DEF 14A 1 jpmc2016definitiveproxy.htm DEF 14A DEF 14A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Securities Exchange Act of 1934
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JPMorgan Chase & Co.
270 Park Avenue
New York, New York 10017-2070
April 7, 2016
Dear fellow shareholders:
We are pleased to invite you to the annual meeting of shareholders to be held on May 17, 2016, at the Royal Sonesta Hotel, New Orleans, LA. As we have done in the past, in addition to considering the matters described in the proxy statement, we will provide an update on the Firm’s activities and performance.
We hope that you will attend the meeting in person. We 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 2016 Annual Meeting of Shareholders and Proxy Statement
DATE
 
Tuesday, May 17, 2016
 
TIME
 
10:00 a.m. Central Time
 
PLACE
 
Royal Sonesta Hotel
300 Bourbon Street
New Orleans, LA 70130
 
 
 
MATTERS TO BE
 
l Election of directors
VOTED ON
 
l Advisory resolution to approve executive compensation
 
 
l Ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016
 
 
l Shareholder proposals, if they are introduced at the meeting
 
 
l Any other matters that may properly be brought before the meeting
 
 
 
 
 
By order of the Board of Directors
 
 
 
 
 
 
Anthony J. Horan
 
 
Secretary
 
 
 
 
 
 
April 7, 2016
 

 

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; your broker has discretionary authority to vote on the appointment of the auditors. See “How votes are counted” on page 99 of this proxy statement.
On or about April 7, 2016, we sent to shareholders of record at the close of business on March 18, 2016, a Proxy Statement, together with an accompanying form of proxy card and Annual Report, or a Notice of Internet Availability of Proxy Materials (“Notice”).
Our 2016 Proxy Statement and Annual Report for the year ended December 31, 2015, are available free of charge on our website at jpmorganchase.com/annual-report-proxy. Instructions on how to receive a printed copy of our proxy materials are included in the Notice, as well as in this Proxy Statement.
If you plan to attend the meeting in person, you will be required to present a valid form of government-issued photo identification, such as a valid driver’s license or passport, and proof of ownership of our common stock as of our record date March 18, 2016. See “Attending the annual meeting” on page 100 of this proxy statement.





 
 
 
 
 
 
 
 
 
 






PROPOSAL 2 (continued):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 










2016 Proxy summary
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all the information you should consider, and you should read the entire proxy statement carefully before voting.
 
Proxy statement
Your vote is very important. 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. This proxy statement is being sent and made available to our shareholders on or about April 7, 2016.

 
Annual meeting overview
MATTERS TO BE VOTED ON
 
MANAGEMENT PROPOSALS
 
The Board of Directors recommends you vote FOR each director nominee and FOR the following proposals (for more information see page referenced):
 
 
1. Election of directors
 
 
2. Advisory resolution to approve executive compensation
 
 
3. Ratification of PricewaterhouseCoopers LLP as the Firm’s independent registered public accounting firm
 
 
 
 
SHAREHOLDER PROPOSALS (if they are introduced at the meeting)
 
The Board of Directors recommends you vote AGAINST each of the following shareholder proposals 
(for more information see page referenced):
 
 
 
 
4. Independent board chairman — require an independent chair
 
 
5. How votes are counted — count votes using only for and against and ignore abstentions
 
 
6. Vesting for government service — prohibit vesting of equity-based awards for senior executives due to voluntary resignation to enter government service
 
 
7. Appoint a stockholder value committee — address whether divestiture of all non-core banking business segments would enhance shareholder value
 
 
8. Clawback amendment — defer compensation for 10 years to help satisfy any monetary penalty associated with violation of law
 
 
  9. Executive compensation philosophy — adopt a balanced executive compensation philosophy with social factors to improve the Firm’s ethical conduct and public reputation
 
 



JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    1


Election of Directors

The Board of Directors has nominated the 11 individuals listed below as directors; if elected by shareholders at our annual meeting, they will be expected to serve until next year’s annual meeting. All of the nominees are currently serving as directors.
The Board has nominated 11 directors: the 10 independent directors and the CEO
 
 
 
 
 
 
 
 
 
 
 
NOMINEE
 
AGE
 
PRINCIPAL OCCUPATION
 
DIRECTOR SINCE
 
OTHER PUBLIC COMPANY BOARDS (#)
 
COMMITTEE MEMBERSHIP1
Linda B. Bammann
 
60
 
Retired Deputy Head of Risk Management of JPMorgan Chase & Co.2
 
2013
 
0
 
Public Responsibility;
Directors' Risk Policy
James A. Bell
 
67
 
Retired Executive Vice President of The Boeing Company
 
2011
 
3
 
Audit
Crandall C. Bowles
 
68
 
Chairman Emeritus of The Springs Company
 
2006
 
1
 
Audit;
Public Responsibility (Chair)
Stephen B. Burke
 
57
 
Chief Executive Officer of NBCUniversal, LLC
 
2004
Director of Bank One Corporation from 2003 to 2004
 
1
 
Compensation & Management Development;
Corporate Governance & Nominating
James S. Crown
 
62
 
President of Henry Crown and Company
 
2004
Director of Bank One Corporation from 1991 to 2004
 
1
 
Directors' Risk Policy (Chair)
James Dimon
 
60
 
Chairman and Chief Executive Officer of JPMorgan Chase & Co.

 
2004
Chairman of the Board of Bank One Corporation from 2000 to 2004
 
0
 
 
Timothy P. Flynn
 
59
 
Retired Chairman and Chief Executive Officer of KPMG
 
2012
 
1
 
Public Responsibility;
Directors' Risk Policy
Laban P. Jackson, Jr.
 
73
 
Chairman and Chief Executive Officer of Clear Creek Properties, Inc.
 
2004
Director of Bank One Corporation from 1993 to 2004
 
0
 
Audit (Chair)
Michael A. Neal
 
63
 
Retired Vice Chairman of General Electric Company and Retired Chairman and Chief Executive Officer of GE Capital
 
2014
 
0
 
Directors' Risk Policy
Lee R. Raymond
(Lead Independent Director)
 
77
 
Retired Chairman and Chief Executive Officer of Exxon Mobil Corporation
 
2001
Director of J.P. Morgan & Co. Incorporated from 1987 to 2000
 
0
 
Compensation & Management Development (Chair);
Corporate Governance & Nominating
William C. Weldon
 
67
 
Retired Chairman and Chief Executive Officer of Johnson & Johnson
 
2005
 
2
 
Compensation & Management Development;
Corporate Governance & Nominating (Chair)
1 
Principal standing committees
2 
Retired from JPMorgan Chase & Co. in 2005


2    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


Performance, governance and compensation highlights1
JPMorgan Chase & Co. continued its strong performance in 2015 under the leadership of Mr. Dimon and the Firm’s senior management and the oversight of our Board of Directors. Below are highlights relating to the Firm’s performance and compensation program, including key changes made taking into account feedback from shareholder engagement.
Strong 2015 performance continues to support sustained shareholder value
 
 • We generated 13% return on tangible common equity (“ROTCE”), as well as record net income and record earnings per share (“EPS”) in 2015. Each of our leading client franchises exhibited strong performance and together delivered significant value.
 • We delivered 8% total shareholder return (“TSR”) in 2015, following 10% in 2014, and continued our record of outperforming the financial services industry TSR since 2008.
 • We reduced expenses by over $2 billion and delivered significant operating leverage, while continuing to invest in marketing, technology and people to grow the business.
 • We continued to simplify and de-risk our balance sheet, reducing our global systematically important bank (“GSIB”) surcharge by 100 basis points (“bps”) during 2015 and helping us optimize capital return to shareholders.
 
We maintain fortress operating principles with a focus on risk, controls and culture
 
 • We maintained our fortress balance sheet, growing our Basel III Advanced Fully Phased-In common equity Tier 1 (“CET1”) capital ratio by 140 bps and our tangible book value per share (“TBVPS”) by 8%, and maintaining $496 billion of high quality liquid assets.
 • Since 2011, our total headcount associated with controls has gone from 24,000 people to 43,000 people, and our total annual control spend has gone from $6 billion to approximately $9 billion over that same time period. We have more work to do, but a strong and permanent foundation is in place.
 • We continued to strengthen and reinforce our culture and business principles.
 
We are committed to good corporate governance and are engaged with our shareholders
 
 • Since 2011, four independent directors have joined the Board; the Board maintains a robust
Lead Independent Director role.
 • Our Board has endorsed the Shareholder Director Exchange (SDX) Protocol as a guide for engagement; in 2015, our shareholder engagement initiatives included:
  more than 90 calls and meetings on strategy, governance and compensation topics with
    shareholders representing over 40% of our shares
  presentations by Firm senior management at 13 investor conferences
  separate outreach sessions regarding our Corporate Responsibility initiatives
 • Since the 2015 annual meeting, our engagement process, and the feedback gained from it, was a significant factor in the Board’s adoption of: (i) a clawback disclosure policy; (ii) a proxy access By-law amendment; and (iii) a Performance Share Unit (“PSU”) program for members of the Operating Committee (“OC”).
 
 
 
Our compensation program is rigorous and long-term
focused
 
 • Our compensation program reflects the Board’s philosophy of linking compensation to the Firm’s long-term performance including: (i) Business Results; (ii) Risk & Control; (iii) Customer & Clients; and (iv) People Management & Leadership.
 • In January 2016, the Board approved the grant of PSUs to OC members under the Firm’s variable compensation program. PSUs will be earned based on the Firm’s ROTCE over a 3-year performance period (see page 49 for details).
 • The majority of OC members’ pay is delivered in equity with multi-year vesting.
 • We have strong stock ownership and retention requirements and long-standing clawback provisions applicable to both cash incentives and equity awards.
 
 
 
CEO pay level reflects our performance
 
 • Mr. Dimon and the other Named Executive Officers (“NEOs”) delivered strong Firm, line of business and individual performance in 2015, continuing their momentum from 2014.
 • Based on exceptional multi-year performance and outstanding performance in 2015, the Compensation & Management Development Committee (“CMDC”) and Board awarded Mr. Dimon total compensation of $27.0 million, with $20.5 million of the variable portion in the form of PSUs, which will not vest unless a threshold performance level is achieved over a
    3-year period.
1 See notes on non-GAAP financial measures on page 112 of this proxy statement.

JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    3


STRONG RESULTS AGAINST BROAD PERFORMANCE CATEGORIES
 Business Results: Delivered strong financial results reflecting solid performance across our four major businesses, while maintaining our fortress balance sheet and meeting or exceeding our capital and expense targets for 2015
Risk & Control: Further strengthened our control environment, including enhancing our technology infrastructure, addressing issues that resulted in supervisory and enforcement actions, investing in training, and rededicating ourselves to the Firm’s Business Principles to further strengthen our culture
Customer & Clients: Enhanced our clients’ experiences by investing in our businesses and leveraging innovative technologies, which further strengthened the market leadership of our franchises
People Management & Leadership: Created a new leadership development program designed to develop outstanding leaders at all levels of management across each line of business (“LOB”) and function
HIGHLIGHTS OF 2015 BUSINESS RESULTS1,2
 
We delivered ROTCE of 13%, achieved record net income and record EPS, and improved or maintained our leading market share position in each of our core businesses notwithstanding continued revenue headwinds from the low interest rate environment and increased capital requirements.


4    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


STRONG ROTCE ON INCREASING CAPITAL
SUSTAINED GROWTH IN BOTH TBVPS AND EPS2
SUSTAINED SHAREHOLDER VALUE3,4
1 
Tangible Common Equity (“TCE”).
2 
2010-2014 has been revised to reflect the adoption of new accounting guidance for investments in affordable housing projects.
3 
The graph depicts Total Shareholder Return ("TSR"); assumes reinvestment of dividends.
4 
For the Firm’s 5-year stock performance, see our Annual Report on Form 10-K for the year ended December 31, 2015, at page 67.

JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    5


OVERVIEW: SHAREHOLDER ENGAGEMENT AND CHANGES MADE TO COMPENSATION & GOVERNANCE
 


6    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


MR. DIMON’S 2015 COMPENSATION REFLECTS EXCEPTIONAL MULTI-YEAR PERFORMANCE
 
The Board’s decision to increase Mr. Dimon’s 2015 compensation to $27.0 million (vs. $20.0 million in 2014) reflects his outstanding performance against four broad performance categories, which the Board uses to assess his performance, including:
Business Results: Exceptional multi-year performance, including strong financial results and substantial progress on long-term objectives such as business simplification, optimization of the balance sheet, reduction of the GSIB surcharge and expense reduction. Additionally, the Firm achieved strong 2015 performance, including 13% ROTCE, record net income, and record EPS.
Risk & Control: Significant enhancements to our control environment, improving both the effectiveness and efficiency, and reinforcement of our Firm culture, by embedding our corporate standards throughout the employee life cycle.
Customer & Clients: Market leadership of our four franchises through significant investments in product innovation and leading edge technologies.
People Management & Leadership: Significant investment in our people, including enhancing diversity programs, building a pipeline of leaders, and developing outstanding talent across the organization.
The Board considered several other factors, some of which are set forth on pages 50-52 of this proxy statement.
CEO COMPENSATION IS ALIGNED WITH LONG-TERM PERFORMANCE
Variability in Mr. Dimon’s pay over the last eight years illustrates our commitment to paying for performance
*The Board significantly reduced Mr. Dimon’s pay in response to Chief Investment Office (“CIO”) trading losses.

JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    7






8    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT




 












Proposal 1:
Election of Directors





 

Our Board of Directors has nominated 11 directors, who, if elected by shareholders at our annual meeting, will be expected to serve until next year’s annual meeting. All nominees are currently directors.
 
RECOMMENDATION:
Vote FOR all nominees
 





JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    9


Proposal 1 — Election of directors
EXECUTIVE SUMMARY
 
Our Board has nominated 11 directors for election at this year’s annual meeting to hold office until the next annual meeting. All of the nominees are currently directors and were elected to the Board by our shareholders at our 2015 annual meeting, each with the support of more than 95% of votes cast. Each has agreed to be named in this proxy statement and to serve if elected. All of the nominees are expected to attend our May 17, 2016, annual meeting.
We know of no reason why any of the nominees would be unable or unwilling to serve if elected. However, if any of our nominees is unavailable for election, the proxies intend to vote your common stock for any substitute nominee proposed by the Board of Directors.
We believe that each nominee has the skills, experience and personal qualities the Board seeks in its directors and that the combination of these nominees creates an effective and well-functioning Board with a diversity of backgrounds, experiences and skill sets that together serve the best interests of the Firm and our shareholders.
The Board of Directors is responsible for overseeing management and providing sound governance on behalf of shareholders. Risk management oversight is a key priority. The Board carries out its responsibilities through, among other things, highly capable independent directors, the Lead Independent Director, a strong committee structure and adherence to our Corporate Governance Principles. The Board conducts an annual assessment aimed at enhancing its effectiveness, as described on page 26 of this proxy statement.
DIRECTOR NOMINATION PROCESS
 
As specified in its charter, the Board’s Corporate Governance & Nominating Committee (“Governance Committee”) oversees the candidate nomination process, which includes the evaluation of both existing Board members and new candidates for Board membership. The Governance Committee recommends to the Board a slate of candidates for election at each annual meeting of shareholders. The Governance Committee’s goal is to put forth a diverse slate of
 
candidates with a combination of skills, experience and personal qualities that will well serve the Board and its committees, our Firm and our shareholders. The Governance Committee considers all relevant attributes of each Board candidate, including professional skills, experience and knowledge, as well as gender, race, ethnicity, nationality and background.
Director succession is also a focus of the Governance Committee and the Board. The Governance Committee seeks to maintain an appropriate balance of Board refreshment and Firm experience. In service of this goal, the Firm maintains a director retirement policy that requires any director to offer not to stand for re-election in each calendar year following a year in which the director will be 72 or older. The Board (other than the affected director) then determines whether or not to accept the offer. In 2015, the Board updated this policy by affirmatively stating its view that directors may make very meaningful contributions to the Board and the Firm well beyond the age of 72. The Board believes that, while refreshment is an important consideration in assessing Board composition, the best interests of the Firm are served by being able to take advantage of all available talent and the Board should not make determinations with regard to membership based solely on age.
Consistent with the director retirement policy described above, two of our director nominees, Lee R. Raymond and Laban P. Jackson, Jr., offered not to stand for re-election this year. The Board reviewed the offers of Mr. Raymond and Mr. Jackson, taking into account ongoing succession planning for the Board and the contributions of each of them to the Firm’s governance. This review also took into account the results of the annual Board and Committee self-assessment processes. The Board determined that Mr. Raymond and Mr. Jackson each reflects the capability and judgment the Board looks for in a director, that each has broad experience both within and outside the Firm that has been and continues to be of great value to the Board and that their continued service as directors would be in the interests of the Firm’s shareholders. Mr. Raymond brings strong leadership skills as Lead Independent Director and as Chairman of the Compensation & Management Development Committee. Mr. Jackson is active as Chairman of the Audit Committee and takes a



10    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


leading role in liaising with regulators worldwide. Both are also active in shareholder engagement. Following this review, the Board determined (with the affected director abstaining with respect to himself) that both Mr. Raymond and Mr. Jackson should be re-nominated for election as directors and therefore not accept either offer. For specific information on each of Mr. Raymond’s and Mr. Jackson’s qualifications and their individual contributions to the Board, including their Board Committee roles, please see pages 18 and 17, respectively, of this proxy statement. For a description of the annual Board and Committee self-assessment process, please see page 26 of this proxy statement.
As part of planning for director succession, the Governance Committee engages in frequent consideration of potential Board candidates and is assisted in identifying potential Board candidates by a third-party advisor. Of the Board’s 10 independent directors, four have joined the Board since 2011.
Candidates for director may be recommended by current Board members, our management, shareholders or third-party advisors. Shareholders who want to recommend a candidate for election to the Board may do so by writing to the Corporate Secretary at: JPMorgan Chase & Co., 270 Park Avenue, New York, NY 10017; or by sending an e-mail to the Office of the Secretary at corporate.secretary@jpmchase.com. The Governance Committee considers shareholder-recommended candidates on the same basis as nominees recommended by Board members, management and third-party advisors.
In addition to the nomination process described above, pursuant to new By-law Section 1.10 adopted in January 2016, shareholders meeting certain minimum ownership requirements now have the right, under specified conditions, to include nominees for director in the Firm’s proxy statement. This right of “proxy access” is described in more detail on page 33 of this proxy statement and was adopted by the Board after consideration of a variety of views on the topic, including views gained through the Firm’s engagement with shareholders.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    11


The Board of Directors has nominated the 11 individuals listed below for election as directors. All of the nominees are currently serving as directors and all except the CEO are independent. We recommend you vote FOR each director.
The Board has nominated 11 directors: the 10 independent directors and the CEO
 
 
 
 
 
 
 
 
 
 
 
NOMINEE
 
AGE
 
PRINCIPAL OCCUPATION
 
DIRECTOR SINCE
 
OTHER PUBLIC COMPANY BOARDS (#)
 
COMMITTEE MEMBERSHIP1
Linda B. Bammann
 
60
 
Retired Deputy Head of Risk Management of JPMorgan Chase & Co.2
 
2013
 
0
 
Public Responsibility;
Directors' Risk Policy
James A. Bell
 
67
 
Retired Executive Vice President of The Boeing Company
 
2011
 
3
 
Audit
Crandall C. Bowles
 
68
 
Chairman Emeritus of The Springs Company
 
2006
 
1
 
Audit;
Public Responsibility (Chair)
Stephen B. Burke
 
57
 
Chief Executive Officer of NBCUniversal, LLC
 
2004
Director of Bank One Corporation from 2003 to 2004
 
1
 
Compensation & Management Development;
Corporate Governance & Nominating
James S. Crown
 
62
 
President of Henry Crown and Company
 
2004
Director of Bank One Corporation from 1991 to 2004
 
1
 
Directors' Risk Policy (Chair)
James Dimon
 
60
 
Chairman and Chief Executive Officer of JPMorgan Chase & Co.

 
2004
Chairman of the Board of Bank One Corporation from 2000 to 2004
 
0
 
 
Timothy P. Flynn
 
59
 
Retired Chairman and Chief Executive Officer of KPMG
 
2012
 
1
 
Public Responsibility;
Directors' Risk Policy
Laban P. Jackson, Jr.
 
73
 
Chairman and Chief Executive Officer of Clear Creek Properties, Inc.
 
2004
Director of Bank One Corporation from 1993 to 2004
 
0
 
Audit (Chair)
Michael A. Neal
 
63
 
Retired Vice Chairman of General Electric Company and Retired Chairman and Chief Executive Officer of GE Capital
 
2014
 
0
 
Directors' Risk Policy
Lee R. Raymond
(Lead Independent Director)
 
77
 
Retired Chairman and Chief Executive Officer of Exxon Mobil Corporation
 
2001
Director of J.P. Morgan & Co. Incorporated from 1987 to 2000
 
0
 
Compensation & Management Development (Chair);
Corporate Governance & Nominating
William C. Weldon
 
67
 
Retired Chairman and Chief Executive Officer of Johnson & Johnson
 
2005
 
2
 
Compensation & Management Development;
Corporate Governance & Nominating (Chair)
1 
Principal standing committees
2 
Retired from JPMorgan Chase & Co. in 2005





12    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


DIRECTOR CRITERIA
 
In selecting candidates for director, the Board looks for individuals with demonstrated expertise and success in one or more specific executive disciplines, and personal attributes and diverse backgrounds.
Executive disciplines
Finance and accounting
 
 
 
 
 
Financial services
 
 
 
 
 
International business operations
 
 
 
 
 
Leadership of a large, complex organization
 
 
 
 
 
Management development and succession planning
 
 
 
 
 
Public-company governance
 
 
 
 
 
Regulated industries and regulatory issues
 
 
 
 
 
Risk management and controls
Personal attributes
Ability to work collaboratively
 
 
 
 
 
Integrity
 
 
 
 
 
Judgment
 
 
 
 
 
Strength of conviction
 
 
 
 
 
Strong work ethic
 
 
 
 
 
Willingness to engage and provide active oversight
The Firm’s director criteria are also discussed in the Corporate Governance Principles document available on our website at jpmorganchase.com, under the heading Governance, which is under the About Us tab.
 
NOMINEES’ QUALIFICATIONS AND EXPERIENCE
 
Our Board believes that these nominees provide our Firm with the combined skills, experience and personal qualities needed for an effective and engaged Board.
The specific experience and qualifications of each nominee are described in the following pages. Unless stated otherwise, all 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 17, 2016, and all other biographical information is as of the date of this proxy statement.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    13


Linda B. Bammann, 60                
 
Director since 2013
Public Responsibility Committee
Directors’ Risk Policy Committee
Retired Deputy Head of Risk Management of JPMorgan Chase
& Co.
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
Experience with regulatory issues
 
 
Extensive background in risk management
 
 
Financial services experience
Linda B. Bammann was Deputy Head of Risk Management at JPMorgan Chase from July 2004 until her retirement in 2005. Previously she was Executive Vice President and Chief Risk Management Officer at Bank One Corporation (“Bank One”) from May 2001 to July 2004 and, before then, Senior Managing Director of Banc One Capital Markets, Inc. She was also a member of Bank One’s executive planning group. From 1992 to 2000 she was a Managing Director with UBS Warburg LLC and predecessor firms.
Ms. Bammann served as a director of The Federal Home Mortgage Corporation (“Freddie Mac”) from 2008 until 2013, during which time she was a member of its Compensation Committee. She served as a member of Freddie Mac’s Audit Committee from 2008 until 2010 and as Chair of its Business and Risk Committee from 2010 until 2013. Ms. Bammann also served as a director of Manulife Financial Corporation from 2009 until 2012. Ms. Bammann was formerly a board member of the Risk Management Association and Chair of the Loan Syndications and Trading Association.
Through her experience on the boards of other public companies and her tenure with JPMorgan Chase and Bank One, Ms. Bammann has developed insight and wide-ranging experience in financial services and extensive expertise in risk management and regulatory issues.
Ms. Bammann graduated from Stanford University and received an M.A. degree in public policy from the University of Michigan.
 
James A. Bell, 67                
 
Director since 2011
Audit Committee
Retired Executive Vice President of The Boeing Company
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
Finance and accounting experience
 
 
Leadership of complex, multi-disciplinary global organization
 
 
Regulatory issues and regulated industry experience
James A. Bell was an Executive Vice President of The Boeing Company, an aerospace company and manufacturer of commercial jetliners and military aircraft, from 2003 until his retirement in April 2012. He was Corporate President from June 2008 until February 2012 and Chief Financial Officer from November 2003 until February 2012.
Over a four-decade corporate career, Mr. Bell led global businesses in a highly regulated industry, oversaw successful strategic growth initiatives and developed expertise in finance, accounting, risk management and controls. 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.
Before being named Chief Financial Officer, Mr. Bell was Senior Vice President of Finance and Corporate Controller. In this position he served as the company’s principal interface with the board’s Audit Committee. He was Vice President of contracts and pricing for Boeing Space and Communications from 1996 to 2000, and before that served as director of business management of the Space Station Electric Power System at the Boeing Rocketdyne unit.
Mr. Bell has been a director of Dow Chemical Company since 2005, of CDW Corporation since March 2015 and of Apple Inc. since September 2015. He is a member of the Board of Trustees at Rush University Medical Center.
Mr. Bell graduated from California State University at Los Angeles.



14    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


Crandall C. Bowles, 68                
 
Director since 2006
Audit Committee
Public Responsibility Committee (Chair)
Chairman Emeritus of The Springs Company
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
International business operations experience
 
 
Management development, compensation and succession planning experience
 
 
Risk management and audit experience
Crandall C. Bowles has been Chairman Emeritus of The Springs Company, a privately owned investment company, since April 2015, prior to which she had been Chairman since 2007. She also served as Chairman of Springs Industries, Inc., a manufacturer of window products for the home, from 1998 until June 2013 when the business was sold. She was a member of its board from 1978 until June 2013 and was Chief Executive Officer from 1998 until 2006. Prior to 2006, Springs Industries included bed, bath and home-furnishings business lines. These were merged with a Brazilian textile firm to become Springs Global Participacoes S.A., a textile home-furnishings company based in Brazil, where Ms. Bowles served as Co-Chairman and Co-CEO from 2006 until her retirement in July 2007.
Ms. Bowles has been a director of Deere & Company since 1999. She served as a director of Sara Lee Corporation from 2008 to 2012 and of Wachovia Corporation and Duke Energy in the 1990s. As an executive at Springs Industries and Springs Global Participacoes, Ms. Bowles gained experience managing international business organizations. As a board member of large, global companies, she has dealt with a wide range of issues including audit and financial reporting, risk management, and executive compensation and succession planning.
Ms. Bowles is a Trustee of the Brookings Institution
and is on the governing boards of the Packard Center for ALS Research at Johns Hopkins and The Wilderness Society.
Ms. Bowles graduated from Wellesley College and received an M.B.A from Columbia University.
 
Stephen B. Burke, 57                
 
Director since 2004 and Director of Bank One Corporation from 2003 to 2004
Compensation & Management Development Committee
Corporate Governance & Nominating Committee
Chief Executive Officer of NBCUniversal, LLC
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
Experience leading large, international, complex businesses in regulated industries
 
 
Financial controls and reporting experience
 
 
Management development, compensation and succession planning experience
Stephen B. Burke has been Chief Executive Officer of NBCUniversal, LLC, and a senior executive of Comcast Corporation, one of the U.S.’s leading providers of entertainment, information and communication products and services, since January 2011. He was Chief Operating Officer of Comcast Corporation from 2004 until 2011, and President of Comcast Cable Communications, Inc. from 1998 until January 2010.
Before joining Comcast, Mr. Burke served with The Walt Disney Company as President of ABC Broadcasting. He joined The Walt Disney Company in January 1986, and helped develop and found The Disney Store and lead a comprehensive restructuring of Euro Disney S.A.
Mr. Burke’s roles at Comcast, ABC, and Euro Disney have given him broad exposure to the challenges associated with managing large and diverse businesses. 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. His tenure at Comcast and ABC gave him experience working in regulated industries, and his work at Euro Disney gave him a background in international business.
Mr. Burke has been a director of Berkshire Hathaway Inc. since 2009.
Mr. Burke graduated from Colgate University and received an M.B.A. from Harvard Business School.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    15


James S. Crown, 62                    
 
Director since 2004 and Director of Bank One Corporation from 1991 to 2004
Directors’ Risk Policy Committee (Chair)
President of Henry Crown and Company
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
Extensive risk management experience
 
 
Management development, compensation and succession planning experience
 
 
Significant financial markets experience
James S. Crown joined Henry Crown and Company, a privately owned investment company that invests in public and private securities, real estate and operating companies, in 1985, and became President in 2002. Before joining Henry Crown and Company, Mr. Crown was a Vice President of Salomon Brothers Inc. Capital Markets Service Group.
Mr. Crown has been a director of General Dynamics Corporation since 1987 and has served as its Lead Director since 2010. He has also been a director of JPMorgan Chase Bank, N.A. since 2010. Mr. Crown served as a director of Sara Lee Corporation from 1998 to 2012.
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 our Board, including risk management, audit and financial reporting, investment management, capital markets activity and executive compensation.
Mr. Crown is a Trustee of the Aspen Institute, the Chicago Symphony Orchestra, the Museum of Science and Industry and the University of Chicago. He is also a member of the American Academy of Arts and Sciences.
Mr. Crown graduated from Hampshire College and received a law degree from Stanford University Law School.
 
James Dimon, 60                    
 
Director since 2004 and Chairman of the Board of Bank One Corporation from 2000 to 2004
Chairman and Chief Executive Officer of JPMorgan Chase & Co.
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
Experience leading a global business in a regulated industry
 
 
Extensive experience leading complex international financial services businesses
 
 
Management development, compensation and succession planning experience
James Dimon became Chairman of the Board on December 31, 2006, and has been Chief Executive Officer and President since December 31, 2005. He was President and Chief Operating Officer following JPMorgan Chase’s merger with Bank One Corporation in July 2004. At Bank One he was Chairman and Chief Executive Officer from March 2000 to July 2004. Before joining Bank One, Mr. Dimon held a wide range of executive roles at Citigroup Inc., the Travelers Group, Commercial Credit Company and American Express Company.
Mr. Dimon is on the Board of Directors of Harvard Business School and Catalyst and is a member of The Business Council. 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 industry, as well as international business expertise. As CEO, he is knowledgeable about all aspects of the Firm’s business activities. His work has given him substantial experience in dealing with government officials and agencies and insight into the regulatory process.
Mr. Dimon graduated from Tufts University and received an M.B.A. from Harvard Business School.



16    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


Timothy P. Flynn, 59                    
 
Director since 2012
Public Responsibility Committee
Directors’ Risk Policy Committee
Retired Chairman and Chief Executive Officer of KPMG
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
Experience in financial services, accounting, auditing and controls
 
 
Leadership of a complex, global business
 
 
Risk management and regulatory experience
Timothy P. Flynn was Chairman of KPMG International, a global professional services organization that provides audit, tax and advisory services, from 2007 until his retirement in October 2011. From 2005 until 2010, he served as Chairman and from 2005 to 2008 as Chief Executive Officer of KPMG LLP in the U.S., the largest individual member firm of KPMG International. Before serving as Chairman and CEO, Mr. Flynn was Vice Chairman, Audit and Risk Advisory Services, with operating responsibility for the Audit, Risk Advisory and Financial Advisory Services practices.
Through his leadership positions at KPMG, Mr. Flynn gained perspective on the evolving business and regulatory environment, experience with many of the issues facing complex, global companies, and expertise in financial services and risk management.
Mr. Flynn has been a director of Wal-Mart Stores, Inc. since 2012 and was a director of the Chubb Corporation from September 2013 until its acquisition in January 2016. He has been a director of the International Integrated Reporting Council since September 2015, and he previously served as a Trustee of the Financial Accounting Standards Board, a member of the World Economic Forum’s International Business Council, and a founding member of The Prince of Wales’ International Integrated Reporting Committee.
Mr. Flynn graduated from The University of St. Thomas, St. Paul, Minnesota and is a member of the school’s Board of Trustees.
 
Laban P. Jackson, Jr., 73                
 
Director since 2004 and Director of Bank One Corporation from 1993 to 2004
Audit Committee (Chair)
Chairman and Chief Executive Officer of Clear Creek Properties, Inc.
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
Experience in financial controls and reporting and risk management
 
 
Extensive regulatory background
 
 
Management development, compensation and succession planning experience
Laban P. Jackson, Jr. has been Chairman and Chief Executive Officer of Clear Creek Properties, Inc., a real estate development company, since 1989. He has been a director of J.P. Morgan Securities plc and of JPMorgan Chase Bank, N.A. since 2010.
Mr. Jackson has dealt with a wide range of issues that are important to the Firm’s business, including audit and financial reporting, risk management, and executive compensation and succession planning. Mr. Jackson generally meets at least annually with the Firm’s principal regulators in the major jurisdictions in which we operate.
Mr. Jackson’s service on the board of the Federal Reserve Bank of Cleveland and on other public and private company boards has given him experience in financial services, audit, government relations and regulatory issues.
Mr. Jackson served as a director of The Home Depot from 2004 to 2008 and a director of the Federal Reserve Bank of Cleveland from 1987 to 1992. He is a member of the Audit Committee Leadership Network, a group of audit committee chairs from some of North America’s leading companies that is committed to improving the performance of audit committees and strengthening trust in the financial markets. He is also an emeritus Trustee of the Markey Cancer Foundation.
Mr. Jackson is a graduate of the United States Military Academy.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    17


Michael A. Neal, 63                    
 
Director since 2014
Directors’ Risk Policy Committee
Retired Vice Chairman of General Electric Company and Retired Chairman and Chief Executive Officer of GE Capital
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
Extensive background in financial services
 
 
Leadership of large, complex, international businesses in a regulated industry
 
 
Risk management and operations experience
Michael A. Neal was Vice Chairman of General Electric Company, a global industrial and financial services company, until his retirement in December 2013 and was Chairman and Chief Executive Officer of GE Capital from 2007 until June 2013. During his career at General Electric, Mr. Neal held several senior operating positions, including President and Chief Operating Officer of GE Capital and Chief Executive Officer of GE Commercial Finance prior to being appointed Chairman and Chief Executive Officer of GE Capital.
Mr. Neal has extensive experience managing large, complex businesses in regulated industries around the world. During his career with General Electric and GE Capital, Mr. Neal oversaw the provision of financial services and products to consumers and businesses of all sizes in North America, South America, Europe, Australia and Asia. His professional experience has provided him with insight and expertise in risk management, strategic planning and operations, finance and financial reporting, government and regulatory relations, and management development and succession planning.
Mr. Neal is a founder of and advisor to Acasta Enterprises Inc., a special purpose acquisition company. Mr. Neal serves on the advisory boards of Georgia Tech’s Sam Nunn School of International Affairs and the Carey Business School at Johns Hopkins, where he is also the executive in residence and senior advisor to the Dean. Mr. Neal is also a trustee of Georgia Tech’s GT Foundation.
Mr. Neal graduated from the Georgia Institute of Technology.
 
Lee R. Raymond, 77 (Lead Independent Director)    
 
Director since 2001 and Director of J.P. Morgan & Co. Incorporated from 1987 to 2000
Compensation & Management Development Committee (Chair)
Corporate Governance & Nominating Committee
Retired Chairman and Chief Executive Officer of Exxon Mobil Corporation
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
Extensive background in public company governance and international business
 
 
Leadership in regulated industries and regulatory issues
 
 
Management development, compensation and succession planning experience
Lee R. Raymond was Chairman of the Board and Chief Executive Officer of ExxonMobil, the world’s largest publicly traded international oil and gas company, from 1999 until he retired in December 2005. He was Chairman of the Board and Chief Executive Officer of Exxon Corporation from 1993 until its merger with Mobil Oil Corporation in 1999 and was a director of Exxon and Exxon Mobil Corporation from 1984 to 2005. Mr. Raymond began his career in 1963 at Exxon.
During his tenure at ExxonMobil and its predecessors, Mr. Raymond gained experience in all aspects of business management, including audit and financial reporting, risk management, executive compensation, marketing, and operating in a regulated industry. He also has extensive international business experience.
Mr. Raymond is a member of the Council on Foreign Relations, an emeritus Trustee of the Mayo Clinic, a member of the National Academy of Engineering and a member and past Chairman of the National Petroleum Council.
Mr. Raymond graduated from the University of Wisconsin and received a Ph.D. in Chemical Engineering from the University of Minnesota.



18    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


William C. Weldon, 67                    
 
Director since 2005
Compensation & Management Development Committee
Corporate Governance & Nominating Committee (Chair)
Retired Chairman and Chief Executive Officer of Johnson & Johnson
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
Extensive background in public company governance and international business
 
 
Leadership of complex, global organization in a regulated industry
 
 
Management development, compensation and succession planning experience
William C. Weldon was Chairman and Chief Executive Officer of Johnson & Johnson, a global healthcare products company, from 2002 until his retirement as Chief Executive Officer in April 2012 and as Chairman in December 2012. He served as Vice Chairman from 2001 and Worldwide Chairman, Pharmaceuticals Group from 1998 until 2001.
At Johnson & Johnson, Mr. Weldon held a succession of executive positions that gave him expertise in consumer sales and marketing, international business operations, financial reporting and regulatory matters.
Mr. Weldon has been a director of CVS Health Corporation since 2013 and of Exxon Mobil Corporation since 2013. Mr. Weldon has been a director and Chairman of the Board of JPMorgan Chase Bank, N.A. since July 2013. He was a director of Johnson & Johnson from 2002 until December 2012, and was a director of The Chubb Corporation from April 2013 until its acquisition in January 2016.
Mr. Weldon is a member of various nonprofit organizations.
Mr. Weldon graduated from Quinnipiac University and is a member of the school’s Board of Trustees.



JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    19


Corporate governance
Our commitment to good corporate governance is integral to our business. Our key governance practices are described below.
PRINCIPLES
 
In performing its role, our Board of Directors is guided by our Corporate Governance Principles, which establish a framework for the governance of the Board and the management of our Firm. The principles are approved by the Board and reflect appropriate and broadly recognized governance practices and regulatory requirements, including the New York Stock Exchange (“NYSE”) corporate governance listing standards. They are reviewed periodically and updated as appropriate. The full text of the Corporate Governance Principles is posted on our website at jpmorganchase.com, under the heading Governance, which is under the About Us tab.
BOARD STRUCTURE AND RESPONSIBILITIES
 
The Board of Directors is responsible for the oversight of management on behalf of our Firm’s shareholders. The Board and its committees meet throughout the year to: (i) review and, where appropriate, approve strategy, business and financial planning and performance, risk, control and financial reporting and audit matters, compensation and management development, corporate culture and public responsibility matters; and (ii) provide oversight and guidance to, and regularly assess the performance of, the Chief Executive Officer (“CEO”) and other senior executives.
The Board’s leadership structure, described below, is designed to promote Board effectiveness and to ensure that authority and responsibility are effectively allocated between the Board and management. The Board considers its leadership structure frequently as part of its succession planning process for senior management and the Board. The Board formally reviews its leadership structure not less than annually as part of its self-assessment process.
The Board believes it is important to retain flexibility to determine the best leadership structure for any particular set of circumstances and personnel. These decisions should not be mechanical; they should be
 
contextual and based on the particular composition of the Board, the individual serving as CEO and the needs and opportunities of the Firm as they change over time.
Factors the Board may consider as part of its review of its leadership structure include:
A review of the respective responsibilities for the positions of Chairman, Lead Independent Director and CEO
Evaluation of the policies and practices in place to provide independent Board oversight of management (including Board oversight of CEO performance and compensation; regularly held executive sessions of the independent directors; Board input into agendas and meeting materials; and Board self-assessment)
The people currently in leadership roles
The Firm’s circumstances at the time, including performance
The potential impact of particular leadership structures on the Firm’s performance
The Firm’s ability to attract and retain qualified individuals for Firm and Board leadership positions
The views of our shareholders
Legislative and regulatory developments regarding board leadership structures
Trends in corporate governance, including practices at other companies, and academic studies on board leadership structures and the impact of leadership structures on shareholder value
Such other factors as the Board may determine
We continue to address shareholder views about Board leadership structure in our shareholder outreach program and regularly share the information gathered through this program with the Board.
Our Board, early in 2016, reviewed its leadership structure, taking into consideration the factors outlined above and feedback from shareholders, and determined that, at the present time, combining the roles of Chairman and CEO, together with a strong Lead Independent Director role, continues to provide the appropriate leadership for and oversight of the Firm and facilitates effective functioning of both the Board



20    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


and management. The Board has separated the positions in the past and may do so again in the future if it believes that doing so would then be in the best interest of the Firm.
Notwithstanding the strong oversight roles of the Lead Independent Director and committee chairs described below, all directors share equally in their responsibilities as members of the Board.
Independent oversight — All of our directors are independent, with the exception of our Chairman and CEO, James Dimon. The independent directors meet in executive session with no management present at each regularly scheduled in-person Board meeting, where they discuss any matter they deem appropriate.
Chairman of the Board — Our Chairman is appointed annually by all the directors. The Chairman’s responsibilities include:
calling Board and shareholder meetings
presiding at Board and shareholder meetings
preparing meeting schedules, agendas and materials, subject to the approval of the Lead Independent Director
Lead Independent Director — The Lead Independent Director is appointed annually by the independent directors. The role includes the authority and responsibility to:
call a Board meeting (as well as a meeting of the independent directors of the Board) at any time
preside over Board meetings when the Chairman is absent or his participation raises a possible conflict
approve Board meeting agendas and add agenda items
preside over executive sessions of independent directors, which take place at every regularly scheduled in-person Board meeting
meet one-on-one with the CEO at every regularly scheduled in-person Board meeting
guide the annual performance evaluation of the Chairman and CEO
guide independent director consideration of CEO compensation
 
guide full Board consideration of CEO succession issues
guide the annual self-assessment of the full Board
facilitate communication between management and the independent directors
be available for consultation and communication with shareholders and other constituencies where appropriate
Committee chairs — The Board has a strong committee structure designed for effective and efficient board operations. All committee chairs are independent and are appointed annually by the Board. See page 23 of this proxy statement for further information about our committees. Committee chairs are responsible for:
calling meetings of their committees
presiding at meetings of their committees
approving agendas, including adding agenda items, and materials for their committee meetings
serving as a liaison between committee members and the Board, and between committee members and senior management, including the CEO
working directly with the senior management responsible for committee matters


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    21


CORPORATE GOVERNANCE STRUCTURE
The Board believes the strong Board committee structure, as shown in the chart below, enhances the Board’s oversight of the Firm’s management. The Operating Committee and other management bodies support and escalate matters to the Board and its committees.



22    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


COMMITTEES OF THE BOARD
 
Our Board has five principal standing committees: Audit Committee, Compensation & Management Development Committee, Corporate Governance & Nominating Committee, Public Responsibility Committee and Directors’ Risk Policy Committee. Committees meet regularly in conjunction with scheduled Board meetings and hold additional meetings as needed.
The charter of each committee is posted on our website at jpmorganchase.com, under the heading Governance, which is under the About Us tab. Each charter is reviewed at least annually as part of the Board’s, and each respective committee’s, self-assessment process. During 2015, amendments to committee charters included:
In March 2015, adding responsibility to approve the appointment, evaluation, compensation and succession planning for the Firm’s General Auditor to the Audit Committee and for the Firm’s Chief Risk Officer to the Directors’ Risk Policy Committee
In October 2015, adding primary responsibility for Board oversight of the Firm’s culture and conduct programs to the Compensation & Management Development Committee charter
The Board has determined that each of our committee members is independent in accordance with NYSE corporate governance listing standards. The Board has also determined that each member of the Audit Committee (James A. Bell, Crandall C. Bowles and Laban P. Jackson, Jr.) is an audit committee financial expert in accordance with the definition established by the U.S. Securities and Exchange Commission (“SEC”).
Mr. Bell is also a member of the audit committee of the board of each of the three other public companies for which he serves as a director. In accordance with the NYSE corporate governance listing standards and the Firm’s Corporate Governance Principles, Mr. Bell sought the approval of the Firm’s Board for his service on these four audit committees at one time. The Board (with Mr. Bell abstaining), taking into consideration Mr. Bell’s qualifications, including his prior service as Chief Financial Officer (“CFO”) of The Boeing Company and the fact that he is an Audit Committee financial expert (as such term is defined by the SEC), together with the totality of his professional commitments and his record
 
of attendance at meetings of JPMorgan Chase’s Board and the committees on which he serves, approved Mr. Bell’s service on these four audit committees, subject to annual review to the extent he continues to serve on more than three audit committees.
Our Board’s Corporate Governance Principles provide that Board members have complete access to management, and that the Board and its committees have the authority and the resources to seek legal or other expert advice from sources independent of management. The committees report their activities to, and discuss their recommendations with, the full Board.
The following highlights some of the key responsibilities of each standing committee. For additional information on the role of certain of the standing committees in connection with risk management oversight see page 26 of this proxy statement.
Audit Committee
Assists the Board in its oversight of:
The independent registered public accounting firm’s qualifications and independence
The performance of the internal audit function and the independent registered accounting firm
Management’s responsibilities to: (i) assure that there is in place an effective system of controls to safeguard the Firm’s assets and income; (ii) assure the integrity of the Firm’s financial statements; and (iii) maintain compliance with the Firm’s ethical standards, policies, plans and procedures, and with laws and regulations
Compensation & Management Development Committee (“CMDC”)
Assists the Board in its oversight of:
Development and succession planning for key executives
Compensation principles and practices, including:
Review and approval of the Firm’s compensation and benefit programs
The competitiveness of these programs
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 or unnecessary risk-taking
The Firm’s culture and conduct program


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    23


Corporate Governance & Nominating Committee
Assists the Board in its oversight of the governance of the Board, including:
Reviewing and recommending proposed nominations for election to the Board
Evaluating the Board’s Corporate Governance Principles and recommending changes
Approving the framework for Board self-assessment
Public Responsibility Committee
Assists the Board in its oversight of the Firm’s positions and practices regarding public responsibility matters and other public policy issues that reflect the Firm’s values and character and impact the Firm’s reputation, including:
Community investment
Fair lending
Sustainability
Consumer practices
Directors’ Risk Policy Committee (“DRPC”)
Assists the Board in its oversight of management’s responsibilities to assess and manage:
The Firm’s credit risk, market risk, structural interest rate risk, principal risk, liquidity risk, country risk and model risk
The governance frameworks or policies for operational risk, compliance risk including fiduciary risk, and reputational risk
Capital and liquidity planning and analysis and approve the Firm’s Risk Appetite Policy and other policies it designates as Primary Risk Policies
The Board has two additional standing committees and may establish additional such committees as needed:
Stock Committee
The committee is responsible for implementing the declaration of dividends, authorizing the issuance of stock, administering the dividend reinvestment plan and implementing share repurchase plans. The committee acts within Board-approved limitations and capital plans.
Executive Committee
The committee 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.
Specific Purpose Committees
The Board establishes committees as appropriate to address specific issues (“Specific Purpose Committees”). The Board currently has four such committees to provide required oversight in connection with certain regulatory orders (“Consent Orders”) issued by the Board of Governors of the Federal Reserve System (“Federal Reserve”) and the Office of the Comptroller of the Currency (“OCC”):
BSA/AML (Bank Secrecy Act/Anti-Money Laundering) Compliance Committee
FX (Foreign Exchange)/Markets Orders Compliance Committee
Sworn Documents Compliance Committee
Trading Compliance Committee
Each Specific Purpose Committee formed to provide Consent Order oversight is comprised of two to four independent directors. They meet to provide oversight for specific aspects of our control agenda and to monitor progress under action plans developed by management to address the issues identified under the applicable Consent Order.
Additional Specific Purpose Committees may be established from time to time to address other issues. The Omnibus Demand Committee is a Specific Purpose Committee established to review shareholder demands made in connection with pending or potential shareholder derivative litigation.
As the Firm achieves its objectives in a specific area, we expect the relevant Specific Purpose Committee will meet less frequently and eventually their work will be concluded, at which time, subject to regulatory consent where applicable, the committee will be disbanded.
In January 2016, the OCC terminated its mortgage-related Consent Order and as a result, the Mortgage Compliance Committee work, including oversight required for the related Federal Reserve Consent Order, has been transitioned to the Audit Committee.



24    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


BOARD COMMITTEE MEMBERSHIP
AND 2015 MEETINGS
 
The following table summarizes the membership of the Board’s principal standing committees and Specific Purpose Committees in 2015, and the number of
 
meetings that were held during 2015. In 2015, 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.
All 2015 nominees were present at the annual meeting of shareholders held on May 19, 2015.

Board committee membership and 2015 meetings
Director
 
Audit
 
Compensation &
Management
Development
 
Corporate
Governance &
Nominating
 
Public
Responsibility
 
Directors’ Risk Policy
 
Specific Purpose Committees 1
Linda B. Bammann
 
 
 
 
 
 
 
Member
 
Member
 
D,E
James A. Bell
 
Member
 
 
 
 
 
 
 
 
 
A
Crandall C. Bowles
 
Member
 
 
 
 
 
Chair
 
 
 
A
Stephen B. Burke
 
 
 
Member
 
Member
 
 
 
 
 
 
James S. Crown
 
 
 
 
 
 
 
 
 
Chair
 
C
James Dimon
 
 
 
 
 
 
 
 
 
 
 
 
Timothy P. Flynn
 
 
 
 
 
 
 
Member
 
Member
 
E
Laban P. Jackson, Jr.
 
Chair
 
 
 
 
 
 
 
 
 
A,B,C,D,F
Michael A. Neal
 
 
 
 
 
 
 
 
 
Member
 
D
Lee R. Raymond 2
 
 
 
Chair
 
Member
 
 
 
 
 
B,D,F
William C. Weldon
 
 
 
Member
 
Chair
 
 
 
 
 
B,E,F
Number of meetings
in 2015
 
17
 
6
 
6
 
5
 
8
 
54
1 
The Board’s separately established Specific Purpose Committees in 2015 were:
A - BSA/AML(Bank Secrecy Act/Anti-Money Laundering) Compliance Committee
B - FX (Foreign Exchange)/Markets Orders Compliance Committee
C - Mortgage Compliance Committee (the committee transitioned oversight to the Audit Committee as of January 2016)
D - Omnibus Demand Committee
E - Sworn Documents Compliance Committee
F - Trading Compliance Committee
2 
Lead Independent Director





JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    25


BOARD’S ROLE IN RISK MANAGEMENT OVERSIGHT
 
Risk is an inherent part of JPMorgan Chase’s business
activities. When the Firm extends a consumer or wholesale loan, advises customers on their investment decisions, makes markets in securities, or offers other products or services, the Firm takes on some degree of risk. The Firm’s overall objective is to manage its businesses, and the associated risks, in a manner that balances serving the interests of our clients, customers and investors and protects the safety and soundness of the Firm.
The Board of Directors provides oversight of risk principally through the Directors’ Risk Policy Committee, Audit Committee and, with respect to compensation and other management-related matters, Compensation & Management Development Committee. Each committee of the Board oversees reputation risk issues within its scope of responsibility.
Directors’ Risk Policy Committee
The DRPC oversees the Firm’s global risk management framework and approves the primary risk-management policies of the Firm. The DRPC’s responsibilities include oversight of management’s exercise of its responsibility to assess and manage risks of the Firm, as well as its capital and liquidity planning and analysis. Breaches in risk appetite tolerances, liquidity issues that may have a material adverse impact on the Firm and other significant risk-related matters are escalated to the DRPC.
Audit Committee
The Audit Committee assists the Board in its oversight of management’s responsibilities to assure that there is 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 and maintain compliance with the Firm’s ethical standards, policies, plans and procedures, and with laws and regulations. In addition, the Audit Committee assists the Board in its oversight of the Firm’s independent registered public accounting firm’s qualifications and independence. The independent Internal Audit function at the Firm is headed by the General Auditor, who reports to the Audit Committee.

 
Compensation & Management Development Committee
The CMDC assists the Board in its oversight of the Firm’s compensation programs and reviews and approves the Firm’s overall compensation philosophy, incentive compensation pools, and compensation practices consistent with key business objectives and safety and soundness. The CMDC reviews Operating Committee members’ performance against their goals, and approves their compensation awards. The CMDC also periodically reviews the Firm’s diversity programs and management development and succession planning, and provides oversight of the Firm’s culture and conduct programs.
BOARD ASSESSMENT
 
The Board conducts an annual self-assessment aimed at enhancing its effectiveness. Through regular assessment of its policies, procedures and performance, the Board identifies areas for further consideration and improvement. In assessing itself, the Board takes a multi-year perspective.
The assessment is led by the independent directors and guided by the Lead Independent Director. Each director is expected to participate and provide feedback on a range of issues, including: the Board’s overall effectiveness; Board composition; the Lead Independent Director’s performance; committee structure; the flow of information received from Board committees and management; the nature and scope of agenda items; and shareholder communication.
In 2015, the Board’s self-assessment also considered actions taken to fulfill responsibilities under the OCC’s “Heightened Standards” for large national banks, including: the requirement that the board of directors require management to establish and implement an effective risk governance framework; provide active oversight of the banking subsidiaries’ risk-taking activities; exercise independent judgement; and provide ongoing training to directors.
Each of the principal standing committees also conducts an annual self-assessment. These assessments are led by the respective committee chairs and generally include, among other topics, a review of the committee charter, the agenda for the coming year and the flow of information received from management.



26    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


The Governance Committee periodically appraises the framework for the Board and committee self-assessment processes and the allocation of responsibility among committees.
BOARD COMMUNICATION
 
The Board plays a key role in communicating our Firm’s strategy and commitment to doing business in accordance with our corporate standards. The Board, as a group or a subset of one or more of its members, meets throughout the year with the Firm’s senior executives, shareholders, regulators and organizations interested in our strategy, performance or business practices.
Shareholder engagement
Engagement and transparency with our shareholders help the Firm gain useful feedback on a wide variety of topics, including corporate governance, compensation practices, shareholder communication, Board composition, shareholder proposals, business performance and the operation of the Firm. This information is shared regularly with the Firm’s management and the Board and is considered in the processes that set the governance practices and strategic direction for the Firm. We also focus on shareholder feedback to better tailor the public information we provide to address the interests and inquiries of our shareholders and other interested parties.
The Firm interacts and communicates with shareholders in a number of forums, including quarterly earnings presentations, SEC filings, the Annual Report and proxy statement, the annual meeting, the annual Investor Day presentation, investor conferences and web communications. We also conduct a formal shareholder outreach program twice a year. This program covers a wide array of topics with a broad group of shareholders and shareholder feedback is regularly provided to the Board and the Firm’s management. Discussions during the lead up to our annual meeting in the Spring are usually focused on specific issues related to the proxy statement while discussions at other times of the year are typically focused on corporate governance and other topics of interest to our shareholders. This engagement process, including the feedback gained from it, was a significant factor in the Board’s adoption of several new compensation and governance measures since the
 
2015 annual meeting. These new measures included a clawback disclosure policy, a Performance Share Unit plan for members of the Operating Committee and a proxy access By-law, each of which is described in more detail elsewhere in this proxy statement.
In 2015, management outreach efforts included the following:
Hosted more than 90 shareholder outreach discussions, covering shareholders representing in the aggregate over 40% of our outstanding common stock - similar to our 2014 outreach program. Topics included:
company strategy and performance
management and Board compensation
Board structure and composition
Corporate Governance Principles and By-laws, including proxy access
succession planning
disclosures - proxy format and content, including clawback disclosure
Members of senior management participated in more than 50 investor meetings and presented at 13 investor conferences in 2015. Members of senior management also held 10 investor trips during 2015 throughout the U.S., as well as international trips to Asia and Europe, during which they met in person with shareholders and other interested parties.
In addition, the Board has endorsed the Shareholder-Director Exchange (SDX) Protocol as a guide for effective, mutually beneficial engagement between shareholders and directors. During 2015, members of the Board met with shareholders to discuss a variety of topics, including the Firm’s strategy, performance, governance and compensation practices.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    27


Relationship with regulators
We are committed to transparency and responsiveness in our extensive interactions with our regulators. That means providing them with complete, accurate and timely information and maintaining an open, ongoing dialogue. Our senior leaders, including our Board, continued to commit significant time to meet with our regulators in 2015. Such frequent interaction helps us hear firsthand from regulators and gives us a forum for keeping them well-informed on our businesses.
Our primary U.S. regulators meet with various Board committees and individual Board members to discuss regulators’ expectations on effective Board oversight. In 2015, certain of our independent Board members met with several of our U.S. regulators, including: the Board of Governors of the Federal Reserve System (“Federal Reserve”); the Office of the Comptroller of the Currency (“OCC”); the Federal Deposit Insurance Corporation (“FDIC”), as well as the U.S. Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”) and the Consumer Financial Protection Bureau (“CFPB”). Certain of our independent Board members also met with international regulators, including: the Prudential Regulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”) in the United Kingdom; the Hong Kong Monetary Authority (“HKMA”); the China Banking Regulatory Commission (“CBRC”); the Japan Financial Services Agency (“FSA”); and the Monetary Authority of Singapore (“MAS”); as well as with various additional regulators in these countries and others.
Communication of our corporate standards
The Board has been engaged with management on the importance of strong corporate standards and the need to reinforce the Firm’s commitment to doing business the right way and to establish a clear and common vocabulary for communicating this commitment.
Our directors frequently engage on the topic of culture and conduct in Board and Board committee meetings, including in the Specific Purpose Committees, in their oversight of progress addressing regulatory order issues. Recognizing the increasing importance of these issues, in 2015, the Compensation & Management Development Committee charter was amended to provide that the committee has primary responsibility for Board oversight of the Firm’s Culture and Conduct programs. Board level engagement on culture and conduct also includes the Audit Committee’s oversight
 
of the Code of Conduct program and the CMDC’s review and approval of the Firm’s compensation and performance management processes.
Directors also highlight the importance of our corporate standards through participation in less formal settings, such as town hall and other meetings held by our lines of business and other functions for employees and/or leadership teams, annual meetings with the Firm’s senior leaders, and regularly scheduled informal sessions with members of the Firm’s Operating Committee and other senior leaders. For more information on the Firm’s corporate standards see “Our business principles” on page 32 of this proxy statement.
Shareholders and interested parties who wish to contact our Board of Directors, any Board member, including the Lead Independent Director, any committee chair, or the independent directors as a group, may mail their correspondence to: JPMorgan Chase & Co., Attention (name of Board member(s)), Office of the Secretary, 270 Park Avenue, New York, NY 10017, or e-mail the Office of the Secretary at corporate.secretary@jpmchase.com.
DIRECTOR INDEPENDENCE
 
The Board’s commitment to independence begins with the individual directors. All of our non-management Board members are independent under the standards established by the NYSE and the Firm’s independence standards. Directors are determined to be independent if they have no disqualifying relationship, as defined by the NYSE, and if the Board has affirmatively determined they have no material relationship with JPMorgan Chase, directly or as a partner, shareholder or officer of an organization that has a relationship with JPMorgan Chase.
In determining the independence of each director, the Board uses the following criteria:
The Corporate Governance Principles adopted by the Board and published on our website at jpmorganchase.com, under the heading Governance, which is under the About Us tab
The NYSE corporate governance listing standards
The Board has reviewed the relationships between the Firm and each director and determined that in accordance with the NYSE’s and the Firm’s



28    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


independence standards, each non-management director (Linda B. Bammann, James A. Bell, Crandall C. Bowles, Stephen B. Burke, James S. Crown, Timothy P. Flynn, Laban P. Jackson, Jr., Michael A. Neal, Lee R. Raymond and William C. Weldon) has only immaterial relationships with JPMorgan Chase. Accordingly, all directors other than Mr. Dimon are independent.
Because of the nature and broad scope of the services provided by the Firm, there may be ordinary course of business transactions between the Firm and any independent director, his or her immediate family members or principal business affiliations. These may include, among other things, extensions of credit and other financial and financial advisory products and services; business transactions for property or services; and charitable contributions made by the JPMorgan Chase Foundation or the Firm to any nonprofit organization of which a director is employed as an officer.
In making its determinations regarding director independence, the Board considered:
Consumer credit: extensions of credit provided to directors Bell and Jackson; and credit cards issued to directors Bammann, Bell, Bowles, Crown, Flynn, Jackson, Neal, Raymond, and Weldon, and their immediate family members
Wholesale credit: extensions of credit and other financial and financial advisory services provided to NBCUniversal, LLC and Comcast Corporation and their subsidiaries, for which Mr. Burke is Chief Executive Officer and a senior executive, respectively; and Henry Crown and Company, for which Mr. Crown is President, and other Crown family-owned entities
Goods and services: commercial office space leased by the Firm from subsidiaries of companies in which Mr. Crown and members of his immediate family have indirect ownership interests; and national media placements with NBCUniversal and Comcast outlets
 
The Board reviewed these relationships in light of its independence standards and determined that none of them creates a material relationship between the Firm and the applicable director or would impair the independence or judgment of the applicable director.
DIRECTOR COMPENSATION
 
The Governance Committee is responsible for reviewing director compensation and making recommendations to the Board. In making its recommendation, the Governance Committee annually reviews the Board’s responsibilities and also the compensation practices of the firms in the peer groups used by the CMDC for benchmarking as part of assessing compensation practices and pay levels for Operating Committee members. For more information on these peer groups see “Evaluating market practices” on page 46 of this proxy statement. In addition, the Board believes it is desirable that a significant portion of director compensation be linked to the Firm’s common stock. In 2015, the Board determined that no changes should be made to director compensation.
Annual compensation
For 2015, 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 $225,000, on the date of grant. Additional cash compensation was paid for certain committees and other services as described on page 30 of this proxy statement.
Each deferred stock unit included in the annual grant to directors 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.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    29


The following table summarizes the current annual compensation for non-management directors.
Compensation
Amount ($)

Board retainer
$
75,000

Lead Independent Director retainer
30,000

Audit and Risk Committee chair retainer
25,000

All other committees chair retainer
15,000

Audit and Risk Committee member retainer
15,000

Deferred stock unit grant
225,000

 
The Board may periodically ask directors to serve on one or more Specific Purpose Committees or other committees that are not one of the Board’s principal standing committees or to serve on the board of directors of a subsidiary of the Firm. Any compensation for such service is included in the “2015 Director compensation table” below.


2015 Director compensation table
The following table shows the compensation for each non-management director in 2015.
Director
Fees earned or 
paid in cash ($)1
 
 
2015 Stock 
award ($)2
 
Other fees earned or 
paid in cash ($)3
 
Total ($)
 
Linda B. Bammann
 
$
90,000

 
 
$
225,000

 
$
30,000

 
$
345,000

James A. Bell
 
90,000

 
 
225,000

 
25,000

 
340,000

Crandall C. Bowles
 
105,000

 
 
225,000

 
30,000

 
360,000

Stephen B. Burke
 
75,000

 
 
225,000

 

 
300,000

James S. Crown
 
115,000

 
 
225,000

 
42,500

 
382,500

Timothy P. Flynn
 
90,000

 
 
225,000

 
30,000

 
345,000

Laban P. Jackson, Jr.
 
115,000

 
 
225,000

 
222,500

 
562,500

Michael A. Neal
 
90,000

 
 
225,000

 

 
315,000

Lee R. Raymond
 
120,000

 
 
225,000

 
37,500

 
382,500

William C. Weldon
 
90,000

 
 
225,000

 
105,000

 
420,000

1 
Includes fees earned, whether paid in cash or deferred, for service on the Board of JPMorgan Chase. For additional information on each Director’s service on the Board and committees of JPMorgan Chase, see “Committees of the board” at page 23 of this proxy statement.
2 
On January 20, 2015, each director received an annual stock award in an amount of deferred stock units equal to $225,000, based on a grant date fair market value of $55.9066. The aggregate number of option awards and stock awards outstanding at December 31, 2015, for each current director is included in the “Security ownership of directors and executive officers” table on page 75 of this proxy statement under the columns “Options/SARs exercisable within 60 days” and “Additional underlying stock units,” respectively. All such awards are vested.
3 
Includes fees paid to non-management directors who serve on the Board of Directors of JPMorgan Chase Bank, N.A., (“Bank”) a wholly-owned subsidiary of JPMorgan Chase, or are members of one or more Specific Purpose Committees. Messrs. Crown, Jackson and Weldon, as directors of the Bank, received fees of $15,000, and as Chairman of the Board of the Bank, Mr. Weldon received an additional fee of $25,000. A fee of $2,500 is paid for each Specific Purpose Committee meeting attended (with the exception of the Omnibus Demand Committee). Also includes for Mr. Jackson $110,000 in compensation during 2015 in consideration of his service as a director of J.P. Morgan Securities plc, one of the Firm’s principal operating subsidiaries in the United Kingdom and a subsidiary of the Bank.


30    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


Stock ownership: no hedging, no pledging
As stated in the Corporate Governance Principles and further described in “No Hedging/Pledging” on page 64 of this proxy statement, each director agrees to retain all shares of the Firm’s common stock he or she purchased on the open market or received pursuant to their service as a Board member for as long as they serve on our Board.
Shares held personally by a director may not be held in margin accounts or otherwise pledged as collateral, nor may the economic risk of such shares be hedged.
As detailed at page 75 of this proxy statement under “Security ownership of directors and executive officers,” Mr. Crown has the ownership of certain shares attributed to him that arise from the business of Henry Crown and Company, an investment company where Mr. Crown serves as President, and trusts of which Mr. Crown serves as trustee (the “Attributed Shares”). Mr. Crown disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest. The Attributed Shares are distinct from shares Mr. Crown or his spouse own individually, or shares held in trusts for the benefit of his children (the “Crown Personally Held Shares”). The Firm has reviewed the potential pledging of the Attributed Shares with Mr. Crown, recognizes Mr. Crown’s distinct obligations with respect to Henry Crown and Company and the trusts, and believes such shares may be prudently pledged or held in margin loan accounts. Crown Personally Held Shares are not and may not be held in margin accounts or otherwise pledged as collateral, nor may the economic risk of such shares be pledged.
 
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 or pays such expenses directly. The Firm also pays the premiums on directors’ and officers’ liability insurance policies and on travel accident insurance policies covering directors as well as employees of the Firm.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    31


Our business principles
As a Firm we have worked to strengthen our corporate culture, including by rededicating ourselves to the Firm’s mission and business principles. We aligned our efforts under the “How We Do Business” framework and launched a global Culture and Conduct program focused on maintaining a strong corporate culture that instills and enhances a sense of personal accountability. As part of our efforts to continue to embed culture into our business-as-usual operating environment, the Firm has named senior executives to serve as the Executive Sponsors of the Culture and Conduct program on behalf of the Operating Committee. This executive sponsorship will help the program remain a business-driven key priority for every line of business and function. The Culture and Conduct program is further enhanced by operational oversight from our Human Resources department.
It is important that corporate standards be clearly articulated so that they may be fully understood by every person at the Firm. To that end, in addition to the Culture and Conduct program work, our Firm’s standards are documented in our Business Principles, Code of Conduct (“Code”) and Code of Ethics for Finance Professionals, each of which is described in detail below.
Business Principles
We have a clearly articulated set of 20 core business principles, representing four central corporate tenets: exceptional client service; operational excellence; a commitment to integrity, fairness and responsibility; and a great team and winning culture. The full set of Business Principles is included in our report “How We Do Business — The Report,” which is posted on our website at jpmorganchase.com under the Investor Relations tab. These principles provide the road map for how all employees at JPMorgan Chase are expected to behave in their work and will continue to guide the Firm as we move forward.
Code of Conduct
The Code is our core conduct policy document and is designed to provide the direction for essential elements of the Business Principles road map. All new hires must complete Code training shortly after their start date with the Firm. All employees are required to complete additional Code training and provide a new affirmation of their compliance with the Code annually.
 
Employees can report any known or suspected violations of the Code via the Code Reporting Hotline by phone, web, e-mail, mail or fax. The Hotline is anonymous, except in certain non-US jurisdictions where laws prohibit anonymous reporting, and is available 24/7 globally, with translation services. It is maintained by an outside service provider to enhance employee confidentiality.
We maintain country-specific whistleblower policies as appropriate, as well as firmwide human resources policies affording protection for the good faith reporting of concerns raised by employees. We also provide guidelines to employees in our Human Resources, Global Investigations and Legal departments regarding the review and treatment of employee-initiated complaints, including the proper escalation of suspected or known violations of the Code, other Firm policy or the law.
Suspected violations of the Code, Firm policy or the law are investigated by the Firm and may result in an employee being cleared of the suspected violation or an escalating range of actions depending upon the facts and circumstances. A Chief Compliance Officer and a Human Resources executive annually report to the Audit Committee on the Code of Conduct program and review the record of compliance.
Code of Ethics for Finance Professionals
The Code of Ethics for Finance Professionals applies to the CEO, CFO, Controller and all other professionals of the Firm worldwide serving in a finance, accounting, line of business treasury, tax or investor relations role. The purpose of our Code of Ethics is to promote honest and ethical conduct and compliance with the law in connection with the maintenance of the Firm’s financial books and records and the preparation of our financial statements.



32    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


Certain key governance policies
SPECIAL SHAREHOLDER MEETINGS AND ACTION BY WRITTEN CONSENT
 
The Firm’s By-laws permit shareholders holding at least 20% of the outstanding shares (net of hedges) of our common stock to call special meetings. In addition, the Firm’s Certificate of Incorporation permits shareholders holding at least 20% of the outstanding shares of our common stock to act by written consent on terms substantially similar to the terms applicable to call special meetings.
PROXY ACCESS
 
New in 2016 - In January 2016, the Board amended the Firm’s By-laws by adding Section 1.10 to provide for a right of proxy access. This right enables eligible shareholders to include their nominees for election as directors in the Firm’s own proxy statement. The By-law amendment was adopted following extensive discussions with our shareholders and reflects their expressed desire to have additional access to the director nomination process. The terms of the proxy access By-law permit a shareholder to nominate up to 20% of the Board (but in any event at least two directors) and include a shareholder ownership threshold requirement of 3% for at least 3 consecutive years. In addition, the By-law allows up to 20 shareholders to form a group to reach the required threshold. The complete text of new By-law Section 1.10 is available on our website at jpmorganchase.com, under the heading Governance, which is under the About Us tab.
PUBLIC POLICY ENGAGEMENT
 
Our business is subject to extensive laws and regulations at the international, federal, state and local levels. Changes in such laws can significantly affect how we operate, our revenues and the costs we incur. Because of the potential impact public policy can have on our businesses, employees, communities and customers, we engage in the political process regularly to advance and protect the long-term interests of the Firm. Information about our approach, policies and procedures regarding political and legislative activities is posted on our website at jpmorganchase.com/policyengagement.
Our political activities are subject to oversight by the Board’s Public Responsibility Committee, which provides guidance to the Board and management on
 
significant policies and practices regarding political activities, including major lobbying priorities, and principal trade association memberships that relate to the Firm’s public policy objectives. The Global Government Relations department implements these policies and manages all political activities conducted by the Firm. The department reports to the Head of Corporate Responsibility and prepares an annual review for the Board’s Public Responsibility Committee. This leadership provides a continued focus on the public policy issues that are most relevant to the long-term interests of our business, clients and shareholders.
Our policies prohibit contributions of corporate funds to candidates, political party committees or political action committees (“PACs”). Contributions by the Firm’s PACs are supported entirely by voluntary contributions made by employees and are used to support candidates, parties or committees whose views on specific issues are consistent with the Firm’s priorities. The Firm’s PACs contribute to candidates and political committees on a bi-partisan basis and do not make contributions in connection with U.S. presidential elections. Contributions made by the PACs are subject to legal disclosure requirements and are reported in filings with the Federal Election Commission and the relevant state or local election commissions, and are publicly available on our website.
We may, from time to time, use corporate funds to support or oppose state or local ballot initiatives that affect our business. No corporate funds are used to make contributions to broad-based groups organized under Section 527 of the Internal Revenue Code. The Firm’s PACs may make contributions to ballot committees and 527 groups; however, contributions to 527s are primarily membership dues and are not used to support the election of any specific candidate or for the purpose of funding specific expenditures or communications. We voluntarily provide information about these contributions on our website at jpmorganchase.com/policyengagement.
We may occasionally support groups organized under Section 501(c)(4) of the Internal Revenue Code on public policy matters, but not for electoral purposes. When we do support such groups on public policy matters, we will seek to disclose that information.
We do not use corporate funds to make independent political expenditures, including electioneering communications. In addition, we restrict the trade associations to which we belong from using our funds for any election-related activity.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    33






34    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT













Proposal 2:
Advisory resolution to approve
executive compensation




 

Approve the Firm’s compensation practices and principles and their implementation for 2015 for the compensation of the Firm’s Named Executive Officers as discussed and disclosed in the Compensation Discussion and Analysis, the compensation tables, and any related material contained in this proxy statement.
 
RECOMMENDATION:
Vote FOR approval
 



JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    35


Proposal 2 — Advisory resolution to approve executive compensation
EXECUTIVE SUMMARY
 
As discussed in the Compensation Discussion and Analysis section of the proxy statement on pages 37-64, the Board of Directors believes that JPMorgan Chase’s long-term success as a premier financial services firm depends in large measure on the talents of our employees, and a proper alignment of their compensation with performance and sustained shareholder value. The Firm’s compensation system plays a significant role in our ability to attract, retain and properly motivate the highest quality workforce. The principal underpinnings of our compensation system are an acute focus on performance within a well controlled environment, shareholder alignment, sensitivity to the relevant marketplace, and a long-term orientation.

 
ADVISORY RESOLUTION
 
As required by Section 14A of the Securities Exchange Act of 1934, as amended, this proposal seeks a shareholder advisory vote to approve the compensation of our Named Executive Officers as disclosed pursuant to Item 402 of Regulation S-K through the following resolution:
“Resolved, that shareholders approve the Firm’s compensation practices and principles and their implementation for 2015 for the compensation of the Firm’s Named Executive Officers as discussed and disclosed in the Compensation Discussion and Analysis, the compensation tables, and any related material contained in this proxy statement.”
Because this is an advisory vote, it will not be binding upon the Board of Directors. However, the Compensation & Management Development Committee (“CMDC”) will take into account the outcome of the vote when considering future executive compensation arrangements. We will include an advisory vote on executive compensation on an annual basis at least until the next shareholder advisory vote on the frequency of such votes, to be held not later than 2017.
 
The Board of Directors recommends a vote 
FOR this advisory resolution to approve executive compensation.
 





36    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


Compensation discussion and analysis
SUMMARY: OUR EXECUTIVE COMPENSATION PROCESS
 
We design our executive compensation program to attract, retain, and properly motivate the talent necessary to support our businesses in achieving their key goals and drive sustained shareholder value. The following Compensation Discussion and Analysis ("CD&A") is organized around five key considerations that we believe shareholders should focus on in their evaluation of our “Say on Pay” proposal.
CD&A Roadmap

JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    37


SUMMARY: SHAREHOLDER ENGAGEMENT AND CHANGES TO OUR COMPENSATION PROGRAM
 


38    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


STRONG RESULTS AGAINST BROAD PERFORMANCE CATEGORIES
1.   Business Results: Delivered strong financial results reflecting solid performance across our four major businesses, while maintaining our fortress balance sheet and meeting or exceeding our capital and expense targets for 2015
2.  Risk & Control: Further strengthened our control environment, including enhancing our technology infrastructure, addressing issues that resulted in supervisory and enforcement actions, investing in training, and rededicating ourselves to the Firm’s Business Principles to further strengthen our culture
3.   Customer & Clients: Enhanced our clients’ experiences by investing in our businesses and leveraging innovative technologies, which further strengthened the market leadership of our franchises
4.   People Management & Leadership: Created a new leadership development program designed to develop outstanding leaders at all levels of management across each line of business (“LOB”) and function
1. HIGHLIGHTS OF 2015 BUSINESS RESULTS1,2
 
We delivered return on tangible common equity (“ROTCE”) of 13%, achieved record net income and record earnings per share (“EPS”), and improved or maintained our leading market share positions in each of our core businesses notwithstanding continued revenue headwinds from the low interest rate environment and increased capital requirements.

JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    39


LONG-TERM FINANCIAL PERFORMANCE
 
The Firm has generated strong ROTCE while growing its capital base over a long-term horizon. Since 2008, the Firm has more than doubled its average tangible common equity (“TCE”) from $80 billion to $170 billion — a compound annual growth rate of 11% and an increase of $90 billion. Over the same period, the Firm has generated nearly $140 billion of cumulative net income and an average ROTCE of 12%. In 2015, the Firm generated ROTCE of 13%, flat to 2014, but on $9 billion higher average TCE, which reflects higher net income, higher common dividends and higher share repurchases. The exhibit below sets forth our ROTCE and average TCE over the 2008–2015 period.
STRONG ROTCE ON INCREASING CAPITAL
The Firm has also delivered consistently strong growth in both Tangible Book Value Per Share (“TBVPS”) and EPS over a sustained period of time. We increased our TBVPS from $22.52 to $48.13 — an 11% compound annual growth rate from December 31, 2008, through December 31, 2015. Over the same period, we also substantially increased diluted EPS each year, achieving a compound annual growth rate of 24%. The exhibit below sets forth our TBVPS and EPS over the 2008–2015 period.
SUSTAINED GROWTH IN BOTH TBVPS AND EPS


40    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


TOTAL SHAREHOLDER RETURN
 
We delivered 8% TSR1 in 2015, following a TSR of 10% in 2014 and 37% in 2013, for a combined three year TSR of 63%. The exhibit below shows our TSR expressed as cumulative return to shareholders since December 31, 2007. As illustrated in the exhibit, every $100 invested in JPMorgan Chase as of December 31, 2007 would be valued at $183 as of December 31, 2015, significantly outperforming the financial services industry over the period, as measured by the S&P Financial Index and the KBW Bank Index. The exhibit below also shows our strong relative TSR performance over a one-year, three-year, and five-year period, relative to the S&P Financial Index and the KBW Bank Index.
SUSTAINED SHAREHOLDER VALUE (“TSR”)
1 Total shareholder return (“TSR”) assumes reinvestment of dividends
2. SUSTAINED PROGRESS IN REINFORCING OUR CONTROL ENVIRONMENT AND OUR CULTURE
 
Because we believe that a strong and sustainable control environment is vital to minimizing legal, regulatory and control issues, it continues to be a priority for the Firm. We have continued to focus on addressing outstanding regulatory and litigation matters including, among others, those pertaining to the December 2015 resolution concerning written client disclosures, as well as other resolutions of investigations and/or litigation involving foreign exchange trading and losses suffered in 2012 by the Chief Investment Office.
Since 2011, our total headcount associated with controls has gone from 24,000 people to 43,000 people, and our total annual control spend has gone from $6 billion to approximately $9 billion over that same time period. We have more work to do, but a strong and permanent foundation is in place.
We have also implemented training and education programs that have touched all of our approximately
 
235,000 employees throughout the Firm, working in more than 60 countries and nearly 2,100 U.S. cities.
To enhance the Firm’s defense capabilities, we have increased cybersecurity spending from approximately $250 million in 2014 to approximately $500 million in 2015, as there is no investment more important than protecting the data and assets of the Firm, and our customers and clients. Worldwide, thousands of employees are focused on cybersecurity working across the Firm and with many partners to maintain our defenses to enhance our resilience against cyber threats.
Further Strengthening Our Culture
Over the past few years, we have undertaken a significant effort to examine how we can more rigorously and consistently adhere to the high ethical standards that our shareholders, regulators and others expect of us and that we expect for ourselves. This includes clearly articulating business principles, promoting sound governance and the right tone from the top, having in place strong leadership and management processes, and providing a management development and compensation framework that properly incents appropriate behaviors. We have


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    41


continued to reinforce our Business Principles in order to support a culture that instills a sense of personal accountability through broad, deep integration of common standards across businesses and geographies. Taken together, these efforts represent our commitment to the Firm’s culture and reflect the long-term approach we are taking to enhance it. 
Actions taken in 2015 included rolling out a global, firmwide Culture and Conduct Program, which leverages what we learned from a pilot program undertaken in the EMEA region and the Corporate & Investment Bank. We obtained feedback from thousands of employees via focus groups, surveys and polls, identified key themes and established actions, where appropriate. In addition, Conduct Risk Assessments were performed by each line of business and function, also with appropriate action items identified.
We established explicit Board oversight of the Culture and Conduct program through the Compensation & Management Development Committee and rolled out a comprehensive suite of management training programs that embed culture and conduct throughout the Firm. So that the Culture and Conduct program remains a key business-driven priority for every line of business and function, the Firm has named senior executives to serve as the Executive Sponsors of the Culture and Conduct program on behalf of the Operating Committee. The program will be further enhanced by operational oversight from our Human Resources department.
In addition, we have focused our attention on embedding our standards throughout the employee life cycle, starting with the recruiting and onboarding process and extending to training, compensation, promoting and disciplining employees.
3. ENHANCING THE CUSTOMER EXPERIENCE TO DELIVER SUSTAINED PERFORMANCE
 
Our performance reflects our commitment to invest in our businesses and further strengthen the market leadership of our franchises. We believe that our future success rests on our ability to continually improve upon our clients’ and customers’ experience. The following are examples of actions taken by our LOBs during 2015 to enhance our clients’ and customers’ experience:

 
Consumer & Community Banking (“CCB”) — We enhanced our customers’ digital experience by redesigning the Chase online home page to deliver a more personalized and user-friendly experience. We also added new functionality to our award-winning mobile app with Touch ID for the iPhone. We’ve invested to provide simple, secure and personalized experiences for our customers through our Chase mobile app, Chase Quick PaySM and our announcement of Chase Pay.
Corporate & Investment Bank (“CIB”) — We made major investments in electronic trading technology, particularly within the fixed income business; a good example is our enhancements to our FX trading capabilities on J.P. Morgan Markets, including mobile execution launched for FX spot and algorithmic execution tools. We also engaged with emerging financial technology companies to design and test next-generation products. In addition, we are building out our Treasury Services and Paymentech products to offer our clients the ability to engage in foreign exchange transactions from any branch, through any channel, at any time through our ACCESS platform.
Commercial Banking (“CB”) We developed specialized industry group teams in our Commercial and Industrial client segment that have deep expertise in particular industries, including healthcare, life sciences, media and entertainment, energy, agribusiness and food, apparel and footwear, and technology. We are seeing early success with this segmented approach – in 2015, approximately 50% of our new Middle Market clients were in one of our specialized industry groups.
Asset Management (“AM”) — We improved our client experience across several dimensions. In Global Wealth Management we developed a proprietary, goals-based investing tool and implemented more efficient client onboarding processes to reduce account opening time. In Global Investment Management we continued to deliver innovative products with 40 fund launches, and we published our “Guide to the Markets” in 12 languages and 25 countries to share our thought leadership globally. Digital wealth management, process reengineering, product innovation and intellectual capital helped us to continue to improve our service to institutional and individual clients in over 130 countries around the world.



42    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


4. INVESTMENT IN OUR PEOPLE
 
Our employees’ effectiveness, career development, and ability to adapt to a changing landscape are critical for us to continue to deliver sustained shareholder value. In addition, maintaining our corporate standards and strong financial performance for the long term requires a pipeline of high-caliber talent. We believe the most effective workforce is a diverse workforce, and as such, we maintain firmwide inclusion and diversity initiatives to attract and retain the highest quality talent.
Employee development
From the moment employees join the Firm and throughout their careers, it is our responsibility to provide opportunities to help them build their knowledge, skills and experience. We spend approximately $300 million per year on learning programs. Programs range from entry-level to experienced skills to management, with courses tailored to individual functions, lines of business or geographic regions.
Leadership development
Throughout the organization, we work to develop a steady pipeline of strong leaders through on the job experiences, learning and development programs and mobility opportunities.
In 2015, we enhanced the Firm’s learning and development initiatives by launching JPMorgan Chase’s Leadership Edge — a firmwide suite of leadership and management learning programs rooted in the Firm’s Business Principles (see page 32 of this proxy statement). Leadership Edge is designed to help develop outstanding leaders at all levels of management across each line of business, function and region and strengthen our leadership culture.
Leadership Edge delivers training to managers and leaders at key transition points – from joining the Firm as a new-hire manager or becoming a first-time manager of others to managing large global teams. Internal certified faculty and senior line leaders deliver the programs to managers from across businesses, functions and regions.
This year, we opened our flagship facility dedicated to management and leadership learning – the Pierpont Leadership Center, in New York City. This dedicated facility provides an opportunity for our faculty and senior leaders to engage with managers at all levels
 
and reinforce the importance of our leadership attributes.
JPMorgan Chase’s Leadership Edge is comprised of 9 core programs:
Succession planning
Succession planning is a top priority for the Board and the Firm’s senior leadership, with the objective of having a pipeline of leaders for the immediate and long term future. To achieve this objective, the Board and management take a proactive approach.
The CMDC reviews the succession plan for the CEO followed by Board discussion led by the Lead Independent Director. The CMDC also reviews the succession plan for members of the Operating Committee other than the CEO, which is then discussed by the Board of Directors. These processes enable the Board to address both short-term unexpected events, as well as long-term, planned occurrences, such as retirement or change in roles.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    43


Similar processes, led by the relevant management team, occur within each of the Firm’s lines of business and functions.
Diversity
Diversity and inclusion are important to the Firm. We are committed to a culture of openness and meritocracy, and believe in giving all individuals an opportunity to succeed while bringing their whole selves to work. Our diverse employee base and inclusive environment are strengths that lead to the best solutions for our customers and for every community that we serve. Our diversity and inclusion strategy has three pillars – Workforce, Workplace and Marketplace – with management accountability being critical to our ability to hire, train and retain great and diverse employees whose unique perspectives help us realize our business objectives.
We continue to invest significant time and effort toward our diversity and inclusion strategy, including expanding our diversity scholarship program, increasing marketing and events on college and university campuses, and leveraging and executing best practices more consistently firmwide. Our Business Resource Groups (“BRGs”) also encourage employees to use their unique perspectives to advance the Firm’s priorities in the global marketplace. One in every four employees is a BRG member.
We also maintain diversity advisory councils that meet monthly to review the Firm’s progress toward our diversity objectives globally.
As part of our mission to hire top talent, we enhanced our firmwide campus recruiting process and improved the candidate experience by simplifying our offerings, providing efficient and cost effective online interview opportunities, and by arranging virtual events to reach broader users. We also refreshed our campus recruiting website to better communicate about opportunities offered by the Firm.
The Firm is committed to providing benefits programs and policies that support the needs of our employees and their families. Our incentives for wellness and healthy behaviors include free preventive screenings and 29 free onsite clinics. In 2015, we increased parental leave time in the U.S. from 12 weeks to 16 weeks for the primary caregiver, and from one week to two weeks for the non-primary caregiver (effective January 1, 2016). Our benefits spending, directed
 
more than proportionately to lower wage earners, includes higher insurance subsidies and greater retirement benefits, such as a competitive 401(k) dollar for dollar match on 5% of pay, as well as a special award to lower paid employees which we increased in 2015. We are also one of less than 20% of Fortune 500 companies that continue to offer a well-funded defined benefit pension plan to employees.
As a founding member of the Veteran Jobs Mission, a coalition of approximately 220 employers that have collectively hired over 314,000 veterans and whose ultimate goal is to hire 1 million veterans, the Firm has hired more than 10,000 veterans since 2011, with 48% of our 2015 veteran hires coming from diverse backgrounds. Additionally, we committed $14 million through 2020 to the Institute for Veterans and Military Families at Syracuse University; donated 113 mortgage free homes, valued at more than $20 million, to veterans and their families; and laid plans to support veteran-owned small businesses in 2016. We take pride in the recognition we are receiving in the marketplace – World’s Most Admired Companies by Fortune magazine, America’s Ideal Employers by Universum, Best for Vets by Military Times, Best Employer for Healthy Lifestyles by the National Business Group on Health, Best Companies for Multicultural Women by Working Mother Magazine, and we are proud to have received a 100% rating on the Corporate Equality Index (14 consecutive years) and a 100% rating on the Disability Equality Index.
Accessibility
As part of our ongoing commitment to be an employer of choice, in 2015, we laid the foundation for the Office of Accessibility Affairs to increase the Firm’s focus on matters related to accessibility, including the Americans with Disability Act (“ADA”). The Office of Accessibility Affairs will be responsible for partnering with senior management to identify opportunities to develop and drive engagement, policy and strategy for accessibility matters across the Firm, including collaboration with various departments such as Regulatory Capital Management, Risk Management, Technology, Real Estate and Human Resources.



44    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


PAY-FOR-PERFORMANCE PRACTICES
   Proactive and balanced approach to assessing performance against priorities enables the CMDC and Board to make informed decisions
   Assessments of performance, over a multi-year period, against four broad performance categories that drive sustained shareholder value
   Adoption of PSU Program introduces a formulaic component in Operating Committee members’ compensation (i.e., number of PSUs earned at vest is based on formula), while maintaining risk and control features
PAY-FOR-PERFORMANCE FRAMEWORK
 
The CMDC reviews and approves the Firm’s compensation philosophy, which guides how the Firm’s compensation plans and programs are designed for the Operating Committee, as well as all other employees at the Firm.
The CMDC uses a disciplined pay-for-performance framework to make executive compensation decisions commensurate with the Firm, line of business (“LOB”), function, and individual performance, while considering other relevant factors, including market practices.
PERFORMANCE ASSESSMENT FACTORS
 
In determining Operating Committee members’ compensation, the CMDC uses a balanced approach to assess performance against four broad categories:
1.
Business and financial results
2.
Risk and control objectives
3.
Customer and client goals
4.
People management and leadership objectives
These performance categories appropriately consider short-, medium- and long-term goals that drive sustained shareholder value, while accounting for risk and control objectives.
To promote a proper pay-for-performance alignment, the CMDC relies on its business judgment to determine appropriate compensation and does not assign relative weightings to these categories. In addition, feedback from the Firm’s risk and control professionals is considered in assessing Operating Committee members’ performance. The performance of Operating Committee members against these categories is discussed in detail on pages 52-56 of this proxy statement.
 
PERFORMANCE ASSESSMENT PROCESS
 
We believe our balanced approach in assessing Firm, LOB, function, and individual performance enables the CMDC and the Board to make informed compensation decisions regarding our Operating Committee members.
Our comprehensive performance review process includes the following key features:
The Board regularly reviews Firm and LOB budgets and business plans
The CEO and other Operating Committee members establish individual performance priorities, which are reviewed with the CMDC
Throughout the year, the Board and CMDC review Firm, LOB, function, and individual performance
All LOBs and regions conduct quarterly control forums to discuss any identified risks that may materially impact the Operating Committee members’ performance reviews and related compensation
Feedback from the Firm’s risk and control professionals
In parallel with the performance review process, the CMDC engages in regular discussions with the CEO and the Director of Human Resources on Operating Committee members’ performance throughout the year. The CMDC believes that this proactive process (vs. determining pay levels during a single year-end process) results in pay decisions that are more commensurate with performance.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    45


EVALUATING MARKET PRACTICES
 

In order to effectively attract, properly motivate and retain our senior executives, the CMDC regularly reviews market data relating to both pay levels and pay practices.
Given the diversity of the Firm’s businesses, the CMDC developed a set of peers that includes both Financial Services companies and General Industry companies. The Financial Services peers are comprised of large financial services companies with which the Firm directly competes, for both talent and business. The General Industry peers are comprised of large, global leaders across multiple industries. In evaluating market practices and pay levels for Operating Committee members, the CMDC uses market data from both peer groups, and considers the size of the firms and the nature of their businesses in using this data.
Specific factors considered in determining companies for inclusion in the Firm’s peer groups include:
Financial services industry
Significant global presence
Global iconic brand
Industry leader
Comparable size
Recruits top talent
The table below sets forth the composition of our peer groups.
The CMDC also references other financial firms for comparison, including Barclays, BNY Mellon, BlackRock, Capital One Financial, Credit Suisse, Deutsche Bank, HSBC and UBS.
To illustrate the reasonableness of the CMDC’s peer selection, the following table provides a summary of the financial attributes of our Financial Services and General Industry peers, and our relative positioning based on these attributes.
1 
Source: Annual reports; revenue reflects reported basis
2 
Market capitalization is based on stock price and shares outstanding as of fiscal year-end 2015




46    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


DETERMINING PAY LEVELS
 
In determining total compensation levels for Operating Committee members, the CMDC considers the following factors in an effort to make pay commensurate with sustained performance, and to attract and retain top talent:
Performance, including risk and control objectives, as detailed above
Value of the position to the organization and shareholders over time (i.e., “value of seat”)
Leadership, including setting an example for others by acting with integrity and strengthening our culture
External talent market (i.e., market data)
Internal equity among Operating Committee members, as appropriate
While market data provides the CMDC with useful information regarding our competitors, the CMDC
does not target specific positioning (e.g., 50th percentile), nor does it use a formulaic approach in determining competitive pay levels. Instead, the CMDC uses a range of data as a reference, which is considered in the context of each executive’s performance over a multi-year period, as well as the value the individual delivers to the Firm. In addition, since the Firm rotates some of its executive officers among the leadership positions of its businesses and key functions as part of development and succession planning, and considers each Operating Committee member to be a part of the Firm's leadership beyond his or her discreet line of business or function responsibilities, the CMDC also places importance on the internal pay relationships among members of the Operating Committee.

 
DETERMINING PAY MIX
 
Once the CMDC determines Operating Committee members' total incentive compensation, the CMDC then establishes the appropriate mix between annual cash incentives and long-term equity (including PSUs and RSUs). For Mr. Dimon, the CMDC deferred 80% of his incentive compensation in PSUs (with the remaining 20% in cash incentives) in order to more closely align his interest with those of shareholders. PSUs are 100% at risk, and will result in no payout unless a threshold performance level is achieved. For the remaining Operating Committee members, the CMDC deferred 60% of Operating Committee members' incentive compensation into long-term equity (30% in PSUs and 30% in RSUs), with the remaining 40% paid in cash incentives. The CMDC believes that this 60% equity/ 40% cash mix encourages Operating Committee members to focus on the long-term success of the Firm while avoiding excessive risk-taking, and provides a competitive annual cash incentive opportunity.
FORMULA USED IN DETERMINING ULTIMATE NUMBER OF PERFORMANCE SHARE UNITS EARNED AT VESTING
 
In January 2016, the CMDC approved a new long-term incentive compensation program – Performance Share Units (“PSUs”), which introduces a formula-based component into the determination of the level of compensation ultimately received by Operating Committee members. Specifically, while the grant value of PSUs is based on our discretionary approach in assessing performance, the ultimate number of PSUs earned at vesting is based on a formula using absolute and relative ROTCE performance, with the value of the payout ranging from 0% to 150%. Awards are made only if the Board concludes they are appropriate based on all performance considerations, including risk and control. PSUs are also subject to risk and control features, including cancellation based on protection based vesting, as well as recovery pursuant to our clawback provision. Additional details on the PSUs are provided on page 49 of this proxy statement.



JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    47


EXECUTIVE COMPENSATION DRIVES LONG-TERM SHAREHOLDER VALUE
New for 2015: Introduced a PSU Program that provides incentive compensation for Operating Committee members to execute business strategies that drive shareholder value; no payout unless a threshold performance level is achieved
• Mr. Dimon’s 2015 compensation is aligned with his outstanding performance over a multi-year period
• In 2015, NEOs continued to significantly enhance the value of our franchises, and the Firm as a whole
PAY ELEMENTS
 
The table below provides a summary for each element of compensation for the 2015 performance year.1 
1  
The CMDC views compensation awarded for 2015 differently from how compensation is reported in the Summary Compensation Table on page 66, which is required by the Securities and Exchange Commission (“SEC”). For more information on compensation awarded to our NEOs in connection with 2015 see page 57.
2  
Due to local U.K. regulations, Mr. Pinto received a fixed allowance payable in semi-annual installments, did not receive a cash bonus, and his RSUs are subject to an additional 6 month hold after vesting. U.K. regulators review compensation structure for Identified Staff annually and may impose or request future adjustments.
3  
Additional information on recovery and clawback provisions is provided in the “How do we address risk & control” section, on page 61 of this proxy statement.


48    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


NEW FOR 2015: PERFORMANCE SHARE UNIT PROGRAM
 
Taking into account shareholder feedback, the CMDC introduced PSUs as part of Operating Committee members’ annual compensation. The program provides additional motivation for OC members to execute business strategies that drive sustained shareholder value without encouraging excessive risk taking. It reinforces accountability by linking ultimate payout to pre-established absolute and relative goals. PSU awards are 100% at risk; will result in no payout unless the Firm achieves a threshold performance level. Maximum payout is capped at 150%.
Plan Feature
Description
Vehicle
 • Value of units moves with stock price during performance period; units are settled in shares at vesting
Time Horizon
 • 3-year cliff vesting, plus an additional 2-year holding period (for a combined 5-year holding period)
Performance Measures
 • After evaluation, the CMDC selected ROTCE1, as it is a fundamental measure of financial performance that reflects the Firm’s profitability as well as its capital base, thereby incorporating both the income statement and the balance sheet. It measures how well management is using common shareholders’ equity to generate profit. It is a primary measure by which we manage our business and investors and analysts use it to assess our performance relative to competitors.
 • Payout under this 3-year plan will be calculated annually based on achievement against both absolute ROTCE and relative ROTCE, per the formulaic payout grid below. The CMDC believes having absolute and relative ROTCE helps ensure a fair and balanced outcome for both shareholders and participants.
Payout Grid
 • In January 2016, the CMDC set maximum payout at an ROTCE level of 14% (or greater). The CMDC believes that achieving a 14% ROTCE in each year during the 3-year performance period has the potential to create significant shareholder value and should yield a payout at the top of the grid.
 • In making this determination, the CMDC thoroughly reviewed the Firm's expected range of net income and capital outcomes over the next 3 years, as well as the Firm’s historical performance.
PSU Performance Companies
 • Bank of America, Barclays, Capital One Financial, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Morgan Stanley, UBS, and Wells Fargo
 • Criteria: close competitors with business activities that overlap with at least 30% of our revenue mix2
Narrow Adjustment Provision
 • The CMDC may only make adjustments (up or down) for the specific purpose of maintaining the intended economics of the award in light of changed circumstances (e.g., change in accounting rules/policies or changes in capital structure). The award is also subject to risk and control features.
1  
ROTCE is calculated for each year in the Performance Period using unadjusted publicly reported data as set forth in published financial disclosures. For additional details, please refer to the Terms and Conditions in Exhibit 10.22, filed with the SEC on February 23, 2016.
2  
Based on companies referenced on page 46 of this proxy statement.

JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    49


MR. DIMON’S 2015 COMPENSATION REFLECTS EXCEPTIONAL MULTI-YEAR PERFORMANCE
 
The Board’s decision to award Mr. Dimon annual compensation of $27.0 million (vs. $20.0 million in 2014) reflects his exceptional performance over a sustained period of time, including outstanding performance in 2015. The Firm delivered record net income and record EPS, and generated ROTCE of 13% in 2015, all while exceeding capital and expense targets, adapting and streamlining the business, and further strengthening and optimizing our fortress balance sheet.
The Board recognized the Firm’s exceptional financial performance in the most recent 6 years since the financial crisis:
Strong annual ROTCE on increasing levels of capital (13% ROTCE or higher in 5 of the last 6 years);
Record Net Income (5 of the last 6 years);
Record EPS (4 of the last 6 years); and
Strong TBVPS growth rate of 10% (compounded annually over the last 6 years)
Concurrent with delivering outstanding financial results, Mr. Dimon has led a multi-year effort to fortify our controls, which includes addressing issues that resulted in supervisory and enforcement actions, as well as reinforcing our Firm’s culture by embedding our corporate standards throughout the employee life cycle. These enhancements have culminated in a more effective and efficient control environment.
Mr. Dimon has also facilitated the market leadership of our four franchises, through significant investments in product innovation and leading edge technologies, which has continuously enhanced our customers’ experiences. Furthermore, Mr. Dimon led a significant effort towards investing in our people, enhancing diversity programs, building a pipeline of leaders, and developing outstanding talent across the organization.
Finally, in assessing Mr. Dimon’s performance and determining his pay, the CMDC and independent members of our Board also considered CEO pay for our financial services peers over multiple years as a reference.
The exhibit to the right illustrates the reasonableness of Mr. Dimon’s compensation relative to these peers (based on three-year average total compensation), particularly in light of the Firm’s strong absolute and relative performance over multiple years.
 
Prior 3-Year Average CEO Total Compensation (2012–2014)1  

1 
Total compensation is comprised of base salary, actual cash bonus paid in connection with the performance year, and long-term incentive compensation, including cash and equity-settled awards (the target value of long-term incentives awarded in connection with the performance year). The most recently used compensation data is 2014 since not all of our Financial Services peers will have filed their proxy statements before the preparation of our own proxy statement. Source: Proxy statements.


50    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


CEO HISTORICAL PAY-FOR-PERFORMANCE
 
The following page illustrates the strong connection between Mr. Dimon’s pay and the Firm’s performance since the financial crisis (i.e., last eight years), and reinforces the effectiveness of the CMDC’s balanced approach.
STRONG RELATIVE PAY-FOR-PERFORMANCE ALIGNMENT
As a percentage of profits, Mr. Dimon is the lowest paid CEO amongst our financial services peers (as measured by total compensation as a percentage of net income from 2012 to 2014).
We generated more cumulative net income over the last eight years than any of our financial services peers, while steadily increasing our common equity Tier 1 ratio.
In each of the last eight years, our ROTCE has been higher than the median of our financial services peers.
 

 
1
Percentage of profits paid is equal to three year average CEO compensation divided by three year average net income. Methodology for determining Total Compensation is provided on page 50, footnote 1. Source: Annual reports and proxy statements

STRONG ABSOLUTE PAY-FOR-PERFORMANCE ALIGNMENT
Variability in Mr. Dimon’s pay over the last eight years illustrates our commitment to paying for performance
*The Board significantly reduced Mr. Dimon’s pay in response to Chief Investment Office (“CIO”) trading losses.

JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    51


JAMES DIMON: CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Mr. Dimon became Chairman of the Board on December 31, 2006, and has been Chief Executive Officer and President since December 31, 2005. His key achievements in 2015 and related compensation are provided below.
MR. DIMON’S PAY-FOR-PERFORMANCE
2015 Performance
 • Strong ROTCE with record net income and record EPS
 • Exceeded the Firm’s targets relating to balance sheet optimization, capital, reducing its global systemically important bank (“GSIB”) surcharge and reducing expenses
 • Continued to invest significant resources in risk management and control, including technology, cybersecurity, and addressing issues that resulted in supervisory and enforcement actions
 • Led four leading client franchises, each maintaining or improving market share in a changing landscape, while substantially completing the business simplification agenda without a significant impact on profitability
 • Led significant effort to strengthen our talent pipeline through the creation of Leadership Edge, a firmwide program designed to help develop outstanding leaders at all levels of the Firm, across each of our lines of business and regions
 
2015 Compensation
80% of variable compensation awarded in PSUs

SUMMARY OF 2015 KEY ACHIEVEMENTS
Business Results
 
Risk & Control
 • Strong ROTCE of 13%, record net income of $24.4 billion and record EPS of $6.00, and year-over-year tangible book value per share growth of 8%, reflecting focus on efficiency and achieving cost synergies across lines of business
 • Maintained fortress balance sheet, increasing our Basel III Advanced Fully Phased-In CET1 capital ratio by 140 bps to 11.6%
 • Reduced expenses by over $2 billion, while continuing to invest in marketing, technology and people
 
 • Launched a global Culture and Conduct program focused on enhancing our strong corporate culture and instilling an enhanced sense of personal accountability in alignment with the “How We Do Business” framework
 • Further enhanced the Firm’s cybersecurity program, including more robust testing, advanced analytics, improved technology coverage, and a program to increase employee awareness about cybersecurity risks and best practices. The Firm nearly doubled its cybersecurity spending in 2015.
Customer & Clients
 
People Management & Leadership
 • Maintained or improved first class franchises:
— CCB had nearly 23 million active mobile customers by the end of 2015, a year-over-year increase of 20%
— CIB participated in six of the top ten fee-generating IB transactions in 2015 (per Dealogic)
— CB named #1 in customer satisfaction by CFO Magazine’s Commercial Banking Survey
— AM named #1 Private Bank in the World by Global Finance Magazine
 • Continued to support and accelerate Detroit’s recovery through the Firm’s 5-year, $100 million investment
 
 • Championed the Firm’s training and development initiatives, through creation of Leadership Edge, and the simplification and virtualization of the campus recruiting experience
 • Further emphasized our diversity program, with the development of the Office of Accessibility Affairs
 • Drove the employee wellness agenda to provide incentives for healthy behaviors, including 29 free onsite clinics and preventative screenings
 • Worked closely with the CMDC and the Board on Operating Committee members’ development and succession planning


52    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


MARIANNE LAKE: CHIEF FINANCIAL OFFICER
Ms. Lake was appointed Chief Financial Officer on January 1, 2013. She previously served as the CFO of our Consumer & Community Banking business from 2009 through 2012. Ms. Lake served as the Investment Bank’s Global Controller in the Finance organization from 2007 to 2009 and was previously in the Corporate Finance group managing global financial infrastructure and control programs. Ms. Lake’s key achievements in 2015 and related compensation are provided below.
MS. LAKE’S PAY-FOR-PERFORMANCE
 
2015 Performance
 • Priorities for Ms. Lake as she entered her third year as CFO were focused on improving and solidifying our Global Finance organization to help the Firm navigate the changing financial/regulatory landscape more effectively; enhancing our overall risk and control governance; improving relationships with our regulators, particularly with regards to reporting, Comprehensive Capital Analysis and Review (“CCAR”), and Recovery and Resolution; strengthening investor engagement; and leading certain people initiatives.
 • The CMDC considered Ms. Lake’s key achievements (highlighted below), as well as her growth in the role, her compensation relative to comparable CFOs and other NEOs, and her standing among high caliber CFOs in our industry. Ms. Lake was awarded total compensation of $11 million, up from $10 million in 2014.
 
 
 
 
 
 
 
 
 
 
2015 Compensation

SUMMARY OF 2015 KEY ACHIEVEMENTS
Business Results
 
Risk & Control
 • Continued guiding the Firm to achieve targeted capital ratios, adapt to new rules, and optimize against multiple binding constraints
 • Enhanced strategic processes and architecture, including furthering the Finance and Risk Roadmap vision and establishing a single data sourcing platform that will be used to maintain one data set across Finance, Risk and Capital
 • Improved the Firm’s capital stress testing framework along with the capital planning and adequacy process
 
Enhanced the Firm’s control environment and governance:
 • Established firmwide Data Governance organization, and launched firmwide Data Quality Issue Management process and tool-set
 • Continued execution on OCC Heightened Standards requirements for our national bank subsidiaries
 • Defined and implemented a legal entity simplification strategy and execution framework
 • Continued to make meaningful progress on Recovery and Resolution planning and Volcker metrics reporting
Customer & Clients
 
People Management & Leadership
 • Strong engagement with investors through multiple forums — including conferences, speaking engagements, group meetings and investor road shows
 • Improved and simplified earnings disclosure, launching a more succinct format of the earnings press release
 • Enhanced relationship with regulators through active engagement and regular dialogue
 
 • Established a robust diversity strategy for Finance, including the launch of a Black and Hispanic Advisory Council, while continuing to support firmwide initiatives as a senior sponsor of Women on the Move and the Women's Interactive Network ("WIN") Business Resource Group
 • Launched VP leadership program for diverse top talent

JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    53


MARY CALLAHAN ERDOES: CEO ASSET MANAGEMENT
Ms. Erdoes was appointed Chief Executive Officer of Asset Management (“AM”) in September 2009. She previously served as CEO of the J.P. Morgan Private Bank from 2005 to 2009. Ms. Erdoes’ key achievements in 2015 and related compensation are provided below.
MS. ERDOES’ PAY-FOR-PERFORMANCE
2015 Performance
 • Ms. Erdoes’ priorities were to deliver strong financial performance, including top line expansion, continue to achieve superior investment performance for clients, and further invest in talent, technology and controls to position AM for continued success.
 • In 2015, Ms. Erdoes led the AM business to once again deliver record revenue, continuing an impressive trend of strong top-line growth. Under the leadership of Ms. Erdoes, AM achieved yet another year of exceptional investment performance over the long-term while maintaining a client-focused, fiduciary culture, and addressing supervisory and enforcement matters, including written client disclosures. The CMDC considered her consistent execution against business priorities, and AM’s leadership positions for both Global Wealth Management and Global Investment Management, in determining that an increase in her total compensation from $16.5 million to $18 million was appropriate.
 
2015 Compensation

SUMMARY OF 2015 KEY ACHIEVEMENTS
Business Results
 
Risk & Control
Achieved strong financial results despite weaker markets:
 • Net Income of $1.9 billion on record revenue of $12.1 billion with 21% ROE and 27% pretax margin
 • Assets under management (“AUM”) of $1.7 trillion and client assets of $2.4 trillion
 • Net long-term AUM inflows of $16 billion and net long-term Client Assets inflows of $28 billion
 • Record average loan balances of $107.4 billion, up 8% from 2014
 
Continued focus on independent risk management and strong controls infrastructure:
 • Increased overall controls-related spending, adding over 650 new employees and investing in technology
 • Evaluated culture and conduct through focus groups in an effort to ensure alignment with firmwide standards
 • Implemented globally consistent standards for the bank’s fiduciary obligations
 • Successfully implemented first stage of Volcker rules for covered funds
Customer & Clients
 
People Management & Leadership
Continued to deliver sustained value to customers through outstanding performance:
 • 80% of mutual fund AUM ranked in the 1st or 2nd quartiles over five years
 • Record of 231 mutual funds ranked as 4 or 5 stars
 • Named #1 North America Private Bank by Euromoney
 
Executed on several key talent initiatives:
 • Effective retention, including 95% of senior top talent
 • Continued investment in talent by actively promoting mobility; 1,400 employees transferred internally during 2015
 • Continued sponsorship and support of a significantly expanded firmwide workforce Re-Entry program with 2015 placements across the Firm’s businesses, regions and functions


54    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


DANIEL PINTO: CEO CORPORATE & INVESTMENT BANK
Mr. Pinto was appointed Chief Executive Officer for the Corporate & Investment Bank (“CIB”) in March 2014, after previously serving as Co-CEO. Mr. Pinto has also been Chief Executive Officer of the Firm’s EMEA region since June 2011. Mr. Pinto’s key achievements in 2015 and related compensation are provided below.
MR. PINTO’S PAY-FOR-PERFORMANCE
2015 Performance
 • Mr. Pinto’s priorities were to continue to deliver strong financial performance and maintain or strive for CIB’s leadership positions across the full suite of CIB products. He was expected to continue to execute on business simplification efforts, achieve efficiency targets, and advance the Firm’s reputation with clients.
 • Mr. Pinto delivered strong results in a challenging environment; maintained CIB’s market-leading positions in most of the key business segments and made significant progress in areas where CIB was not yet a top player; largely completed business simplification and made progress on the multi-year cost reduction target; and continued to address supervisory and enforcement matters, including foreign exchange trading.
 • Mr. Pinto also successfully restructured his management team, retained and cultivated key talent, and reinforced a culture focused on doing what’s right for clients. The CMDC took into account these achievements when determining that an increase in his total compensation from $17 million to $18.5 million was appropriate.
 
2015 Compensation
For Mr. Pinto, the terms and composition of his compensation reflect the
requirements of local U.K. regulations (see page 67 for additional details).

SUMMARY OF 2015 KEY ACHIEVEMENTS
Business Results
 
Risk & Control
 • Achieved revenues of $33.5 billion despite headwinds on internal and external fronts
 • Net income of $8.1 billion, up 17%; ($9.2 billion excluding legal expense and business simplification)
 • ROE of 12%; (14% excluding legal expense and business simplification)
 • IB fees increased 3% to $6.7 billion, with advisory fees increasing 31% to $2.1 billion
 • Delivered a $1.6 billion expense reduction on our previously stated $2.8 billion target for 2017
 
Mr. Pinto helped lead the Firm’s efforts to enhance the risk and control environment, including:
 • Instituted a global cross-border program, including a library of country-specific rules, controls and monitoring processes, solutions and training designed to identify and mitigate cross-border risk
 • Examined culture and conduct from a top-down and bottom-up approach, which led to enhancements around leadership, face-to-face training, communications, hiring, and talent development
Customer & Clients
 
People Management & Leadership
 • #1 in Markets revenue with 16% market share
 • CIB participated in six of the top ten fee-generating IB transactions in 2015 (per Dealogic)
 • #1 in Global IB fees with 7.9% wallet share
 • Further strengthened the Firm’s reputation with clients, demonstrated by the Firm’s market positions:
— #1 in IB fees in North America and EMEA
— #1 in Equity Capital Markets wallet share
— #1 in Prime Brokerage by Institutional Investor
 
 • Restructured the CIB management team to provide
expanded roles for top performers to help drive sustained performance
 • Drove diversity initiatives across the organization, including a revamped global marketing strategy to specifically target untapped candidates; broadened efforts to promote and attract students to Winning Women and Launching Leaders programs; continued focus on early talent

JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    55


MATTHEW ZAMES: CHIEF OPERATING OFFICER
Mr. Zames was appointed Chief Operating Officer for the Firm in April 2013, after previously serving as Co-COO since July 2012. In this role, he oversees a number of critical firmwide functions and works closely with the lines of business and corporate functions to achieve the Firm’s strategic priorities, including management of the Firm’s liquidity, funding and structural interest rate risk through the Treasury and the Chief Investment Office. He also manages several strategic firmwide functions including Global Technology, Operations, Corporate Strategy, Global Real Estate, Oversight & Control, Compliance, Global Security & Military Affairs, Regulatory Affairs, Mortgage Capital Markets, Private Investments, Intelligent Solutions, Global Supplier Services, and Investigations, Global Services, and Global Business & Document Services. Mr. Zames’ key achievements in 2015 and related compensation are provided below.
MR. ZAMES’ PAY-FOR-PERFORMANCE
 
2015 Performance
 • Mr. Zames’ priorities were to continue to manage a broad portfolio of firmwide functions and to deliver firmwide strategic initiatives: build-out world class technology and cybersecurity capabilities, enhance conduct and culture programs, firmwide resource and expense optimization, and remediation of key regulatory issues. Mr. Zames was also accountable for key aspects of the Firm’s balance sheet including liquidity and interest rate risk management; GSIB optimization; and preparing the Firm for changes in Federal Reserve monetary policy.
 • The CMDC recognized Mr. Zames’ significant progress (highlighted below) against these priorities, the critical nature of his role and his compensation relative to pay for comparable executives and other NEOs in awarding him an increase in his total compensation from $17 million to $18.5 million.
 
 
 
2015 Compensation

SUMMARY OF 2015 KEY ACHIEVEMENTS
Business Results
 
Risk & Control
Successfully led key firmwide initiatives, including:
 • Implemented firmwide Intraday liquidity (“IDL”) framework, including real-time IDL management and reduction of IDL facilities by nearly $1 trillion
 • Introduced a comprehensive firmwide balance sheet framework designed to optimize business activities
 • Delivered on efforts to reduce non-operating deposits
 • Enhanced portfolio pricing that drove average core loan growth of $39 billion in mortgage banking
 
 • Implemented risk mitigating measures for funding and investment securities portfolio activities as required by the Volcker rule
 • Implemented Compliance Risk and Control metrics for key compliance risks
 • Built strong senior relationships with regulators and policy makers internationally through a consistent, comprehensive, issues-based coverage model
 • Converted substantially all enterprise-wide programs focused on top control issues to standard business operations
Customer & Clients
 
People Management & Leadership
 • Established a five-year real estate plan to fund $4.6 billion in capital investments, optimizing our real estate footprint
 • Drove technology innovations in digital, next generation cloud development, and big data and analytics
 • Established three cybersecurity operations centers, providing 24/7 monitoring capabilities
 • Increased control and governance of international defined benefit and defined contribution plans
 
 • Sponsored roll-out of firmwide Culture and Conduct Program generating feedback from over 16,000 focus group participants and business-led action plans
 • Drove hiring of 1,757 veterans, added 32 new companies to the Veterans Jobs Mission and awarded 113 homes to veterans
 • Appointed a number of key internal talent to expanded roles, while achieving additional efficiencies


56    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


2015 NAMED EXECUTIVE OFFICER COMPENSATION
 
The table below sets forth compensation awarded to our NEOs in connection with 2015, including salary and performance-based compensation paid in 2016 for 2015 performance. The table also contains compensation for the years 2013 and 2014, as applicable, for our NEOs whose compensation is reported in the Summary Compensation Table (“SCT”) for those years.
 
 
ANNUAL COMPENSATION (FOR PERFORMANCE YEAR)
Name and
principal position
 
 
INCENTIVE COMPENSATION
 
Year
Salary
Cash
RSUs
PSUs
Total
 
 
 
 
 
 
 
James Dimon
2015
$
1,500,000

$
5,000,000

$

$
20,500,000

$
27,000,000

Chairman and Chief
Executive Officer
2014
1,500,000

7,400,000

11,100,000


20,000,000

2013
1,500,000


18,500,000


20,000,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marianne Lake
2015
750,000

4,100,000

3,075,000

3,075,000

11,000,000

Chief Financial Officer
2014
750,000

3,700,000

5,550,000


10,000,000

 
2013
750,000

3,100,000

4,650,000


8,500,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mary Callahan Erdoes
2015
750,000

6,900,000

5,175,000

5,175,000

18,000,000

Chief Executive Officer Asset Management
2014
750,000

6,300,000

9,450,000


16,500,000

2013
750,000

5,700,000

8,550,000


15,000,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Daniel Pinto 1
2015
6,884,250


5,807,875

5,807,875

18,500,000

Chief Executive Officer Corporate &
Investment Bank
2014
7,415,796


9,584,204


17,000,000

2013
750,000

8,125,000

8,125,000


17,000,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Matthew Zames
2015
750,000

7,100,000

5,325,000

5,325,000

18,500,000

Chief Operating Officer
2014
750,000

6,500,000

9,750,000


17,000,000

2013
750,000

6,500,000

9,750,000


17,000,000

 
 
 
 
 
 


1 
Additional information on the composition of Mr. Pinto’s compensation is on page 67 of this proxy statement.
Interpreting 2015 NEO compensation
The table above is presented to show how the CMDC and Board viewed compensation awarded for 2015. It differs from how compensation is reported in the SCT on page 66, which is required by the Securities and Exchange Commission (“SEC”), and is not a substitute for the information required by the SCT. There are two principal differences between the SCT and the table above:
1.
The Firm grants both cash and equity incentive compensation after a performance year is completed. In both the table above and the SCT, cash incentive compensation paid in 2016 for 2015 performance is shown as 2015 compensation. The table above treats equity awards (restricted stock units and performance share units) similarly, so that equity awards granted in 2016 for 2015 performance are shown as 2015 compensation. The SCT reports the value of equity awards in the year in which they are made. As a result, awards granted in 2015 for 2014 performance are shown in the SCT as 2015 compensation.
2.
The SCT reports the change in pension value and nonqualified deferred compensation and all other compensation. These amounts are not shown above.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    57


PAY PRACTICES SUPPORT SHAREHOLDER INTERESTS
  Sound compensation philosophy drives compensation program and related decision-making at every level of the Firm
  Executives do not receive any special benefits, special severance, golden parachutes, or guaranteed bonuses
  Strong stock ownership guidelines and retention requirements create long-term alignment with shareholders
COMPENSATION PHILOSOPHY
 
Our compensation philosophy provides guiding principles that drive compensation-related decision-making across all levels of the Firm. We believe that a well-established and clearly communicated compensation philosophy drives fairness and consistency across the Firm. The table below sets forth a summary of our compensation philosophy.
KEY TENETS OF COMPENSATION PHILOSOPHY
 
Tying pay to performance and aligning with shareholders’ interests
 
Ÿ  In making compensation related decisions, we focus on long-term, risk-adjusted performance (including assessment of performance by the Firm’s risk and control professionals) and reward behaviors that generate sustained value for the Firm. This means compensation should not be overly formulaic, rigid or focused on the short term.
Ÿ  A majority of NEO incentive compensation should be in equity that vests over multiple years.
 
Encouraging a shared success culture
 
Ÿ  Teamwork should be encouraged and rewarded to foster a “shared success” culture.
Ÿ  Contributions should be considered across the Firm, within business units, and at an individual level when evaluating an employee’s performance.
 
Attracting and retaining top talent
 
Ÿ  Our long-term success depends on the talents of our employees. Our compensation system plays a significant role in our ability to attract, properly motivate and retain top talent.
Ÿ  Competitive and reasonable compensation should help attract and retain the best talent to grow and sustain our business.
 
Integrating risk management and compensation
 
Ÿ  Risk management, compensation recovery, and repayment policies should be robust and disciplined enough to deter excessive risk-taking.
Ÿ  HR control forums should generate honest, fair and objective evaluations and identify individuals responsible for meaningful risk-related events and their accountability.
Ÿ  Recoupment policies include recovery of cash and equity compensation.
Ÿ  Our pay practices must comply with applicable rules and regulations, both in the U.S. and worldwide.
 
 
 
No special perquisites and non-performance based compensation
 
Ÿ  Compensation should be straightforward and consist primarily of cash and equity incentives.
Ÿ  We do not have special supplemental retirement or other special benefits just for executives, nor do we have any change in control agreements, golden parachutes, merger bonuses, or other special severance benefit arrangements for executives.
 
 
 
Maintaining strong governance
 
Ÿ  Our CMDC is comprised entirely of independent directors. We believe independent director oversight of the Firm’s compensation practices and principles and their implementation fosters proper governance and regulatory compliance.
Ÿ  The CMDC defines the Firm’s compensation philosophy, reviews and approves the Firm’s overall incentive compensation pools, and approves compensation for our Operating Committee, including the terms of compensation awards; CEO compensation is subject to Board ratification.
 
 
 
Transparency with shareholders
 
Ÿ  We believe that transparency to shareholders relating to our executive compensation program is essential. In order to provide shareholders with enough information and context to assess our program and practices, and their effectiveness, we disclose all material terms of our executive pay program, and any actions on our part in response to significant events, as appropriate.


58    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


PAY PRACTICES ARE ALIGNED WITH COMPENSATION PHILOSOPHY
 
We believe the effectiveness of our compensation program is dependent upon the alignment of our pay practices with our compensation philosophy. The table below illustrates this strong alignment and further underscores our commitment to maintaining an executive compensation program that is consistent with best practice.
STRONG ALIGNMENT WITH SHAREHOLDERS (WHAT WE DO)
ü

Compensation philosophy
We believe our compensation philosophy promotes a best practice approach to compensation, including: (i) tying pay to performance and aligning with shareholder interests; (ii) attracting, retaining, and properly motivating top talent; (iii) integrating risk with compensation; (iv) maintaining strong governance; and (v) transparency.
ü

Hedging/pledging policy
Operating Committee members and directors are prohibited from any hedging or pledging of our shares, including: short sales; unvested RSUs/PSUs; unexercised options or stock appreciation rights (“SARs”); and hedging of any shares personally owned outright or through deferred compensation.
ü

Pay at risk
The majority of Operating Committee compensation is “at-risk” and contingent on achievement of business goals that are integrally linked to shareholder value and safety and soundness.
ü

Strong clawback policy
Comprehensive recovery provisions enable us to cancel or reduce unvested awards, or require repayment of cash or equity compensation already paid. In 2015, the CMDC adopted a mandatory disclosure policy for clawbacks taken against any of the Firm’s Operating Committee Members or the Firm’s Corporate Controller.
ü

Majority of variable compensation in deferred equity
The majority of Operating Committee members’ variable compensation is deferred in JPMorgan Chase common stock (in the form of PSUs and RSUs) that vests over a
3-year period. Value of equity at vesting is based on stock price at that time (in addition to achievement against pre-established goals for PSUs).
ü

Competitive benchmarking
To make informed decisions on pay levels and pay practices, we benchmark ourselves against our peer groups. We believe external market data is an important component of maintaining pay practices that will attract and retain top talent, while driving shareholder value.
ü

Risk events impact pay
In making pay decisions, we consider material risk and control issues, at both the Firm and line-of-business levels, and make adjustments to compensation, when appropriate.
ü

Responsible use of equity
We manage our equity program responsibly, using only approximately 1% of weighted average diluted shares in 2015. In addition, our share buyback program significantly reduces shareholder dilution.
ü

Strong share ownership guidelines
Operating Committee members, including NEOs, are required to own a minimum of 200,000 to 400,000 shares of our common stock; the CEO must own a minimum of 1,000,000 shares.
ü

Shareholder outreach
Each year, we solicit feedback from our shareholders on our compensation programs and practices. The CMDC considers this feedback when making compensation decisions.
SOUND GOVERNANCE PRACTICES (WHAT WE DON’T DO)
x
No golden parachute agreements
We do not provide additional payments or benefits in connection with a change-in-control event.
x


No guaranteed bonuses
We do not provide guaranteed bonuses, except for select individuals at hire, for one year
x


No special severance
We do not provide special severance. All employees, including NEOs, participate at the same level of severance, based on years of service, capped at 52 weeks up to a maximum credited salary.
x


No special executive benefits
– No private club dues, financial planning or tax
   gross-ups for benefits
– No special health or medical benefits
– No 401(k) Savings Plan matching contribution
– No special pension credits


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    59


OWNERSHIP GUIDELINES AND RETENTION REQUIREMENTS
 
Operating Committee members, including our NEOs, are subject to both ownership guidelines and holding requirements.
Ownership Guidelines
While on the Operating Committee, each member is required to own a minimum of between 200,000 to 400,000 shares of the Firm’s common stock, with the CEO required to own a minimum of 1,000,000 shares. Shares that count toward the required ownership levels include shares owned outright and 50% of unvested RSUs and PSUs (but do not include stock options or stock appreciation rights). Operating Committee members have six years from the effective date of the policy (or, if later, their date of appointment to the Operating Committee) to meet their required ownership guideline.
Retention Requirements
In addition to the ownership guidelines, Operating Committee members are required to hold 75% of the net shares they receive from awards, until they achieve
 
their respective ownership guideline, and 50% thereafter (75% for the CEO). This policy is designed to increase share ownership above required levels for long-tenured members of our Operating Committee, thus further aligning their interests with those of shareholders. The policy was updated in 2015 to clarify that the retention requirements do not apply to shares received in connection with employment pre-dating appointment to the Operating Committee (applicable only to executives who joined the Operating Committee in 2013 or later). Any exceptions are subject to approval by the General Counsel.
Mr. Dimon not only complies with all of these ownership guidelines and retention requirements, but has not sold a single share of JPMorgan Chase common stock or, prior to the merger, Bank One Corporation common stock, whether acquired as part of his compensation or on the open market, since he became CEO of Bank One in March of 2000.



Our Retention Requirements Create Strong Alignment with Shareholders
1  
Share ownership includes shares owned outright + 50% of unvested RSUs and PSUs.
2  
Assumes individual has achieved minimum ownership requirement of 300K shares, otherwise must retain 75% of shares vesting (37.5K shares).


60    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


EXECUTIVE COMPENSATION IS LINKED WITH RISK & CONTROL
  Review processes to evaluate risk and control behaviors and to hold executives accountable
  Active engagement, transparency and assessments of risk and control issues by control function heads, leaders and subject matter experts across the Firm
  Cancellation and clawback provisions cover all forms of incentive compensation combined with formal and disciplined processes for review and determinations
 New for 2015, Board approved clawback disclosure policy to further enhance our transparency 
GOVERNANCE PROCESS
 
The CMDC oversees our firmwide compensation programs. Key responsibilities of the CMDC relating to compensation include:
Defining the Firm’s compensation philosophy
Reviewing and approving overall incentive compensation pools (including percentage paid in equity/cash)
Reviewing and approving compensation for our Operating Committee and, for the CEO, making a recommendation to the Board for consideration and ratification by the independent directors
Reviewing and approving the terms of compensation awards, including recovery/clawback provisions
Reviewing the Firm’s compensation practices as they relate to risk and control (including the avoidance of practices that could encourage imprudent and excessive risk taking)
Adopting pay practices that comply with applicable rules and regulations, both in the U.S. and worldwide
Approving 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
The CMDC performs the aforementioned roles on an ongoing basis so that our compensation program is proactive in addressing both current and emerging challenges. In addition, we have Control Forums facilitated by Human Resources at the Firm, line of business and regional levels (“HR Control Forums”), the outcomes of which are factored into our compensation decisions. These processes are further discussed below.
 
RISK & CONTROL REVIEW PROCESS
 
Our executive compensation program is designed to hold executives accountable, when appropriate, for meaningful actions or issues that negatively impact business performance in current or future years.
The Firm conducts reviews through HR Control Forums to discuss meaningful risk and control issues that may have surfaced in other committees (e.g., Risk Committees and Business Control Committees), and review potential individual accountability and discuss any attendant group, people or proposed compensation pool impact. HR Control Forums are conducted on a quarterly basis in a number of regions and at various levels of the Firm and geographies including:
Line of Business/Corporate Control Forums — Each line of business (“LOB”) and Corporate reviews meaningful risk and control issues related to its specific line of business and firmwide that may have potential individual or group accountability.
Regional Control Forums — Issues that arise in a given geography (both within and across LOBs/Corporate) are also identified and assessed in Regional Control Forum meetings. Issues are referred to LOB/Corporate forums or escalated to the firmwide forums, as appropriate.
Firmwide Control Forums — Aggregate findings, including actions recommended or taken by LOB, Corporate, and Regional Forums, are reviewed and the CMDC is provided a summary of overall items and receives more detailed information on significant items.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    61


Performance management reviews for Designated Employees
In addition to the HR Control Forums, the Firm also conducts performance management reviews for all material risk takers (including Operating Committee members), identified under Federal Reserve and/or European Union standards — a group we refer to as “Designated Employees.” We solicit feedback directly from the Firm’s risk and control professionals who independently assess employees’ risk and control behavior. This feedback is used to assess whether our Designated Employees are meeting our risk/control behavior expectations and to hold individuals accountable for this aspect of their performance. The feedback from the risk and control process is critical in helping to identify individuals responsible for significant risk and control behavior or conduct issues, supervisory issues (e.g., failure to supervise, anticipate a material issue, or take appropriate action when the issue arose), and other risk and control related issues that impact the Firm. This input is used in managers’ evaluations of Designated Employees’ performance and is considered in determining annual compensation, and when appropriate, any recovery or clawback actions taken by the Firm. Components of the independent risk and control evaluation apply to over 15,000 employees of the Firm in an effort to more formally assess risk and control behaviors. We also conduct online training for risk and control reviewers and training for managers in order to further strengthen the process.
HOLDING INDIVIDUALS ACCOUNTABLE
 
To hold individuals responsible for taking risks inconsistent with the Firm’s risk appetite and to discourage future imprudent behavior, the Firm has policies and procedures that enable us to take prompt and proportionate actions with respect to accountable individuals including:
1.
Reduction of annual incentive compensation (in full or in part);
2.
Cancellation of unvested awards (in full or in part);
3.
Recovery of previously paid compensation (cash and/or equity); and
4.
Taking appropriate employment actions (e.g., termination of employment, demotion, negative performance rating).
 
The precise actions we take with respect to accountable individuals are based on the nature of their involvement, the magnitude of the event and the impact on the Firm. A description of our recovery provisions (#2 and #3 above) is provided in the following section.
CLAWBACK/RECOVERY PROVISIONS
 
We maintain clawback/recoupment provisions on both cash incentives and equity awards, which enable us to reduce or cancel unvested awards and recover previously paid compensation in certain situations. Incentive awards are intended and expected to vest according to their terms, but strong recovery provisions permit recovery of incentive compensation awards in appropriate circumstances. The following table provides details on the clawback provisions that apply to our Operating Committee Members and the Firm’s Corporate Controller (including the NEOs).
In 2015, the CMDC formally adopted a clawback disclosure policy that requires the Firm to disclose whether or not there has been any recoupment or recovery of previously paid compensation from a senior executive, so long as the underlying event has already been publicly disclosed in an SEC filing or similar public communication. During 2015, we did not take any actions to recover or clawback any incentive compensation from an Operating Committee member or the Firm’s Corporate Controller.












62    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


1
Unexercisable SARs may be cancelled or deferred if the CEO determines that such action is appropriate based on a set of determination factors, including net income, net revenue, return on equity, earnings per share and capital ratios of the Firm, both on an absolute basis and, as appropriate, relative to peer firms.
2
Provisions apply to PSUs and to RSUs granted in 2012 and after to members of the Operating Committee and may result in cancellation of up to a total of 50% of the award.

UK clawback provisions
The Prudential Regulation Authority (“PRA”) and Financial Conduct Authority (“FCA”) require that discretionary incentive compensation awards made by regulated firms to certain employees identified under local regulations as material risk takers ("Identified Staff"), including Mr. Pinto, are subject to potential clawback/recovery for a minimum period of seven years following the date of the award. 
In accordance with these rules, the Firm has a Clawback Policy for relevant Identified Staff that enables us to cancel and/or recover incentive compensation in certain circumstances, including when: (1) an individual participated in or was responsible for conduct which resulted in significant loss(es) to the Firm; (2) an individual failed to meet appropriate standards of fitness and propriety set down by the FCA and/or PRA for regulatory purposes; (3) there is reasonable evidence of misbehavior or misconduct, or material error that would justify, or would have justified, termination of employment for cause; and/or (4) any LOB in which the individual is employed (or for which the individual is responsible) suffers a material failure of risk management by reference to the Firm’s risk management standards.
Incentive compensation awards made to relevant Identified Staff on or after January 1, 2015, including Mr. Pinto’s incentive compensation awards in January 2016, are subject to the aforementioned Clawback Policy in addition to the recovery provisions in the table above.

JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    63


UK Individual Accountability Regime
The PRA and the FCA have introduced a new Individual Accountability Regime for certain UK regulated firms, which includes Senior Manager and Certification Regimes.
Under the Senior Manager Regime, firms are required to seek approval for employees (and senior non-executives) to hold certain senior management functions. Those “senior managers” are then subject to a statutory duty to demonstrate that they took reasonable steps to prevent or address regulatory issues, with the possibility of criminal and civil sanctions if they failed to do so. Under the Certification Regime, employees with a greater number of roles must be internally certified by the Firm as fit and proper to undertake that role.
Both Regimes require firms to undertake ongoing assessment of the fitness and propriety of the in scope employees, impose prescribed Conduct Rules on those individuals, and introduce referencing and reporting requirements.
RECOVERY PROCEDURES
 
Issues that may require recovery determinations can be raised at any time, including in meetings of the Firm’s risk committees, HR Control Forums, annual assessments of employee performance and when material risk-takers resign or their employment is terminated by the Firm. Our well-defined process to govern these determinations is as follows:
A formal compensation review would occur following a determination that the cause and materiality of a risk-related loss, issue or other set of facts and circumstances warranted such a review.
The CMDC is responsible for determinations involving Operating Committee members (determinations involving the CEO are subject to ratification by independent members of the Board). The CMDC has delegated authority for determinations involving other employees to the Head of Human Resources, who facilitates determinations involving all other employees based on reviews and recommendations made by a committee generally comprised of the Firm’s senior Risk, Human Resources, Legal, Compliance, Audit and Financial officers and the Chief Executive Officer of the line of business for which the review was undertaken.
 
INTEGRATING RISK WITH THE COMPENSATION FRAMEWORK
 
To encourage a culture of risk awareness and personal accountability, we approach our incentive compensation arrangements through an integrated risk, finance, compensation and performance management framework. Employee conduct that gives rise to risks that may impact the Firm’s performance in either the current year or future years are considered by the CMDC in determining bonus pools. In addition, significant governmental and regulatory actions ordinarily have a negative impact on relevant incentive compensation pools insofar as the determination of such pools, while not formulaic, involves consideration of financial performance (including settlement payments and fines), as well as risk and control issues. Matters that have been considered in the determination of incentive compensation pools in recent years include, among others, the December 2015 resolution between the U.S. Securities and Exchange Commission and certain of the Firm’s subsidiaries concerning written client disclosures, as well as resolutions of investigations and/or litigation involving foreign exchange trading and losses suffered in 2012 by the Chief Investment Office.
NO HEDGING/PLEDGING
 
All employees are prohibited from the hedging of unvested restricted stock units and performance share units, and unexercised options or stock appreciation rights. In addition:
The hedging by an Operating Committee member of any shares owned outright or through deferred compensation is prohibited
Shares held directly by an Operating Committee member or director may not be held in margin accounts or otherwise pledged
For additional information on the hedging/pledging restrictions applicable to our directors, please see “Director Compensation” on page 29 of this proxy statement.



64    JPMORGAN CHASE & CO.    2016 PROXY STATEMENT


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 CMDC 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, 2015. This report is provided as of March 15, 2016, by the following independent directors, who comprise the Compensation & Management Development Committee:
Lee R. Raymond (Chairman)
Stephen B. Burke
William C. Weldon

The Compensation Discussion and Analysis is intended to describe our 2015 performance, the compensation decisions for our Named Executive Officers and the Firm’s philosophy and approach to compensation. The following tables on pages 66–74 present additional information required in accordance with SEC rules, including the Summary Compensation Table.


JPMORGAN CHASE & CO.    2016 PROXY STATEMENT    65


Executive compensation tables
I. SUMMARY COMPENSATION TABLE (SCT)
The following table and related narratives present the compensation for our Named Executive Officers in the format specified by the SEC. The table below reflects equity awards made in 2015 for 2014 performance. The table of “2015 Named Executive Officer Compensation” on page 57 of this proxy statement shows how the CMDC viewed compensation actions.
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 Dimon5
2015
 
$
1,500,000

 
$
5,000,000

 
$
11,100,000

 
$

 
$
9,253

 
$
621,060

6 
$
18,230,313

Chairman and CEO
2014
 
1,500,000

 
7,400,000

 
18,500,000

 

 
55,816

 
245,893