26%
— Treasury & Securities Services reported record deposit balances, up 28% for 2011
— Asset Management reported record revenue for 2011
— Gained market share in the mortgage business
— Recent Fortune ranking – #1 Bank; #22 Best Company in the world.

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JPMorgan Chase & Co./ 2012 Proxy Statement



The Firm maintained a fortress balance sheet:
— Basel I Tier 1 Common of $123 billion2, or 10.1%2, and estimated Basel III Tier 1 Common of 7.9%2
— Credit reserves at $28.3 billion, with loan loss coverage ratio at 3.35% 3 of total loans
— Total deposits of $1.1 trillion, up 21% from prior year
Throughout 2011, JPMorgan Chase continued to play a constructive and important leadership role in supporting consumers, businesses, and communities and in continuing to invest in the Firm’s future.
Supporting consumers
Supporting businesses
Supporting our communities
Investing in the Firm’s future
• In 2011, we:
     — Provided $252 billion of
         credit to consumers
     — Provided new credit cards
         to 8.5 million people
     — Originated over 765,000
         mortgages
• Since 2009 we offered over 1.2 million mortgage modifications and completed approximately 452,000 to help struggling homeowners

• Provided $545 billion of
    credit to businesses in 2011,
    up 28%, including:
    — $257 billion for
         Investment Bank clients,
         up 29%
    — $106 billion for
         Commercial Banking
         clients, up 18%
    — $65 billion for Treasury &
         Securities Services clients,
         up 14%
    — $100 billion for Asset
         Management clients, up
         48%
    — $17 billion to U.S. small
         businesses clients, up
         52%
• Raised $1.0 trillion of capital
    for clients in 2011, up 23%


• In 2011, we:
    — Raised $68 billion of
        capital for and provided
        credit to over 1,200 not-
        for-profit and government
        entities, including states,
        municipalities, hospitals
        and universities
    — Donated more than $200
        million to not-for-profits in
        our communities worldwide
    — Donated 85 homes to
        wounded veterans
    — Hired 3,000 U.S. military
        veterans

• Consumer & Business Banking opened 260 new branches; added 3,800 salespeople in 2011
• Global Corporate Bank expanded to 250 bankers, covering 3,500 corporate clients around the world; opened more than 20 new offices outside the U.S. over the last two years
• Asset Management added 160 private bank client advisors in 2011
• The Firm added more than 17,000 jobs in the U.S. in 2011
• Conducted on-going training, development, diversity and succession planning reviews across the Firm


1
Tangible common equity (“TCE”), a non-GAAP financial measure, represents common stockholders’ equity (i.e., total stockholders’ equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities. ROTCE, a non-GAAP financial ratio, measures the Firm’s earnings as a percentage of TCE. In management’s view, these measures are meaningful to the Firm, as well as analysts and investors in assessing the Firm’s use of equity, and in facilitating comparisons with competitors.
2
Tier 1 common capital ratio (“Tier 1 common ratio”) is Tier 1 common capital divided by risk-weighted assets. The Firm uses Tier 1 common capital (“Tier 1 common”) along with the other capital measures to assess and monitor its capital position. For further discussion of Tier 1 common capital ratio, see Regulatory capital on pages 119–122 of our 2011 Annual Report.
3
The ratio of the allowance for loan losses to end-of-period loans excludes the following: loans accounted for at fair value and loans held-for-sale; purchased credit-impaired (“PCI”) loans; and the allowance for loan losses related to PCI loans. The allowance for loan losses related to the purchase credit-impaired portfolio totaled $5.7 billion at December 31, 2011.
 

Compensation decisions for Named Executive Officers
The Compensation & Management Development Committee determines compensation for the CEO and makes a recommendation to the Board for its ratification. In 2011, in determining compensation for 2010 and considering the desired structure and mix of compensation going forward, the Compensation & Management Development Committee set the base salary for NEOs other than Mr. Dimon at $750,000 effective February 2011, and for Mr. Dimon at $1,500,000 effective March 2011.
James Dimon. For Mr. Dimon, the performance of the Firm and the individual LOBs reflected his continued leadership and sustained long-term contribution in developing and implementing the strategy of the Firm. The Firm continued its multi-year focus on strengthening its excellent client-facing franchises, continuing investment in organic growth opportunities, and maintaining its fortress balance sheet. As illustrated above, throughout 2011, JPMorgan Chase continued to play a constructive and important leadership role in supporting consumers, businesses and communities and in continuing to invest in the Firm’s future. The Compensation & Management Development Committee noted substantial progress in meeting the Firm’s priorities, and also is aware of the importance of meeting heightened regulatory standards and expectations in both the consumer and wholesale businesses. The Compensation & Management Development Committee also considered Mr. Dimon’s compensation in relation to the Firm’s total shareholder return, ROE, ROTCE, and earnings per share on a through-the-cycle basis.

JPMorgan Chase & Co./ 2012 Proxy Statement
 
17



For 2012, the Compensation & Management Development Committee and the Board approved compensation for Mr. Dimon, in addition to his base salary of $1,500,000, of a cash incentive payment of $4,500,000 and equity incentives with a grant date fair value of $17,000,000 in the form of restricted stock units and stock appreciation rights as detailed in the table of Salary and incentive compensation at page 20. Mr. Dimon’s compensation for 2011 was unchanged from 2010 on a total compensation basis, with the increase in his salary offset by a corresponding decrease in his cash incentive. Consequently, the mix of compensation between annual cash compensation (salary plus cash incentive) and long-term incentives in the form of restricted stock units (“RSUs”) and stock appreciation rights (“SARs”) was also the same. The chart below summarizes elements of CEO performance and the compensation awarded.
Multi-year priorities
 
Compensation
Mr. Dimon’s leadership and management are reflected in the Firm’s progress toward achieving its multi-year priorities, as further described in Appendix E. Of note are the following:
Ÿ Strength of the Firm’s 2011 operating results and financial performance
Record net earnings of $19 billion
ROE of 11% and ROTCE of 15% for the year
EPS of $4.48 per share, 13% increase from 2010
Ÿ Strong relative performance against key competitors across key financial and qualitative measures
Ÿ An uninterrupted record of delivering quarterly and annual earnings throughout the crisis, and subsequent recession, which was one of the most difficult and challenging times ever for our industry and country
Ÿ Maintenance of a fortress balance sheet
Ÿ Continued investment in organic growth and strengthening of the Firm’s major businesses
Ÿ Active management for regulatory change
Ÿ Leading the management succession process and development of senior executives
 
The Compensation & Management Development Committee and the Board approved compensation for 2011 of:


The following provides highlights of performance considered in compensation determinations for the NEOs other than Mr. Dimon. For such executives, the Compensation & Management Development Committee considered the performance objectives and achievements for the areas they lead, as well as internal and external comparison data. Compensation for Ms. Drew, Ms. Erdoes and Mr. Staley decreased from the prior year in amounts ranging from 4% to 7% on a total compensation basis. Mr. Braunstein’s decrease in compensation also reflected the change in his position to CFO. These compensation determinations reflect recognition of substantial progress in meeting the objectives of the LOBs and the Firm as a whole, but also continuing challenges in economic and financial conditions globally.
Douglas Braunstein. Mr. Braunstein has been CFO since 2010, prior to which he led Investment Banking coverage for the Americas and held other senior roles in the Investment Bank. During 2011, Mr. Braunstein continued the Firm’s fundamental objectives of maintaining strong financial discipline, guarding safety and soundness, liquidity management, assisting in managing the Firm’s interaction with regulatory and supervisory authorities, and collaborating with the LOBs to drive business performance, growth, efficiency and returns.
Maintaining strong financial discipline includes maintaining world-class controls, sound accounting standards, delivering transparent public reporting and having effective management information systems.
Mr. Braunstein is responsible for maintaining contact with investors, analysts and ratings agencies and in communicating the strategic direction of the Firm.
Mr. Braunstein led the Firm’s internal capital planning processes, which include the LOB capital allocation process, assessment of the Firm’s capital under a series of baseline and adverse economic and financial scenarios, and planning the Firm’s ability to return capital to shareholders while maintaining a fortress balance sheet.

18
 
JPMorgan Chase & Co./ 2012 Proxy Statement



Ina Drew. Ms. Drew has served as Chief Investment Officer since 2005, prior to which she was head of Global Treasury. The Chief Investment Office manages the Firm’s investment exposure while helping to advise lines of business on their own investment strategies. The Chief Investment Office is responsible for managing the Firm’s interest rate risk, foreign exchange risk and other structural risks, each of which are critical measures for the Firm.
Ms. Drew successfully accomplished her business and people agenda objectives for 2011 by creating shareholder value through risk management activities across a broad array of market sectors and currencies with the help of a very knowledgeable leadership team that Ms. Drew has developed over a long career in various locations around the globe.
Mary Callahan Erdoes. Ms. Erdoes has been CEO of Asset Management since 2009. In 2011, Ms. Erdoes continued a focus on priorities that included maintaining strong financial and investment performance, growing AM’s client franchise, investing in technology to support growth and achieve efficiencies, maintaining strong risk controls, and developing and retaining talent. Three important financial measures for Asset Management are revenue growth, pretax earnings margin and ROE.
For 2011, AM achieved record revenues of $9.5 billion, a 6% increase over 2010 and the third consecutive year of growth.
AM achieved an ROE of 25% compared to a performance target of 35% +/- through-the cycle and a pretax earnings margin of 26%.
At the end of 2011, assets under management (“AUM”) in the top two fund quartiles were 48%, 72% and 78%, respectively, over a 1-, 3- and 5-year time period.
AM showed strong growth in long-term AUM flows, loan balances, deposit balances, and in Private Banking, Institutional, Retail and International revenues.
Continued investments were made in the technology infrastructure to support both the growth and control agendas and AM also standardized investment risk analysis across global products as part of enterprise-wide risk management.
James Staley. Mr. Staley has been the CEO of the Investment Bank since 2009, having rejoined the IB after 10 years leading Asset Management. In 2011, the Investment Bank continued to focus on the multi-year strategic priorities established in 2010, including developing the Investment Bank’s core client franchise, expanding in growth markets, executing our technology reengineering program and prudently managing risk and capital.
The IB delivered net income of $6.8 billion on revenue of $26.3 billion. ROE was 17% on $40 billion of allocated capital, a result in line with the IB’s target of 17% +/- through-the-cycle that was set several years ago.
The IB served over 21,000 corporate and investor clients around the world, and in 2011, helped clients raise $433 billion of capital.
In terms of growth priorities, the IB footprint was extended internationally both directly and through development of the Global Corporate Bank, with new capabilities added in over 20 locations. In Commodities, the IB completed the integration of assets acquired from RBS Sempra in 2010, and we are now one of the top three firms in this market with over 2,000 active clients.
The IB has continued its five-year Strategic Reengineering Program focused on trading platforms, over-the-counter clearing requirements and our core processing infrastructure. In risk and capital management, the IB focused on credit and market risk discipline and efficient capital management, reducing risk–weighted assets by over $80 billion.
Mr. Staley also maintained the IB’s leadership with a focus on the Firm’s reputation and developing and retaining top talent.




JPMorgan Chase & Co./ 2012 Proxy Statement
 
19



 
2011 Compensation
The following table shows annual salary in 2011 and incentive compensation awarded in 2012 for 2011 performance, which reflects the Compensation & Management Development Committee’s view of compensation determinations for 2011 and is guided by our core compensation philosophy and approach.
Salary and incentive compensation
 
 
 
 
 
 
 
 
 
Name and principal position
 
Year
 
Annual compensation
         Salary ($) 1

 
Incentive compensation
 
 
     Cash ($)

 
        RSUs ($) 2

 
         SARs ($) 3

 
  Total ($)

James Dimon
 
2011
 
$
1,500,000

 
$
4,500,000

 
$
12,000,000

 
$
5,000,000

 
$
23,000,000

Chairman and CEO
 
2010
 
1,000,000

 
5,000,000

 
12,000,000

 
5,000,000

 
23,000,000

 
 
2009
 
1,000,000

 
0

 
7,952,400

 
6,244,300

 
15,196,700

Douglas L. Braunstein 4
 
2011
 
750,000

 
2,900,000

 
4,350,000

 
1,500,000

 
9,500,000

Chief Financial Officer
 
2010
 
400,000

 
3,840,000

 
5,760,000

 
2,016,900

 
12,016,900

Ina R. Drew 4
 
2011
 
750,000

 
4,700,000

 
7,050,000

 
1,500,000

 
14,000,000

Chief Investment Officer
 
2010
 
500,000

 
5,000,000

 
7,500,000

 
2,016,900

 
15,016,900

Mary Callahan Erdoes
 
2011
 
750,000

 
4,700,000

 
7,050,000

 
2,000,000

 
14,500,000

CEO Asset Management
 
2010
 
500,000

 
4,600,000

 
6,900,000

 
3,025,400

 
15,025,400

 
 
2009
 
300,000

 
3,035,000

 
4,677,900

 
1,101,900

 
9,114,800

James E. Staley
 
2011
 
750,000

 
5,300,000

 
7,950,000

 
2,000,000

 
16,000,000

CEO Investment Bank
 
2010
 
500,000

 
5,400,000

 
8,100,000

 
3,025,400

 
17,025,400

 
 
2009
 
500,000

 
2,000,000

 
5,174,100

 
2,216,000

 
9,890,100

1
Salary reflects the annualized amounts as of December 31 for each year. Effective February 2011, each of the Named Executive Officers, except for Mr. Dimon, received a salary increase; Mr. Dimon received a salary increase effective March 2011.
2
The RSUs granted for 2011 vest in two equal installments on January 13, 2014 and 2015. Each RSU represents the right to receive one share of common stock on the vesting date and non-preferential dividend equivalents, payable in cash, equal to any dividends paid during the vesting period. RSUs have no voting rights. Additional conditions applicable to these awards are described at page 24.
3
The Firm awarded SARs to the Named Executive Officers, effective January 18, 2012, with an exercise price of $35.61. The SARs will become exercisable 20% per year over the five-year period from January 18, 2012. All shares obtained upon exercise must be held until the fifth year after grant and are subject to the Firm’s stock retention requirement. The SARs had a grant date fair value of $8.89 per SAR. Assumptions under the Black-Scholes valuation model were used to determine grant date fair value. Additional conditions applicable to these awards are described at page 24.
4
Mr. Braunstein and Ms. Drew were not Named Executive Officers in 2009.
The above table is presented to show how the Compensation & Management Development Committee viewed compensation actions, but it differs substantially from the Summary Compensation Table (“SCT”) required by the SEC and is not a substitute for the information required by the SCT at page 26.
The SCT shows compensation information in a format required by the SEC. There are two principal differences between the SCT and the above table:
The Firm grants both cash and equity incentive compensation after the earnings for a performance year have been announced. In both the above table and the SCT, cash incentive compensation granted in 2012 for 2011 performance is shown as 2011 compensation. The above table treats equity awards similarly, so that equity awards granted in 2012 for 2011 performance are shown as 2011 compensation. The SCT does not follow this treatment and instead reports the value of equity awards in the year in which they are made. As a result, equity awards granted in 2012 for 2011 performance are shown in the above table as 2011 compensation, but the SCT reports for 2011 the value of equity awards granted in 2011 in respect of 2010 performance.
The SCT reports the change in pension value and nonqualified deferred compensation earnings and all other compensation. These amounts are not part of current compensation determinations and are not shown above.
 
Advisory resolution to approve executive compensation
Proposal 3 is an annual advisory resolution to approve executive compensation, and the Board recommends that shareholders vote for approval of this resolution. Shareholders approved a similar resolution in 2009 and 2010 by an

20
 
JPMorgan Chase & Co./ 2012 Proxy Statement



average vote of 96% and in 2011 by a vote of 73%, in each case as a percentage of shares cast including abstentions. We believe the change in 2011 was attributable to a change in a recommendation by a proxy advisory firm that cited as a key reason for its recommendation the discretionary nature of the Firm’s executive compensation program.
The Compensation & Management Development Committee has considered making a portion of incentive awards for the CEO and other members of the Operating Committee formulaic, based on pre-set targets, but believes that:
its current approach provides a disciplined assessment of multi-year priorities and achievements and has resulted in proper alignment of compensation and performance, and
there is a greater risk of misaligning incentives and creating unintended consequences with a formulaic approach than the current approach of carefully considering a broader spectrum of factors relative to overall performance. History has shown as many disadvantages to shareholders as advantages to formulaic pay plans.
Although awards are not made on a formulaic basis, the terms of the 2012 RSU awards to members of the Operating Committee and other Tier 1 employees contain protection-based vesting conditions described at page 24 that add specific numerical thresholds that will result in formal compensation reviews and are designed to be effective in the event of material losses or earnings substantially below the Firm’s potential.
The Firm conducts twice-annual outreach discussions with its major shareholders on compensation and other governance matters and considers shareholder views expressed in those discussions as well as the results of the say on pay and other shareholder input.
 
Compensation framework
Corporate governance and Board oversight JPMorgan Chase’s compensation framework is supported by our corporate governance and board oversight. The Board of Directors, through the Compensation & Management Development Committee, oversees our compensation programs, including overall accruals, mix of cash/stock, deferral percentages, and vehicles for delivering performance-based incentives, including equity award terms and conditions. The Board of Directors regularly reviews financial performance, risk management and incentive compensation.
Compensation is a focus of our regulators. The Compensation & Management Development Committee is periodically apprised of regulatory developments and compliance requirements in the principal jurisdictions in which we operate. Our compensation programs are intended to be consistent with applicable regulatory standards. In addition to approving compensation for Operating Committee members, the Compensation & Management Development Committee approves the formula, pool calculation and performance goals for the shareholder-approved Key Executive Performance Plan (“KEPP”) as required by Section 162(m)(1) of the U.S. Internal Revenue Code, reviews line of business total incentive accruals versus performance throughout the year, approves final aggregate incentive funding, and approves total equity grants under the Firm’s long-term incentive plan and the terms and conditions for each type of award. The Compensation & Management Development Committee also reviews the compensation of a number of highly compensated individuals across the Firm globally and reviews the compensation of certain covered employees, such as employees in the U.K. covered by regulations of the Financial Services Authority, and employees in the U.S. covered by guidance of the Federal Reserve.
The Compensation & Management Development Committee each year reviews with the Chief Risk Officer the risks that the Firm faces and elements of our organizational structure, management practices and compensation programs that would discourage unnecessary or excessive risk-taking. The Compensation & Management Development Committee also meets at least annually with one or more members of the Risk Policy Committee.
The Compensation & Management Development Committee does not require all compensation to be awarded in a tax-deductible manner, but it is their intent to do so when consistent with overall corporate goals. The Compensation & Management Development Committee has delegated authority to the Chief Human Resources Officer to administer and amend the compensation and benefits programs.
As noted above, Mr. Dimon discusses with the Compensation & Management Development Committee his assessment of the performance of each member of the Operating Committee with respect to individual contributions, and business or function performance, as well as overall Firm performance. Mr. Dimon makes compensation recommendations to the Compensation & Management Development Committee for their approval. No member of the Operating Committee other than the CEO has a role in making a recommendation to the Compensation & Management Development Committee as to the compensation of any member of the Operating Committee.
Internal Audit conducts regular, independent audits of the Firm’s compliance with its established policies and controls and applicable regulatory requirements regarding incentive compensation management. Audit findings are reported to appropriate levels of management, and all adversely-rated audits are reported to the Audit Committee of the Board of Directors.

JPMorgan Chase & Co./ 2012 Proxy Statement
 
21



Relevant competitor framework We view benchmarking against comparison groups as important for an understanding of practices of the market, to stay competitive and to use market factors to inform, but not override, our focus on pay for performance and internal equity. The Compensation & Management Development Committee reviews actual compensation levels, typically from public data, for companies that either directly compete with us for business and/or talent or are general industry global organizations with similar scope, size or other characteristics to JPMorgan Chase. Because we view our executive officers as highly talented executives capable of rotating among the leadership positions of our businesses and key functions, we also place importance on the internal pay relationships among members of our Operating Committee.
As part of benchmarking we consider the following companies in two different peer frames:
Primary, industry specific, competitor group:
American Express
Goldman Sachs
Bank of America
Morgan Stanley
Citigroup
Wells Fargo
General industry global organizations including:
Altria
GE
Pfizer
Boeing
Hewlett-Packard
Procter & Gamble
Chevron
IBM
Time Warner
Cisco
Johnson & Johnson
United Technologies
Comcast
Merck
Walmart
Disney
Oracle
3M
ExxonMobil
Pepsico
 
Due to the diverse business model and operations of our various lines of business, other firms considered for comparison by our LOBs are Barclays, BNY Mellon, Capital One Financial, Credit Suisse, Deutsche Bank, HSBC, and UBS.
The Compensation & Management Development Committee and Board of Directors did not engage the services of a compensation consultant in 2011. Management provides the Compensation & Management Development Committee with both internal and external compensation data.
Integrated risk, compensation and financial management framework We approach our incentive compensation arrangements through an integrated risk, compensation and financial management framework. JPMorgan Chase has in place a robust risk management discipline to capture, monitor, and control the risks created by its business activities. The goal is to not only manage the dynamic risks of the Firm, but also to create a culture of risk awareness and personal accountability. Any substantial introduction of emerging risks or increase in risks routinely taken would be largely controlled by the risk limits in place or identified through the frequent risk reporting that occurs throughout the Firm. This risk discipline seeks to ensure that the potential for excessive risk-taking by any individual, group, or business is controlled, regardless of the motivation.
Applying a disciplined financial management and measurement system is another important element that seeks to ensure that our financial performance results are risk-adjusted and can be measured objectively in light of performance targets, competitor performance, quality of earnings and the credit cycle. Our approach to financial measurement is based on two key principles:
Earnings recognition, where appropriate, reflects the inherent risks of positions taken to generate profits.
All LOBs are measured with earnings and balance sheets as though they were stand-alone companies. This approach is reflected in arms-length agreements and market-based pricing for revenue sharing among businesses, funds transfer pricing, expense allocations and capital allocations.
We use balancing mechanisms, such as risk-adjusted metrics, deferrals, clawbacks and three- and five-year vesting on long-term incentives to seek to ensure that compensation considers the relationship of near-term rewards to longer-term risks:
The use of risk-adjusted financial results in compensation arrangements seeks to ensure that longer-term risks are first quantified and then applied in current-year incentives. Therefore, a person’s incentive compensation in the current year would be appropriately affected by a number of factors, such as capital charges, valuation adjustments, reserving, and other factors resulting from the consideration of long-term risks.

22
 
JPMorgan Chase & Co./ 2012 Proxy Statement



The majority of compensation plans at JPMorgan Chase address potential timing conflicts by including payment deferral features. Awards that are deferred into equity have multi-year vesting. By staggering the vesting of equity awards over time, the interests of employees to build long-term, sustainable performance (i.e., quality earnings) are better aligned with the long-term interests of both customers and shareholders.
Incentives are split between cash and deferred equity, with the percentage being deferred and awarded in equity increasing as an employee’s incentive compensation increases.
Stringent recovery provisions are in place for incentive awards (cash and equity incentive compensation).
As part of our control processes, compensation of risk and control professionals is not predominantly based on the performance of the business they oversee.
Pay mix Our compensation structure is designed to contribute to the achievement of the Firm’s short-term and long-term strategic and operational objectives, while avoiding risk-taking inconsistent with the Firm’s risk management strategy. This is accomplished through a balanced total compensation program comprised of a mix of fixed pay (base salary) and variable pay in the form of cash incentives and long-term, equity-based incentives that vest over time. The percentage of equity is higher for more highly compensated employees, thus increasing the aggregate value subject to the continued performance of the Firm. We also believe that providing the appropriate level of salary and annual cash incentive is important in ensuring that our senior officers are not overly focused on the short-term performance of our stock. In the Committee’s judgment, striking the right balance between short-term and long-term incentives is accomplished by awarding 60% or more of incentive compensation in the form of long-term equity incentives to members of the Operating Committee.
Equity grant practices — Equity grants are awarded as part of the annual compensation process and as part of employment offers for new hires. Equity-based incentives are granted in the form of RSUs and SARs. RSU grants generally vest 50% after two years and 50% after three years. SARs become exercisable 20% per year over five years and any shares received upon exercise must be held for not less than five years from the grant date.
In each case, the grant price is not less than the average of the high and the low prices of JPMorgan Chase common stock on the grant date. Grants made as part of the annual compensation process are generally awarded in January after earnings are released and generally in the form of RSUs. RSUs carry no voting rights; however, dividend equivalents are paid on the RSUs at the time actual dividends are paid on shares of JPMorgan Chase common stock. The Firm does not grant options with restoration rights and prohibits repricing of stock options and SARs.
Required share retention Share retention policies apply to our directors, members of the Operating Committee and members of the Executive Committee. The Executive Committee is a group of approximately 65 executives, which includes the Operating Committee. Directors pledge to retain all shares of JPMorgan Chase while they serve as a director. Operating Committee members are expected to establish and maintain a significant level of direct ownership. For Mr. Dimon and other members of the Operating Committee, after-tax shares they receive from equity-based awards, including options, are subject to a 75% retention requirement during the first 10 years from grant of the award and 50% thereafter; members of the Executive Committee who are not members of the Operating Committee are required to retain at least 50% of such shares. Half of unvested RSUs (the approximate after tax-equivalent) are included as part of both the ownership and the retention calculation. For members of the Executive Committee who are not members of the Operating Committee, the retention requirement does not apply to shares received as part of incentive compensation in excess of the percentage that would be received under the firmwide stock-cash table generally applicable to employees at such incentive compensation level. Executives are subject to these retention requirements during their service on the Operating Committee or the Executive Committee; any exceptions are subject to approval by the General Counsel.
The Firm’s percentage retention requirements result in NEOs being required to hold shares that have a value equal to a substantial multiple of their salaries. For Mr. Dimon, his share ownership, as shown in the Security Ownership table at page 14, was substantially in excess of his required retention as of that date and his required retention was more than 20 times his base salary.
No hedging
Operating Committee and Executive Committee members and Directors: No hedging of the economic risk of their ownership of our shares is permitted, even for shares owned outright. No short sales, no hedging of unvested RSUs or unexercised options or SARs, no hedging of deferred compensation.
Other employees: No short sales, no hedging of unvested RSUs or unexercised options or SARs, no hedging of deferred compensation. If they own shares outright and can sell them, they are permitted to hedge them, subject to compliance with window period policies that restrict transactions in JPMorgan Chase’s shares pending the release of earnings and applicable preclearance rules.

JPMorgan Chase & Co./ 2012 Proxy Statement
 
23



Long-standing recovery provisions Incentive awards are intended and expected to vest in accordance with their terms but we have long had strong recovery provisions that would permit recovery of incentive compensation awards in appropriate circumstances. We retain the right to reduce current year incentives to redress any prior imbalance that we have subsequently determined to have existed, and a clawback review or other recovery mechanism may be initiated as a result of a material restatement of earnings or by acts or omissions of employees as outlined below, including a failure to supervise in appropriate circumstances. Beyond the recovery provisions that apply to all employees, additional provisions apply to the Operating Committee and to other Tier 1 employees.
The Firm may seek repayment of cash and equity incentive compensation in the event of a material restatement of the Firm’s financial results for the relevant period under our recoupment policy adopted in 2006.
Equity awards vest over multiple years, with RSUs vesting 50% after two years and 50% after three years and SARs becoming exercisable 20% per year over five years. Awards are subject to the Firm’s right to cancel an unvested or unexercised award, and to require repayment of the value of certain shares distributed under awards already vested if:
the employee is terminated for cause or the Firm determines after termination that the employee could have been terminated for cause,
the employee engages in conduct that causes material financial or reputational harm to the Firm or its business activities,
the Firm determines that the award was based on materially inaccurate performance metrics, whether or not the employee was responsible for the inaccuracy,
the award was based on a material misrepresentation by the employee,
and for members of the Operating Committee and Tier 1 employees, such employees improperly or with gross negligence fail to identify, raise, or assess, in a timely manner and as reasonably expected, risks and/or concerns with respect to risks material to the Firm or its business activities.
For members of the Operating Committee, all SARs and half of RSUs granted in 2012 are subject to possible cancellation or deferral in scheduled vesting or exercisability in the event the CEO determines that the performance of the executive in relation to the priorities for such executive’s position, or the Firm’s performance in relation to the priorities for which the executive shares responsibility as a member of the Operating Committee, have been unsatisfactory for a sustained period of time. Such determination is subject to ratification by (and for an award to the CEO would be made by) the Compensation & Management Development Committee.
Protection-based vesting — In 2012, we added provisions to our equity awards for the Operating Committee and other Tier 1 employees that we call protection-based vesting. These provisions add specific financial thresholds that will result in formal compensation reviews. If the business financial results are below the applicable threshold, formal reviews will be conducted to determine the action to be taken, if any, under the appropriate recovery provisions. These provisions were designed to be effective in the event of material losses or earnings substantially below the Firm’s potential that could create substantial financial risk. 
For members of the Operating Committee and other Tier 1 employees, a protection-based vesting provision was added to 2012 awards such that a portion of RSUs scheduled to vest in the third year may be cancelled if the business results of the employee’s LOB does not meet an applicable financial threshold for any year during the vesting period. For most LOBs, the applicable financial threshold will be negative annual pre-provision net income.
For the Operating Committee, the following protection-based vesting provisions were added to RSUs awarded in 2012:
— Half of RSUs may be cancelled if an employee in the LOB of the Operating Committee member had an award cancelled because the LOB business results are below the applicable financial threshold or if the Firm’s reported net income is negative for any year during the vesting period.
— Half of RSUs scheduled to vest in 2015 will be cancelled, absent extraordinary circumstances, if the Firm does not meet a 15% Cumulative Return on Tangible Common Equity over the period 2012, 2013 and 2014 (the sum of the Firm’s reported net income for all three years, divided by reported year-end tangible equity averaged over the three years).
In addition to formal recovery provisions and protection-based vesting, the Compensation & Management Development Committee believes that inappropriate risk-taking is also discouraged by management and compensation practices we have long employed. Employee performance is subject to frequent assessment, and we retain the flexibility to reduce current year incentives. Where warranted, individuals may be terminated for cause and may be required to forfeit unvested awards, with certain previously distributed shares also subject to recovery.

24
 
JPMorgan Chase & Co./ 2012 Proxy Statement



There are no golden parachutes or special severance plans
No golden parachutes for any executives.
No employment contracts other than occasional exceptions upon hire. No change-in-control agreements.
No special severance programs for Operating Committee or Executive Committee members; the Firm’s policy limits severance to a maximum of 52 weeks salary based on years of service.
Equity award terms provide that awards continue to vest on the original schedule, without acceleration and subject to additional restrictions, for employees who have resigned and meet the Firm’s full-career eligibility requirements.
There are no special executive benefits
No pension credits for incentives.
No 401(k) Savings Plan matching contributions for any senior executive.
No special medical, dental, insurance or disability benefits for executives. The higher an executive’s compensation, the higher the premiums they pay.
No private club dues, car allowances, financial planning, tax gross-ups for benefits.
Voluntary deferred compensation program is limited to a maximum contribution of $1 million annually, with a $10 million lifetime cap for cash deferrals made after 2005.
The Firm reports the cost of Mr. Dimon’s personal use of the Firm’s aircraft and cars and the cost of residential security services. The Firm requires such use as a matter of security protection for Mr. Dimon and does not view these items as special executive benefits.
Talent management, development and succession planning As part of our resolve to focus on long-term sustained value, we look to ensure that we are developing leaders for the future. We have introduced a disciplined process of talent reviews focused on thorough assessments, enhanced executive development programs and rotations of top executives to prepare them for greater responsibility. We are committed to having a strong pipeline to deal with succession for our Operating Committee, including the CEO position.
At least annually the independent directors make an evaluation of the Chairman and Chief Executive Officer, normally in connection with a review of executive officer annual compensation. Succession planning is also considered at least annually by the independent directors with the Chief Executive Officer. The Compensation & Management Development Committee regularly discusses management development and provides updates to the full Board.
 
 
 
 
 
Compensation & Management Development Committee report
The Compensation & Management Development Committee has reviewed the Compensation Discussion and Analysis and discussed that analysis with management.
Based on such review and discussion with management, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and our Annual Report on Form 10-K for the year ended December 31, 2011. This report is provided as of March 20, 2012, by the following independent directors, who comprise the Compensation & Management Development Committee:
Lee R. Raymond (Chairman)
Stephen B. Burke
David C. Novak
William C. Weldon

The above section was intended to describe our 2011 performance, the compensation decisions for our Named Executive Officers and the Firm’s philosophy and approach to compensation. The following tables at pages 26-32 present additional information required in accordance with SEC rules, including the Summary compensation table.

JPMorgan Chase & Co./ 2012 Proxy Statement
 
25



 
Executive compensation tables
The following tables and related narratives present the compensation for our Named Executive Officers in the format specified by the SEC. The below table does not reflect equity awards made in 2012 for 2011 performance. The table of Salary and incentive compensation at page 20 shows how the Compensation & Management Development Committee viewed compensation actions.
I. Summary compensation table (SCT)
Name and principal position
 
Year
 
Salary ($) 1

 
Bonus ($) 2

 
Stock
awards ($) 3

 
Option awards ($) 3

 
Change in
pension value
and non-
qualified
deferred
compensation
earnings ($) 4

 
All other
compen-
sation ($)

 
Total ($)

James Dimon
 
2011
 
$
1,416,667

 
$
4,500,000

 
$
12,000,000

 
$
5,000,000

 
$
45,471

 
$
143,277

5 
$
23,105,415

Chairman and CEO
 
2010
 
1,000,000

 
5,000,000

 
7,952,400

 
6,244,300

  
39,965

 
579,624

 
20,816,289

 
 
2009
 
1,000,000

 
0

 
0

 
0

  
56,386

 
265,708

  
1,322,094

Douglas L. Braunstein 6
 
2011
 
720,833

 
2,900,000

 
5,760,000

 
2,016,900

 
1,640,092

 
0

 
13,037,825

Chief Financial Officer
 
2010
 
383,333

 
3,840,000

 
10,080,000

 
934,100

  
1,431,272

 
0

  
16,668,705

Ina R. Drew 6
 
2011
 
729,167

 
4,700,000

 
7,500,000

 
2,016,900

 
563,799

 
0

 
15,509,866

Chief Investment Officer
 
2010
 
500,000

 
5,000,000

 
8,937,000

 
1,108,000

  
398,231

 
0

  
15,943,231

Mary Callahan Erdoes
 
2011
 
729,167

 
4,700,000

 
6,900,000

 
3,025,400

 
38,352

 
0

 
15,392,919

CEO Asset Management
 
2010
 
483,333

 
4,600,000

 
4,677,900

 
1,101,900

 
29,485

 
0

 
10,892,618

 
 
2009
 
300,000

 
3,035,000

 
3,200,000

 
3,883,000

 
35,621

 
0

 
10,453,621

James E. Staley
 
2011
 
729,167

 
5,300,000

 
8,100,000

 
3,025,400

 
470,745

 
0

  
17,625,312

CEO Investment Bank
 
2010
 
500,000

 
5,400,000

 
5,174,100

 
2,216,000

  
328,914

 
0

  
13,619,014

 
 
2009
 
500,000

 
2,000,000

 
2,250,000

 
3,883,000

  
327,492

 
0

  
8,960,492

1
Salary reflects the actual amount paid in each year.
2
Includes amounts awarded, whether paid or deferred. Cash incentive compensation reflects compensation for the period presented, which was awarded in the following year.
3
Includes amounts awarded during the year shown. Amounts are the fair value on the grant date (or, if no grant date was established, on the award date). The Firm’s accounting for employee stock-based incentives (including assumptions used to value employee stock options and SARs) granted during the years ended December 2011, 2010 and 2009, is described in Note 10 to the Firm’s Consolidated Financial Statements in the 2011 Annual Report at pages 222–224.
4
Amounts are the aggregate change in the actuarial present value of the accumulated benefits under all defined benefit and actuarial pension plans (including supplemental plans) for the respective years shown. Amounts shown also include earnings in excess of 120% of the applicable federal rate on deferred compensation balances where the rate of return is not calculated in the same or in a similar manner as earnings on hypothetical investments available under the Firm’s qualified plans: Mr. Braunstein, $1,431,889 and $1,296,173, and Ms. Drew, $73,184 and $65,057 in 2011 and 2010, respectively.
5
The All other compensation column for Mr. Dimon includes: $55,579 for personal use of aircraft; $66,232 for personal use of cars; $21,375 for the cost of residential security paid by the Firm; and $91 for the cost of life insurance premiums paid by the Firm (for basic life insurance coverage equal to one times salary up to a maximum of $100,000, which program covers all benefit-eligible employees).
Incremental costs are determined as follows:
Aircraft: operating cost per flight hour for the aircraft type used, developed by an independent reference source, including fuel, fuel additives and lubricants; landing and parking fees; crew expenses; small supplies and catering; maintenance, labor and parts; engine restoration costs; and a maintenance service plan.
Cars: annual lease valuation of the assigned car; annual insurance premiums; fuel expense; estimated annual maintenance; and annual driver compensation, including salary, overtime, benefits and bonus. The resulting total is allocated between personal and business use based on mileage.
6
Mr. Braunstein and Ms. Drew were not Named Executive Officers in 2009.


26
 
JPMorgan Chase & Co./ 2012 Proxy Statement



II. 2011 Grants of plan-based awards 1 
The following table shows grants of plan-based awards made in 2011 for the 2010 performance year.
Name
Grant date
 
Approval
date
 
Stock awards
 
Option awards
 
Grant date fair
value ($)

 
Number of
shares of
stock or
units (#) 2

 
Number of
securities
underlying
options (#) 3

 
Exercise
price
($/Sh) 4

 
James Dimon
2/16/2011
 
2/16/2011
 
251,415

 

 

 
$
12,000,000

 
2/16/2011
 
2/16/2011
 

 
367,377

 
$
47.73

 
5,000,000

Douglas L. Braunstein
1/19/2011
 
1/18/2011
 
130,067

 

 

 
5,760,000

 
1/19/2011
 
1/18/2011
 

 
153,847

 
44.29

 
2,016,900

Ina R. Drew
1/19/2011
 
1/18/2011
 
169,358

 

 

 
7,500,000

 
1/19/2011
 
1/18/2011
 

 
153,847

 
44.29

 
2,016,900

Mary Callahan Erdoes
1/19/2011
 
1/18/2011
 
155,809

 

 

 
6,900,000

 
1/19/2011
 
1/18/2011
 

 
230,770

 
44.29

 
3,025,400

James E. Staley
1/19/2011
 
1/18/2011
 
182,907

 

 

 
8,100,000

 
1/19/2011
 
1/18/2011
 

 
230,770

 
44.29

 
3,025,400

1
Effective January 18, 2012, the Firm awarded RSU awards and stock-settled SARs as part of the 2011 annual incentive compensation. Because these awards were granted in 2012, they do not appear in this table, which is required to include only equity awards actually granted during 2011. These awards are reflected in the “Salary and incentive compensation” table at page 20.
2
The RSUs vest in two equal installments on January 13, 2013 and 2014. Each RSU represents the right to receive one share of common stock on the vesting date and non-preferential dividend equivalents, payable in cash, equal to any dividends paid during the vesting period. RSUs have no voting rights.
3
These SARs will become exercisable 20% per year over the five-year period from the date of grant. Shares resulting from exercise must be held at least five years from the grant date.
4
The Firm awarded SARs to the Named Executive Officers other than Mr. Dimon effective January 19, 2011, with an exercise price of $44.29, and to Mr. Dimon effective February 16, 2011, with an exercise price of $47.73.

JPMorgan Chase & Co./ 2012 Proxy Statement
 
27



III. Outstanding equity awards at fiscal year-end 2011
The following table shows the number of shares of the Firm’s common stock underlying (i) exercisable and unexercisable stock options and SARs and (ii) RSUs that had not yet vested held by the Firm’s Named Executive Officers on December 31, 2011.
 
 
Option awards
 
Stock awards
 
Name
 
Number of
securities
underlying
unexercised
options: #
exercisable
1

 
Number of
securities
underlying
unexercised
options: #
unexercisable 1

 
Option
exercise
price ($)

 
Option
expiration
date
 
Option grant
date 2
 
Number of
shares or
units of 
stock that have not 
vested (#)

 
Market value
of shares or
units of stock
that have not
vested ($) 1

 
Stock award
grant date 2
 
James Dimon
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
462,000

 

 
$
31.2197

 
4/16/2012
 
4/16/2002
 a 

 

 


 
 
600,481

 

 
37.4700

 
1/20/2015
 
1/20/2005
 b 

 

 


 
 

 
2,000,000

 
39.8300

 
1/22/2018
 
1/22/2008
 e 

 

 


 
 
112,712

 
450,850

 
43.2000

 
1/20/2020
 
2/3/2010
 a 
195,704

 

 
2/3/2010
 b 
 
 

 
367,377

 
47.7300

 
2/16/2021
 
2/16/2011
 a 
251,415

 


 
2/16/2011
 b  
Total awards (#)
 
1,175,193

 
2,818,227

 

 

 


447,119

 
$
14,866,707

 


Market value of in-the-money options ($)
 
$
937,999

 
$
0

 

 

 



 
 
 


Douglas L. Braunstein
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
162,416

 

 
$
36.8500

 
1/17/2012
 
1/17/2002
 d  

 

 


 
 
100,000

 

 
34.7800

 
10/20/2015
 
10/20/2005
 c  

 

 


 
 
160,000

 
40,000

 
45.7900

 
10/18/2017
 
10/18/2007
 a  

 

 


 
 
60,000

 
180,000

 
19.4900

 
1/20/2019
 
1/20/2009
 a  
71,851

 

 
1/20/2009
 
 
 
15,000

 
60,000

 
43.2000

 
1/20/2020
 
1/20/2010
 a  
233,361

 

 
1/20/2010
 
 
 

 
153,847

 
44.2900

 
1/19/2021
 
1/19/2011
 a  
130,067

 


 
1/19/2011
b 
Total awards (#)
 
497,416

 
433,847

 

 

 


435,279

 
$
14,473,027

 


Market value of in-the-money options ($)
 
$
825,600

 
$
2,476,800

 

 

 



 
 
 


Ina R. Drew
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
250,000

 

 
$
34.7800

 
10/20/2015
 
10/20/2005
 c  

 

 


 
 
180,000

 
120,000

 
39.8300

 
1/22/2018
 
1/22/2008
 a  

 

 


 
 
100,000

 
150,000

 
19.4900

 
1/20/2019
 
1/20/2009
 a  
51,322

 

 
1/20/2009
b 
 
 
20,000

 
80,000

 
43.2000

 
1/20/2020
 
2/3/2010
 a  
219,933

 

 
2/3/2010
 
 
 

 
153,847

 
44.2900

 
1/19/2021
 
1/19/2011
 a  
169,358

 


 
1/19/2011
 
Total awards (#)
 
550,000

 
503,847

 

 

 


440,613

 
$
14,650,382

 


Market value of in-the-money options ($)
 
$
1,376,000

 
$
2,064,000

 

 

 



 
 
 











28
 
JPMorgan Chase & Co./ 2012 Proxy Statement



 
 
Option awards
 
Stock awards
 
Name
 
Number of
securities
underlying
unexercised
options: #
exercisable
1

 
Number of
securities
underlying
unexercised
options: #
unexercisable 1

 
Option
exercise
price ($)

 
Option
expiration
date
 
Option grant
date 2
 
Number of
shares or
units of 
stock that have not 
vested (#)

 
Market value
of shares or
units of stock
that have not
vested ($) 1

 
Stock award
grant date 2
 
Mary Callahan Erdoes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25,645

 

 
$
36.8500

 
1/17/2012
 
1/17/2002
 d  

 

 


 
 
100,000

 

 
34.7800

 
10/20/2015
 
10/20/2005
 c  

 

 


 
 
200,000

 

 
46.7900

 
10/19/2016
 
10/19/2006
 c  

 

 


 
 
160,000

 
40,000

 
45.7900

 
10/18/2017
 
10/18/2007
 a  

 

 


 
 
200,000

 
300,000

 
19.4900

 
1/20/2019
 
1/20/2009
 a  
82,115

 

 
1/20/2009
 
 
 
19,890

 
79,563

 
43.2000

 
1/20/2020
 
2/3/2010
 a  
115,120

 

 
2/3/2010
b 
 
 

 
230,770

 
44.2900

 
1/19/2021
 
1/19/2011
 a  
155,809

 

 
1/19/2011
 
Total awards (#)
 
705,535

 
650,333

 

 

 


353,044

 
$
11,738,713

 


Market value of in-the-money options ($)
 
$
2,752,000

 
$
4,128,000

 


 

 




 
 
 


James E. Staley
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
76,324

 

 
$
36.8500

 
1/17/2012
 
1/17/2002
 d  

 

 


 
 
152,264

 

 
21.8700

 
2/12/2013
 
2/12/2003
 b  

 

 


 
 
131,382

 

 
39.9600

 
2/11/2014
 
2/11/2004
 b  

 

 


 
 
250,000

 

 
34.7800

 
10/20/2015
 
10/20/2005
 c  

 

 


 
 
240,000

 
160,000

 
39.8300

 
1/22/2018
 
1/22/2008
 a  

 

 


 
 
200,000

 
300,000

 
19.4900

 
1/20/2019
 
1/20/2009
 a  
57,737

 

 
1/20/2009
 
 
 
40,000

 
160,000

 
43.2000

 
1/20/2020
 
2/3/2010
 a  
127,330

 

 
2/3/2010
b 
 
 

 
230,770

 
44.2900

 
1/19/2021
 
1/19/2011
 a  
182,907

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