DEF 14A 1 jpmc2017definitiveproxy.htm DEF 14A Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Securities Exchange Act of 1934
(Amendment No.      )
 
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JPMorgan Chase & Co.
270 Park Avenue
New York, New York 10017-2070
April 5, 2017
Dear fellow shareholders:
We are pleased to invite you to the annual meeting of shareholders to be held on May 16, 2017, at the JPMorgan Chase Delaware Technology Center, Wilmington, Delaware. 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.
This proxy statement explains more about proxy voting. Please read it carefully. We look forward to your participation.
Sincerely,
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James Dimon
Chairman and Chief Executive Officer






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Notice of 2017 Annual Meeting of Shareholders and Proxy Statement
DATE
 
Tuesday, May 16, 2017
 
TIME
 
10:00 a.m. Eastern Time
 
PLACE
 
JPMorgan Chase & Co. Delaware Technology Center
880 Powder Mill Road
Wilmington, Delaware 19803
 
 
 
 
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 2017
 
 
l
Advisory vote on frequency of advisory resolution to approve executive compensation
 
 
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
 
 
 
 
 
 
 
Molly Carpenter
 
 
Secretary
 
 
 
 
 
 
 
April 5, 2017
 

 

Please vote promptly.
On or about April 5, 2017, we sent to shareholders of record at the close of business on March 17, 2017, 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 2017 Proxy Statement and Annual Report for the year ended December 31, 2016, 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 driver’s license or passport, and proof of ownership of our common stock as of our record date March 17, 2017. See “Attending the annual meeting” on page 98 of this proxy statement.
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 97 of this proxy statement.





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2017 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 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 has been prepared by our management and approved by the Board, and is being sent or made available to our shareholders on or about April 5, 2017.
 
Annual meeting overview
MATTERS TO BE VOTED ON
 
ü
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
 
 
 
The Board of Directors recommends you select "One Year" on the frequency of the advisory resolution to approve executive compensation (for more information see page referenced):
 
 
 
4. Advisory vote on frequency of advisory resolution to approve executive compensation
 
 
 
 
 
 
û
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):
 
 
 
5. Independent board chairman
 
 
 
6. Vesting for government service
 
 
 
7. Clawback amendment
 
 
 
8. Gender pay equity
 
 
  9. How votes are counted
 
 
10. Special shareowner meetings



JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    1


Election of Directors
The Board of Directors has nominated the 12 individuals listed below; if elected at our annual meeting, they are expected to serve until next year’s annual meeting. All of the nominees are currently serving as directors.
The Board has nominated 12 directors: 11 independent directors and the CEO
 
 
 
 
 
 
 
 
 
 
 
NOMINEE
 
AGE
 
PRINCIPAL OCCUPATION
 
DIRECTOR of JPMORGAN CHASE SINCE1
 
OTHER PUBLIC
COMPANY BOARDS (#)
 
COMMITTEE MEMBERSHIP2
Linda B. Bammann
 
61
 
Retired Deputy Head of Risk Management of JPMorgan Chase & Co.3
 
2013
 
0
 
Directors’ Risk Policy (Chair)
James A. Bell
 
68
 
Retired Executive Vice President of The Boeing Company
 
2011
 
3
 
Audit (Chair)
Crandall C. Bowles
 
69
 
Chairman Emeritus of The Springs Company
 
2006
 
1
 
Audit;
Public Responsibility (Chair)
Stephen B. Burke
 
58
 
Chief Executive Officer of NBCUniversal, LLC
 
2004

 
1
 
Compensation & Management Development;
Corporate Governance & Nominating
Todd A. Combs
 
46
 
Investment Officer at Berkshire Hathaway Inc.
 
2016
 
0
 
Directors’ Risk Policy;
Public Responsibility
James S. Crown
 
63
 
President of Henry Crown and Company
 
2004
 
1
 
Directors’ Risk Policy
James Dimon
 
61
 
Chairman and Chief Executive Officer of JPMorgan Chase & Co.
 
2004

 
0
 
 
Timothy P. Flynn
 
60
 
Retired Chairman and Chief Executive Officer of KPMG
 
2012
 
3
 
Audit;
Public Responsibility
Laban P. Jackson, Jr.
 
74
 
Chairman and Chief Executive Officer of Clear Creek Properties, Inc.
 
2004
 
0
 
Audit
Michael A. Neal
 
64
 
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)
 
78
 
Retired Chairman and Chief Executive Officer of Exxon Mobil Corporation
 
2001
 
0
 
Compensation & Management Development (Chair);
Corporate Governance & Nominating
William C. Weldon
 
68
 
Retired Chairman and Chief Executive Officer of Johnson & Johnson
 
2005
 
2
 
Compensation & Management Development;
Corporate Governance & Nominating (Chair)
1 
Director of a heritage company of the Firm as follows: Bank One Corporation: Mr. Burke (2003-2004), Mr. Crown (1996-2004), Mr. Dimon, Chairman of the Board (2000-2004), and Mr. Jackson (1993-2004); First Chicago Corp.: Mr. Crown (1991-1996); and J.P. Morgan & Co. Incorporated: Mr. Raymond (1987-2000).
2 
Principal standing committees. In March 2017, Ms. Bammann became Chair of the Directors’ Risk Policy Committee and stepped down from the Public Responsibility Committee; Mr. Bell became Chair of the Audit Committee; Mr. Combs joined the Directors’ Risk Policy Committee and the Public Responsibility Committee; and Mr. Flynn joined the Audit Committee and stepped down from the Directors’ Risk Policy Committee.
3 
Retired from JPMorgan Chase & Co. in 2005


2    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


Performance, governance and compensation highlights
The following information is presented to provide a summary of 2016 Firm performance, key governance enhancements in 2016, and context for the operation of our pay program which is discussed in more detail in our Compensation Discussion and Analysis beginning on page 35 of this proxy statement.
NOTABLE CHANGES SINCE 2016 ANNUAL MEETING
 
 
 
 
 
Board Refreshment
 
Board Committee Rotation
 
Environmental, Social & Governance ("ESG")
 
 
 
 
 
 • Todd A. Combs elected in September 2016
 • Since May 2011, five independent directors have joined the Board, each bringing a unique set of skills and experience
 • Board believes refreshment of directors is integral to an effective governance structure
 
 • In January 2017, Board approved changes to Audit and Risk Policy committees
 • Audit: Mr. Bell became Chair and Mr. Flynn joined the committee
 • Risk Policy: Ms. Bammann became Chair and Mr. Combs joined the committee
 
 • We published a dedicated ESG Report last year, updating many topics from 2014’s “How We Do Business – The Report”
 • Next edition expected to be published in Spring 2017
 • We are committed to providing information on how we leverage our resources and capabilities to solve pressing ESG challenges
 
 
 
 
 
STRONG 2016 PERFORMANCE CONTINUES TO SUPPORT SUSTAINED SHAREHOLDER VALUE
 
 
 
 
 
JPMorgan Chase & Co. delivered return on tangible common equity (“ROTCE”)1 of 13%, achieved record net income and record earnings per share (“EPS”), gained market share in almost all of our businesses, and continued to deliver sustained shareholder value over an extended period of time.
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SUSTAINED SHAREHOLDER VALUE ("TSR")2
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1
Return on tangible common equity (“ROTCE”) and tangible book value per share (“TBVPS”) are each non-GAAP financial measures. For a reconciliation and explanation of these non-GAAP measures, see page 102. On a comparable GAAP basis for 2016, return on equity (“ROE”) was 10% and book value per share (“BVPS”) was $64.06.
2  
Total shareholder return assumes reinvestment of dividends


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    3


WE MAINTAIN FORTRESS OPERATING PRINCIPLES WITH FOCUS ON CAPITAL, LIQUIDITY, RISK, CONTROLS AND CULTURE
 
 
 
 
 
 
 
 
 • We maintained our fortress balance sheet, growing our Basel III Advanced Fully Phased-In common equity Tier 1 (“CET1”) capital ratio1 by 60 bps to 12.2% and maintaining $524 billion of high quality liquid assets.
 • We continued to strengthen and reinforce our culture and business principles. The culture and conduct program is a key priority for every line of business and function.
 • We have embedded our business principles throughout the employee life cycle, starting with the recruiting and onboarding process and extending to training, compensation, promoting and disciplining employees.
 • We have invested significantly in our control environment including a control headcount of 43,000 professionals with a control spend of approximately $8 billion.
 
 
 
 
 
 
 
 
WE ARE COMMITTED TO GOOD CORPORATE GOVERNANCE AND ARE ENGAGED WITH OUR SHAREHOLDERS
 
 
 
 
 
 
 
 
The Board maintains a robust Lead Independent Director role and is committed to sound and commonsense governance principles.
Our Board has endorsed the Shareholder Director Exchange (SDX) Protocol as a guide for engagement.
 
RECENT UPDATES
 
 
 
GOVERNANCE
 
 
 
 
 
 
 
 
 
Our engagement process, and the feedback gained from it, was a significant factor in the Board’s continued effort to appoint new directors as well as rotate directors across key committees.
 
 
 
 
 
 
 
 
COMPENSATION
 
 
 
 
 
 
 
 
 
 
In 2016, our shareholder engagement initiatives included:
Ÿ Shareholder Outreach:  More than 90 discussions on strategy, financial performance, governance, compensation, and environmental & social issues with shareholders representing over 40% of our shares
Ÿ Annual Investor Day: Senior management gave presentations at our annual Investor Day on strategy and financial performance
Ÿ Meetings/Conferences: Senior management hosted more than 60 investor meetings and presented at 12 investor conferences
Ÿ Annual Meeting:  Our CEO and Lead Independent Director presented to shareholders at the Firm’s annual meeting
 
 
In response to a strong say-on-pay vote last year (92% support) and positive shareholder feedback, for our 2016 pay program we maintained the changes that were made in 2015, including:
 
 
PSU Program
 
CEO Pay Mix
 
Clawback Policy
 
 
 
 
 
 
 
 
 
Forward looking equity with payout formulaically determined based on both absolute and relative ROTCE performance
 
Smaller portion of variable compensation in cash, with 100% of equity in the form of
at-risk PSUs
 
Increased transparency by disclosing whether any clawbacks have taken place for senior executive officers
 
 
 
 
 
 
 
 
 
In addition to the above, other aspects of our pay program continue to be aligned with the interest of shareholders, including:
 • Holistic assessment of performance in determining variable pay award levels while using a formula to determine PSU value at vesting
 • Strong stock ownership guidelines and retention requirements
 • No special executive benefits/severance or golden parachutes
 • Rigorous process to review risk and control which may impact compensation pools and individual pay
 • Strong cancellation and clawback provisions cover both cash and equity awards
 
 
 
1 
The CET1 capital ratio under the Basel III Fully Phased-In capital rules is considered a key regulatory capital measure. For more information, see Notes on key performance measures on page 102.


4    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


MR. DIMON’S 2016 COMPENSATION IS ALIGNED WITH HIS MULTI-YEAR PERFORMANCE
 
In assessing Mr. Dimon's performance, the Board considered his achievements holistically against business results, risk and control, customers and clients, and people and leadership. The Board took into account Mr. Dimon's performance in leading the Firm over a sustained period of time, including strong performance in 2016.
I.
Business results: During 2016, the Firm again achieved record net income and record EPS, while generating strong ROTCE results of 13%1 on average tangible common equity of $180 billion1 (vs. $170 billion in 2015).
II.
Risk and Control: The Board also recognized that Mr. Dimon deployed substantial resources to fortify our control environment, which has led to a control infrastructure that better permeates across and deeply within our businesses. Mr. Dimon has fostered a culture that seeks continuous improvement and regards the risk and control agenda as a top priority, which reflects the Firm's ability to successfully adapt to an evolving regulatory landscape.
III.
Customers and Clients: Mr. Dimon has guided the Firm’s focus on creating and enhancing services that add value to our customers and clients through product innovation, cutting edge technologies, and simplified processes.
IV.
People and Leadership: Mr. Dimon’s stewardship over the Firm’s People and Leadership agenda, has led to a highly effective management development program (Leadership Edge), a robust pipeline of leaders across the organization and a diversity strategy that attracts, motivates, and retains some of the best possible talent.
Based on Mr. Dimon's performance, the Board increased his annual compensation to $28 million (from $27 million in 2015). The Board also considered several other factors, some of which are set forth on pages 47–49.
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1
TBVPS and ROTCE are each non-GAAP financial measures. For a reconciliation and explanation of these non-GAAP measures, see page 102. On a comparable U.S. GAAP basis, for 2008 through 2016 respectively, return on equity (“ROE”) was 4%, 6%, 10%, 11%, 11%, 9%, 10%, 11%, and 10%, and book value per share (“BVPS”) was $36.15, $39.88, $42.98, $46.52, $51.19, $53.17, $56.98, $60.46, and $64.06.
2
Despite record net income and 15% ROTCE, the Board exercised discretion relating to risk and control and reduced Mr. Dimon’s pay in 2012.


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    5


























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6    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT




 











Proposal 1:
Election of Directors
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Our Board of Directors has nominated 12 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.
ü
RECOMMENDATION:
Vote FOR all nominees





JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    7


Proposal 1 — Election of directors
EXECUTIVE SUMMARY
 
Our Board has nominated 12 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 11 were elected to the Board by our shareholders at our 2016 annual meeting, each with the support of more than 96% of votes cast. In September 2016, the Board elected Todd A. Combs to a term expiring at the 2017 annual meeting. For an overview of each of our nominees, see page 2 of this proxy statement.
Each of the 12 nominees has agreed to be named in this proxy statement and to serve if elected. All of the nominees are expected to attend our 2017 annual meeting. If any of our nominees becomes unavailable to stand for election, the proxies named on the proxy card intend to vote your common stock for the election of any substitute nominee proposed by the Board of Directors.
The Board is responsible for overseeing management and promoting sound corporate governance on behalf of shareholders. Risk management oversight is a key priority. The Board carries out its responsibilities through experienced independent directors, the Lead Independent Director, a well-developed committee structure and adherence to our Corporate Governance Principles. The Board conducts an annual assessment aimed at enhancing its effectiveness, as described on page 25 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 continual evaluation of new candidates for Board membership, and recommends to the Board a slate of nominees for election at each annual meeting of shareholders. The Governance Committee considers all relevant attributes of each Board candidate, including professional skills, experience and knowledge, and gender, race, ethnicity, nationality and background, and other attributes, with the goal of putting forth a diverse slate of candidates with a combination of skills, experience and personal qualities that will serve the Board and its committees, the Firm and our shareholders well.
 
Since our last annual shareholders meeting, the Governance Committee, using the process described above and taking into account, among other factors, shareholders’ interest in board refreshment and specifically adding directors with experience in risk management and financial services, recommended Todd A. Combs for election. Mr. Combs was introduced to Mr. Dimon in 2014 through discussions with Warren Buffett, Chairman of the Board and Chief Executive Officer of Berkshire Hathaway Inc., where Mr. Combs is an investment officer. Based on the introduction and Mr. Combs’ experience and reputation, Mr. Dimon suggested that the Governance Committee consider Mr. Combs as a prospective candidate. After meeting with Mr. Combs and reviewing his qualifications, which include experience in financial markets, risk assessment, and regulatory issues, his constructive personal attributes and his independence, the Governance Committee recommended his election by the Board in September 2016. For information on Mr. Combs’ qualifications, see page 14 of this proxy statement.
Board refreshment and succession
Director succession and an appropriate balance of refreshment and experience is a focus of the Governance Committee and the Board. The Governance Committee engages in ongoing consideration of potential Board candidates. Of the Board’s 11 independent directors, five have joined the Board since May 2011. The average tenure of our independent directors is 8.7 years as of year-end 2016. Mr. Combs’ election reflects the Board’s commitment to refreshment and its ongoing efforts to build and consider a pipeline of qualified candidates. New directors are subject to an onboarding process which includes, among other items, new director orientation and education, Code of Conduct training, and one-on-one meetings with Board members, management, and certain of our regulators. Educational opportunities are provided to all directors on a continuing basis.
The Board also considered succession and refreshment in its review of Board committee membership. In March 2017, Ms. Bammann became Chair of the Directors’ Risk Policy Committee and stepped down from the Public Responsibility Committee; Mr. Bell became Chair of the Audit Committee; Mr. Combs joined the Directors’


8    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


Risk Policy Committee and the Public Responsibility Committee; and Mr. Flynn joined the Audit Committee and stepped down from the Directors’ Risk Policy Committee.
As part of planning for director succession, candidates for director are recommended by shareholders, management, as well as Board members. In addition, the Governance Committee is assisted in identifying potential candidates by a third-party advisor. The Governance Committee considers shareholder-recommended candidates on the same basis as nominees recommended by Board members, management and third-party advisors. Shareholders who want to recommend a candidate for election to the Board may do so by writing to the Secretary at: JPMorgan Chase & Co., 270 Park Avenue, New York, NY 10017; or by writing an email to the Office of the Secretary at corporate.secretary@jpmchase.com.
Our Corporate Governance Principles require a non-management 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 to accept the offer. The Board believes that, while refreshment is an important consideration in assessing Board composition, the best interests of the Firm are served by taking advantage of all available talent and the Board should not make determinations based solely on age.
Consistent with this Principle, 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 their offers, taking into account their contributions, the results of the annual Board and Committee self-assessment processes, and ongoing succession planning for the Board. The Board determined that Mr. Raymond and Mr. Jackson each possesses the capability and judgment the Board looks for in a director, that each has broad experience both within and outside the Firm that continues to be of great value to the Board and that their continued service as directors is in the best 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. As Chairman of the Audit Committee during 2016, Mr. Jackson met with regulators of the Firm worldwide and will continue to bring his knowledge and expertise as a member of the Audit Committee. Both also participate in shareholder engagement, including speaking with certain of our shareholders about our strategy and business practices. 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 did not accept either offer not to stand for re-election. 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 17 and 16, respectively, of this proxy statement. For a description of the annual Board and committee self-assessment process, see page 25 of this proxy statement.



JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    9


DIRECTOR CRITERIA
 
In selecting candidates for director, the Board looks for individuals with demonstrated experience and success in certain executive fields, constructive personal attributes and diverse backgrounds, including the following:
Executive experience
Finance and accounting – knowledge of accounting and financial reporting and of auditing processes and standards
 
 
 
 
 
Financial services – experience in or with the financial services industry, including investment banking and global financial markets
 
 
 
 
 
International business operations – operational experience in diverse geographic, political and regulatory environments
 
 
 
 
 
Leadership of a large, complex organization – senior executive experience managing business operations, development and strategic planning
 
 
 
 
 
Management development and succession planning – experience in senior executive development, succession planning, and compensation matters
 
 
 
 
 
Public company governance – knowledge of public company governance issues, policies and best practices
 
 
 
 
 
Technology – experience with or oversight of innovative technology, cybersecurity, information systems/data management, fintech or privacy, and their related risks
 
 
 
 
 
Regulated industries and regulatory issues – experience with regulated businesses, regulatory requirements, and relationships with regulators
 
 
 
 
 
Risk management and controls – experience in assessment and management of business and financial risk factors


 
Personal attributes
Integrity
 
Judgment
 
Strong work ethic
 
Strength of conviction
 
Collaborative approach to engagement and oversight
 
Inquisitive and objective perspective
The Firm’s director criteria are also discussed in the Corporate Governance Principles document available on our website at jpmorganchase.com/corp-gov-principles, 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 16, 2017, and all other biographical information is as of the date of this proxy statement.
Effective May 2016, and in the case of Mr. Combs September 2016, all of the directors of the Firm were elected as directors of both JPMorgan Chase Bank, National Association (“Bank”) and Chase Bank USA, National Association, wholly-owned subsidiaries of JPMorgan Chase. Messrs. Crown and Jackson have been directors of the Bank since 2010 and Mr. Weldon since 2013. Mr. Weldon is the non-executive Chairman of the Board of the Bank.


10    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT



 

As the graph below indicates, the majority of our Board has experience in each of the executive fields defined on the previous page.

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JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    11


Linda B. Bammann, 61                
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Director since 2013
Directors’ Risk Policy Committee (Chair)
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 service on other boards and her tenure with JPMorgan Chase and Bank One, Ms. Bammann has developed insight and wide-ranging experience in financial services and extensive experience 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, 68                
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Director since 2011
Audit Committee (Chair)
Retired Executive Vice President of The Boeing Company
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
Finance and accounting experience
 
 
Leadership of a complex, multi-disciplinary global organization
 
 
Technology, 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 extensive experience 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 Boeing’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.


12    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


Crandall C. Bowles, 69                
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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, 58                
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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 led 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 these 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 has given 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.    2017 PROXY STATEMENT    13


Todd A. Combs, 46                    
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Director since September 2016
Directors’ Risk Policy Committee
Public Responsibility Committee
Investment Officer at Berkshire Hathaway, Inc.
DIRECTOR QUALIFICATION HIGHLIGHTS
 
 
Extensive financial markets experience
 
 
Risk assessment experience
 
 
Experience with regulatory issues
Todd A. Combs is an investment officer at Berkshire Hathaway Inc., a holding company whose subsidiaries engage in a number of diverse business activities including finance, insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, retailing and services. 
Prior to joining Berkshire Hathaway in December 2010, Mr. Combs was Chief Executive Officer and Managing Member of Castle Point Capital Management, an investment partnership he founded in 2005 to manage capital for endowments, family foundations and institutions. 
Before forming Castle Point, Mr. Combs held various positions at Copper Arch Capital, Progressive Insurance and the State of Florida Banking, Securities and Finance Division.
Mr. Combs’ roles have provided him with extensive experience in financial markets, risk assessment, and regulatory matters.
Mr. Combs has served as a director of Berkshire Hathaway subsidiaries Precision Castparts Corp. since January 2016, Charter Brokerage LLC since December 2014 and Duracell Inc. since February 2016.
Mr. Combs graduated from Florida State University and received an M.B.A. from Columbia Business School.
 
James S. Crown, 63                    
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Director since 2004 and Director of Bank One Corporation from 1991 to 2004
Directors’ Risk Policy Committee
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. 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 Chairman of the Board of Trustees of the Aspen Institute, a Trustee of the Museum of Science and Industry and of the University of Chicago. He is also a member of the American Academy of Arts and Sciences and was formerly a member of the President’s Intelligence Advisory Board.
Mr. Crown graduated from Hampshire College and received a law degree from Stanford University Law School.


14    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


James Dimon, 61                    
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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; Chairman of the Business Roundtable; and 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 extensive international business experience. 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.
 
Timothy P. Flynn, 60                
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Director since 2012
Audit Committee
Public Responsibility 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
 
 
Technology, risk management and regulatory experience
Timothy P. Flynn was Chairman of KPMG International, a global professional services organization providing 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 of KPMG LLP in the U.S., 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 extensive experience in financial services and risk management.
Mr. Flynn has been a director of United Healthcare since January 2017, Alcoa Corporation since November 2016, and of Wal-Mart Stores, Inc. since 2012. He 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.


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    15


Laban P. Jackson, Jr., 74                
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Director since 2004 and Director of Bank One Corporation from 1993 to 2004
Audit Committee
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 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 has met 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.
 
Michael A. Neal, 64                    
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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
 
 
Technology, 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 extensive experience 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 board of Georgia Tech’s Sam Nunn School of International Affairs. Mr. Neal is also a trustee of Georgia Tech’s GT Foundation.
Mr. Neal graduated from the Georgia Institute of Technology.


16    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


Lee R. Raymond, 78 (Lead Independent Director)    
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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.
 
William C. Weldon, 68                    
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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 a 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 extensive experience 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. 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 Chairman of the school’s Board of Trustees.



JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    17


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 have been approved by the Board and reflect 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/corp-gov-principles, 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 the 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 appropriately allocate authority and responsibility 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.
Factors the Board may consider in reviewing its leadership structure include:
The respective responsibilities for the positions of Chairman, Lead Independent Director and CEO
 
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 the roles of Chairman, Lead Independent Director and CEO
The Firm’s circumstances 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 public 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
The Board believes it is important to retain flexibility to determine its leadership structure based on the particular composition of the Board, the individuals serving in leadership roles and the needs and opportunities of the Firm as they change over time.
Our Board, early in 2017, reviewed its leadership structure, taking into consideration the factors outlined above and feedback from shareholders, which was gathered through our shareholder outreach program, and determined that 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 and management. The Board has separated the Chairman and CEO positions in the past and may do so again in the future if it believes that doing so would be in the best interests of the Firm and its shareholders.


18    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


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’s committee structure is designed for effective and efficient board operations. All committee chairs are independent and are appointed annually by the Board. See page 20 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, adding agenda items, and reviewing 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.    2017 PROXY STATEMENT    19


COMMITTEES OF THE BOARD
 
Our Board has five principal standing committees: Audit Committee, Compensation & Management Development Committee (“CMDC”), Corporate Governance & Nominating Committee, Public Responsibility Committee and Directors’ Risk Policy Committee ("DRPC"). Committees meet regularly in conjunction with scheduled Board meetings and hold additional meetings as needed.
Each committee’s charter is posted on our website at jpmorganchase.com/committee-charters, 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. 
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, Timothy P. Flynn 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”).
Also in accordance with NYSE corporate governance listing standards and the Firm’s Corporate Governance Principles, in 2015, the Board determined that Mr. Bell’s service on the audit committees of the three other public companies for which he is a director does not impair his ability to effectively serve on the Firm’s Audit Committee. The Board completed an annual review of this determination in 2016.
Our Corporate Governance Principles provide that Board members have regular 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 24 of this proxy statement.
 
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Audit Committee
James A. Bell, Chair
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 public accounting firm
Management’s responsibilities to assure that there is in place an effective system of controls reasonably designed to (i) safeguard the assets and income of the Firm; (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
In 2016, the Audit Committee met 16 times.
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Compensation & Management Development Committee
Lee R. Raymond, Chair
Assists the Board in its oversight of:
Development of 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 review of 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 programs
In 2016, the Compensation & Management Development Committee met seven times.


20    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


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Corporate Governance & Nominating Committee
William C. Weldon, Chair
Exercises general oversight with respect to the governance of the Board, including:
The review and recommendation of proposed nominees for election to the Board
The evaluation and recommendation to the Board of corporate governance practices applicable to the Firm
The appraisal of the framework for assessing the Board’s performance and the Board’s self-evaluation
In 2016, the Corporate Governance & Nominating Committee met six times.
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Public Responsibility Committee
Crandall C. Bowles, Chair
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
In 2016, the Public Responsibility Committee met six times.

 
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Directors’ Risk Policy Committee
Linda B. Bammann, Chair
Assists the Board in its oversight of the Firm’s global risk management framework, approves the Firm’s primary risk management policies and oversees 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
In 2016, the Directors’ Risk Policy Committee met eight times.



JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    21


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 Specific Purpose Committees as appropriate to address specific issues. 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.
In 2016, the Specific Purpose Committees met 42 times in the aggregate.

 
Additional Specific Purpose Committees may be established from time to time to address other issues. The Omnibus Committee is a Specific Purpose Committee established to review matters, as needed and delegated by the Board. The Board has tasked the Omnibus Committee with overseeing the review of our consumer sales practices.
As the Firm achieves its objectives in a specific area, we expect the relevant Specific Purpose Committee will meet less frequently and eventually its work will be concluded, at which time, subject to regulatory consent where applicable, the committee will be disbanded.



22    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


BOARD COMMITTEE MEMBERSHIP AND 2016 BOARD MEETINGS
 
The following table summarizes the current membership of the Board’s principal standing committees and Specific Purpose Committees.
In 2016, the Board met 10 times. Each director attended 75% or more of the total meetings of the Board and the committees on which he or she served.
 
All of the then-current nominees were present at the annual meeting of shareholders held on May 17, 2016.
Current Board committee membership
Director
 
Audit
 
Compensation &
Management
Development
 
Corporate
Governance &
Nominating
 
Public
Responsibility
 
Directors’ Risk Policy
 
Specific Purpose Committees 1
Linda B. Bammann 2
 
 
 
 
 
 
 
 
 
Chair
 
C,E
James A. Bell 2
 
Chair
 
 
 
 
 
 
 
 
 
A
Crandall C. Bowles
 
Member
 
 
 
 
 
Chair
 
 
 
A
Stephen B. Burke
 
 
 
Member
 
Member
 
 
 
 
 
 
Todd A. Combs 2
 
 
 
 
 
 
 
Member
 
Member
 
 
James S. Crown
 
 
 
 
 
 
 
 
 
Member
 
 
James Dimon
 
 
 
 
 
 
 
 
 
 
 
 
Timothy P. Flynn 2
 
Member
 
 
 
 
 
Member
 
 
 
C
Laban P. Jackson, Jr.
 
Member
 
 
 
 
 
 
 
 
 
A,B,D,E
Michael A. Neal
 
 
 
 
 
 
 
 
 
Member
 
E
Lee R. Raymond 3
 
 
 
Chair
 
Member
 
 
 
 
 
B,D,E
William C. Weldon
 
 
 
Member
 
Chair
 
 
 
 
 
B,C,D
1 
The Board’s separately established Specific Purpose Committees in 2016 were:
A – BSA/AML(Bank Secrecy Act/Anti-Money Laundering) Compliance Committee
B – FX (Foreign Exchange)/Markets Orders Compliance Committee
C – Sworn Documents Compliance Committee
D – Trading Compliance Committee
E – Omnibus Committee
2 
In March 2017, Ms. Bammann became Chair of the Directors’ Risk Policy Committee and stepped down from the Public Responsibility Committee; Mr. Bell became Chair of the Audit Committee; Mr. Combs joined the Directors’ Risk Policy Committee and Public Responsibility Committee; and Mr. Flynn joined the Audit Committee and stepped down from the Directors’ Risk Policy Committee.
3 
Lead Independent Director



JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    23


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 its 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, the Compensation & Management Development Committee. Each committee of the Board oversees reputation risk issues within its scope of responsibility.
Directors’ Risk Policy Committee
The Committee oversees the Firm’s global risk management framework and approves the primary risk management policies of the Firm. The Committee’s responsibilities include oversight of management’s exercise of its responsibility to assess and manage the Firm’s risks, and its capital and liquidity planning and analysis. Breaches in risk appetite, liquidity issues that may have a material adverse impact on the Firm and other significant risk-related matters are escalated to the Committee.
Audit Committee
The 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 Committee assists the Board in its oversight of the Firm’s independent registered public accounting firm’s qualifications, independence and performance, and of the performance of the Firm’s Internal Audit function.
 
Compensation & Management Development Committee
The Committee 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 Committee reviews Operating Committee members’ performance against their goals, and approves their compensation awards. The Committee 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.



24    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


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 conducted by the independent directors and guided by the Lead Independent Director. Each director is expected to participate and provide feedback in multiple discussions 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. The Board’s self-assessment also considers actions taken to fulfill responsibilities under the OCC’s “Heightened Standards” for large national banks, including: requiring that management establish and implement an effective risk governance framework; providing active oversight of the risk-taking activities of the Bank and Chase Bank USA, National Association; exercising independent judgment; and providing 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, committee composition and effectiveness, leadership, agenda planning and the flow of information received from management.
The Governance Committee periodically appraises the framework for the Board and committee self-assessment processes and the allocation of responsibility among committees.


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    25


BOARD ENGAGEMENT
 
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 as a subset of one or more directors, meets throughout the year with the Firm’s senior executives, shareholders, regulators and organizations interested in our strategy, performance, governance, or business practices, and frequently engages on the topic of culture and conduct.
Shareholders
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. Shareholder feedback also helps us 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, our annual Environmental, Social and Governance (“ESG”) and Corporate Responsibility Reports, 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 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, including our strategy and financial results.
In addition, the Board has endorsed the Shareholder-Director Exchange (SDX) Protocol as a guide for effective, mutually beneficial engagement between shareholders and directors.
 
In 2016, 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 2015 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
environmental and social issues
disclosures – proxy format and content
Members of senior management participated in more than 60 investor meetings and presented at 12 investor conferences. Members of senior management also made trips to major cities 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.
Members of senior management presented at the annual Investor Day on the Firm’s strategy and financial performance and our CEO and Lead Independent Director presented to shareholders at the Firm’s annual meeting.
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.


26    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


Shareholder rights
The Firm’s By-Laws and Certificate of Incorporation provide shareholders with important rights, including:
Proxy access, which enables eligible shareholders to include their nominees for election as directors in the Firm’s proxy statement. Proxy access is described in more detail on page 101 of this proxy statement.
The ability to call a special meeting by shareholders holding at least 20% of the outstanding shares of our common stock (net of hedges).
The ability of shareholders holding at least 20% of the outstanding shares of our common stock (net of hedges) to act by written consent on terms substantially similar to the terms applicable to call special meetings.
The Firm’s By-Laws and Certificate of Incorporation are available on our website at jpmorganchase.com/governance, under the heading Governance, which is under the About Us tab.
Regulators
We are committed to transparency and responsiveness in our extensive interactions with our regulators. That means seeking to provide them with complete, accurate and timely information and maintaining an open, ongoing dialogue. Our senior leaders and our Board continued to commit significant time to meet with our regulators in 2016. Such frequent interaction helps us hear firsthand from regulators and gives us a forum for keeping them well-informed on our businesses.
During 2016, all of our independent Board members met with certain of our regulators to discuss their expectations on effective Board oversight.
Culture
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.
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 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 “How we do business” on page 31 of this proxy statement.
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/corp-gov-principles, 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 independence standards, each non-management director (Linda B. Bammann, James A. Bell, Crandall C. Bowles, Stephen B. Burke, Todd A. Combs, 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


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    27


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 Bowles 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, for which Mr. Burke is the Chief Executive Officer and a senior executive, respectively, and their subsidiaries; Berkshire Hathaway, Inc., for which Mr. Combs is an Investment Officer, and its subsidiaries; Henry Crown and Company, for which Mr. Crown is the President, and other Crown family-owned entities; and a company that has among its principal shareholders, funds managed by The Energy & Minerals Group, for which a son of Mr. Raymond is the Chief Executive Officer
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; national media placements with NBCUniversal and Comcast outlets; and purchases from Berkshire Hathaway subsidiaries of merchandising fixtures, private aviation services, press release distributions, and professional services related to the Firm’s corporate-owned aircraft
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 recommendations, the Governance Committee annually reviews the Board’s responsibilities and 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 43 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.
Annual compensation
For 2016, 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 29 of this proxy statement.
Effective for 2017, the directors’ annual cash retainer was increased to $100,000 and the annual grant of deferred stock units was increased to $250,000. The increase is intended to reflect the significant responsibility and workload required of our directors and to maintain a competitive program.
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.


28    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


The following table summarizes the 2016 annual compensation for non-management directors for service on the Boards of the Firm and of JPMorgan Chase Bank, National Association (“Bank”). There is no additional compensation paid for service on the Board of Chase Bank USA, National Association.
Compensation
Amount ($)

Board retainer
$
75,000

Lead Independent Director retainer
30,000

Audit and Risk Committee chair retainer
25,000

Audit and Risk Committee member retainer
15,000

All other committees chair retainer
15,000

Deferred stock unit grant
225,000

Bank board retainer
15,000

Bank board chair retainer
25,000

 
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 “2016 Director compensation table” below.



2016 Director compensation table
The following table shows the compensation for each non-management director in 2016.
Director
Fees earned or 
paid in cash ($)1
 
 
2016 Stock 
award ($)2
 
Other fees earned or 
paid in cash ($)3
 
Total ($)
 
Linda B. Bammann
 
$
90,000

 
 
$
225,000

 
$
34,375

 
$
349,375

James A. Bell
 
90,000

 
 
225,000

 
39,375

 
354,375

Crandall C. Bowles
 
105,000

 
 
225,000

 
39,375

 
369,375

Stephen B. Burke
 
75,000

 
 
225,000

 
9,375

 
309,375

Todd A. Combs 4
 
21,250

 
 

 
4,250

 
25,500

James S. Crown
 
115,000

 
 
225,000

 
15,000

 
355,000

Timothy P. Flynn
 
90,000

 
 
225,000

 
34,375

 
349,375

Laban P. Jackson, Jr.
 
115,000

 
 
225,000

 
192,500

 
532,500

Michael A. Neal
 
90,000

 
 
225,000

 
9,375

 
324,375

Lee R. Raymond
 
120,000

 
 
225,000

 
46,875

 
391,875

William C. Weldon
 
90,000

 
 
225,000

 
102,500

 
417,500

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 20 of this proxy statement.
2 
On January 19, 2016, 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 $57.24. The aggregate number of option awards and stock awards outstanding at December 31, 2016, for each current director is included in the “Security ownership of directors and executive officers” table on page 71 of this proxy statement under the columns “Options/SARs/Warrants exercisable within 60 days” and “Additional underlying stock units,” respectively. All such awards are vested.
3 
Includes fees paid to the non-management directors for their service on the Board of Directors of the Bank or who are members of one or more Specific Purpose Committees. Fees were prorated for those directors who joined the Bank Board during 2016. A fee of $2,500 is paid for each Specific Purpose Committee meeting attended (with the exception of the Omnibus Committee). Also includes for Mr. Jackson, $110,000 in compensation during 2016 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.
4 
Mr. Combs joined the JPMorgan Chase Board in September 2016; his retainer for Board service in 2016 was prorated.


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    29


Stock ownership: no sales, no hedging, no pledging
As stated in the Corporate Governance Principles and further described in “No Hedging/Pledging” on page 60 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 71 of this proxy statement under “Security ownership of directors and executive officers,” Mr. Crown has 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 hedged.
 
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.


30    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


How we do business
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 helps 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 and more recently, our Oversight & Control departments.
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 principles are documented in our Business Principles, Code of Conduct (“Code”) and Code of Ethics for Finance Professionals, each of which is described below.
BUSINESS PRINCIPLES
 
We have a clearly articulated set of 20 core business principles, representing four central corporate tenets for our Firm: exceptional client service; operational excellence; a commitment to integrity, fairness and responsibility; and a great team and winning culture. Today, these Business Principles, which we distributed to all Firm employees, remain at the heart of all business activities; together with our Code of Conduct, they help frame the behaviors we expect of our more than 240,000 employees globally. The full set of Business Principles is included in our report “How We Do Business” which is posted on our website at jpmorganchase.com/principles, under the heading Our Businesses, which is under the About Us tab. These principles provide the road map for how all employees at JPMorgan Chase are expected to behave and will continue to guide the Firm as we move forward.

 
CODE OF CONDUCT
 
The Code sets forth our expectation that employees will conduct themselves with integrity at all times and provides the principles that govern employee conduct with clients and customers, shareholders and one another, as well as with the markets and communities in which the Firm does business. All new hires must complete Code training shortly after their start date with the Firm. Annually all employees are required to complete Code training and reaffirm their compliance with the Code.
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.
Employees are required to speak up about misconduct and report suspected or known Code violations. 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. The Code prohibits retaliation against anyone who raises an issue or concern in good faith.
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, including termination of employment. 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.


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    31


SUPPLIER CODE OF CONDUCT
 
Suppliers are expected to have the highest standards of business conduct, integrity and adherence to the law. The Supplier Code of Conduct (“Supplier Code”) applies to our suppliers, vendors, consultants, contractors and other third parties working on behalf of the Firm, as well as the owners, officers, directors, employees and contractors of these supplier organizations and entities. The Supplier Code communicates our expectations on a range of issues, including the Firm’s Ethical Business Principles, and suppliers' responsibility to comply with laws and regulations and to operate responsibly with respect to environmental, social and human rights matters.

 
Environmental, social and governance issues
Effectively addressing environmental, social and governance (“ESG”) issues is a key part of building a great company. Doing so means having strong governance, effective risk management systems and robust controls. It includes dedicating ourselves to delivering exceptional service for our customers in a fair and transparent manner, investing in our employees’ development and fostering an inclusive work environment. It also involves considering environmental and social issues in our business and operations.
Management of these important issues is integrated into the work that we do. We are committed to providing information to our stakeholders about how we leverage our resources and capabilities to help solve pressing social, economic and environmental challenges. We communicate information about our approach to ESG issues through a variety of channels, including reports and presentations, regulatory filings, press releases and direct engagement with stakeholders. We have a dedicated ESG Information page on our website to facilitate access to the range of information and resources we provide, including information regarding our policy engagement and political participation, our commitment to diversity and inclusion and our efforts to advance sustainability in our business and operations, among other topics. In 2016, we published an ESG Report, which summarizes our efforts and performance on ESG issues that we view as among the most important to our business and stakeholders. The next edition of the ESG Report is expected to be published in Spring 2017. The ESG Report, and other related resources such as the Corporate Responsibility Report, are available on our website at jpmorganchase.com/ESG, under the heading Governance, which is under the About Us tab.


32    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT













Proposal 2:
Advisory resolution to approve
executive compensation
a2016013114proposalcoverra02.jpg




 

Approve the Firm’s compensation practices and principles and their implementation for 2016 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.
ü
RECOMMENDATION:
Vote FOR approval of this advisory resolution to approve executive compensation





JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    33


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 35–60, 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 a sharp 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 2016 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.
ü
The Board of Directors recommends a vote FOR this advisory resolution to approve executive compensation.





34    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


Compensation discussion and analysis (“CD&A”) summary
apr17roadmap1.jpg
1 
Return on tangible common equity ("ROTCE") is a non-GAAP financial measure. For a reconciliation and explanation of this non-GAAP measure, see page 102.
2 
Includes dividends and net share repurchases
3 
See page 59 for more details on clawbacks


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    35


1. How did we perform?
We continued to deliver strong multi-year financial performance while enhancing our customers' experience, strengthening the efficiency and effectiveness of our control environment, reinforcing our corporate culture, and continuing to make long-term investments in our people.
I. BUSINESS RESULTS
 
Highlights of 20161 
JPMorgan Chase delivered return on tangible common equity (“ROTCE”) of 13%, achieved record net income and record earnings per share (“EPS”), gained market share in most of our businesses, and continued to deliver sustained shareholder value over an extended period of time.
apr17banner1.jpg
Consumer & Community Banking
 
Corporate & Investment Bank
Revenue
$44.9B
 • Average deposits of $587B, up 10%, more than twice the industry average, with nearly half the growth from existing customers
 • Strong core loan growth of 20%3
 • Achieved $2.4B structural expense reduction4 as part of multi-year initiative while continuing to prudently invest
 • #1 U.S. credit card issuer with 21.5% market share on sales volume5
 • Record merchant processing volume of ~$1T
 • Largest active mobile customer base among major U.S. banks of 26.5M, up 16%
 
Revenue
$35.2B
 • Maintained #1 ranking in Global Investment Banking (“IB”) fees with 8.1% wallet share and ranked #1 in both NA and EMEA (per Dealogic)
 • Maintained #1 position in Fixed Income (12% share)6
 • Improved rankings and grew share in Equities & Prime (#2)6
 • Progressed steadily on expense target with reported expense of $19B, down 11%
 • Top 3 Custodian globally with assets under custody ("AUC") of $20.5T
Net Income
$9.7B
 
Net Income
$10.8B
ROE
18%
 
ROE
16%
 
 
 
 
 
Commercial Banking
 
Asset & Wealth Management
Revenue
$7.5B
 • Record gross investment banking revenue of $2.3B, up 5%
 • Record average loans of $179B, up 14%
 • Ranked #1 multifamily lender in U.S.
 • #1 in perceived customer satisfaction
(CFO Magazine)
 • Industry-leading credit performance  5th 
straight year of net recoveries or single digit net charge-off rate
 
Revenue
$12.0B
 • Assets under management (“AUM”) of $1.8T, including $23B of net long-term inflows
 • Record average loans of $113B, up 5%
 • Strong 5-year long-term investment performance with 79% of mutual fund AUM ranked in the 1st or 2nd quartile
 • Named #1 North America and Latin America Private Bank by Euromoney
Net Income
$2.7B
 
Net Income
$2.3B
ROE
16%
 
ROE
24%
B = billions T = trillions
1 
All comparative percentages provided in this table reflect changes from 2015 to 2016
2 
ROTCE and TBVPS are each non-GAAP financial measures. For a reconciliation and explanation of these non-GAAP measures, see page 102.
3 
The CET1 capital ratio under the Basel III Fully Phased-In capital rules is considered a key regulatory capital measure; and core loans are also considered a key performance measure. For more information, see Notes on key performance measures on page 102.
4 
Reduction from year-end 2014 through exit 2016 (4Q16 annualized); structural expense excludes non-core items, incremental investments and business growth
5 
Ranking based on 4Q16 sales volume and loans outstanding disclosures by peers (C, BAC, COF, AXP, DFS) and internal JPMorgan Chase estimates; market share based on general purpose credit card spend, which excludes private label and Commercial Card
6 
Market share and rank is based on Coalition FY16 results and reflects JPMorgan Chase’s share of Coalition's Global Industry Revenue Pool. Total industry pool is based on JPMorgan Chase's internal business structure.


36    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


Long-term Financial Performance
The Firm has generated strong ROTCE while growing its capital base over a long-term horizon. Since the beginning of 2008, the Firm has more than doubled its average tangible common equity (“TCE”) from $80 billion to $180 billion — a compound annual growth rate of 11% and an increase of $100 billion. Over the same period, the Firm has generated nearly $164 billion of cumulative net income and an average ROTCE of 12%. In 2016, the Firm generated ROTCE of 13%, flat to 2015, but on $10 billion higher average TCE and record net income. The chart below sets forth our ROTCE and average TCE over the 2008–2016 period.
STRONG ROTCE ON INCREASING CAPITAL
apr17rotcevstce.jpg
The Firm has also delivered 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 $51.44 — an 11% compound annual growth rate from December 31, 2008, through December 31, 2016. Over the same period, we also increased diluted EPS, achieving a compound annual growth rate of 21%. The chart below sets forth our TBVPS and EPS over the 2008–2016 period.
SUSTAINED GROWTH IN BOTH TBVPS AND EPS
apr17tbvpsvseps.jpg
1 
Growth rates are based on an 8-year compound annual growth rate.
Note: For a reconciliation and explanation of non-GAAP measures, see page 102.


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    37


Total Shareholder Return
We delivered a 35% TSR1 in 2016, following a TSR of 8% in 2015 and 10% in 2014, for a combined three-year TSR of 60%. The graph below shows our TSR expressed as cumulative return to shareholders since December 31, 2007. As illustrated below, every $100 invested in JPMorgan Chase as of December 31, 2007, would be valued at $246 as of December 31, 2016, significantly outperforming the financial services industry over the period, as measured by the KBW Bank Index and the S&P Financials Index.
SUSTAINED SHAREHOLDER VALUE (“TSR”)
apr17tsr3.jpg
1  
Total shareholder return assumes reinvestment of dividends
II. STRENGTHENED OUR CONTROL ENVIRONMENT AND REINFORCED OUR CULTURE
 
We believe a strong control environment is fundamental to the success of our Firm, and vital to minimizing legal, regulatory and control issues. As such, we have invested heavily over the past few years to strengthen our control environment and infrastructure, including controls around foreign exchange and referral hiring. Since 2011, our control headcount grew from 24,000 people to 43,000 people, and our total annual control spend has increased by nearly $3 billion over that same period, for a total control spend of approximately $8 billion.
The Firm devotes significant resources to protect the security of our computer systems, software, networks and other assets. We continue to make significant investments in enhancing our cyber defense capabilities and to strengthen partnerships with the appropriate government and law enforcement agencies and other businesses in order to understand the full spectrum of cybersecurity risks in the environment, to enhance defenses and to improve resiliency against cybersecurity threats.
 
Globally, thousands of employees are focused on cybersecurity — working across the Firm and with many partners to maintain our defenses and enhance our resilience to threats. Three global security operations centers monitor our systems 24 hours a day, seven days a week, in a true "follow the sun" model.
Continued focus on 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. 
In 2015 we launched a global, firmwide Culture and Conduct Program with a focus on strengthening a corporate culture that instills a greater sense of


38    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


personal accountability, reflecting our rededication to the Firm’s business principles. The Board has direct oversight of the Culture and Conduct program through the Compensation & Management Development Committee (“CMDC”). In addition, as part of the program, we provide an extensive suite of management training programs that embed culture and conduct throughout the Firm.
Culture and conduct remains a key business-driven priority for every line of business and function. Senior executives serve as Executive Sponsors of the program on behalf of the Operating Committee. The program has been operationally overseen by our Human Resources and more recently, our Oversight & Control departments.
We have embedded our business principles throughout the employee life cycle, starting with the recruiting and onboarding process and extending to training, compensation, promoting and disciplining/rewarding employees.
Actions taken in 2016 to further enhance the program included developing a firmwide conduct risk framework to identify, manage and monitor conduct risk. In addition, we enhanced several Human Resources processes throughout the employee lifecycle that impact culture and conduct, and began a pilot to more formally track our culture. In connection with these changes, we engaged in dialogues with regulators from various jurisdictions, seeking their input and feedback.
Early in 2017, the Firm created a new senior executive role, the Chief Culture and Conduct Officer. This role is designed to work closely with the Firm’s businesses and functions to develop a more holistic view of conduct risks that connects key programs and policies across the Firm.
III. ENHANCING THE CUSTOMER AND CLIENT EXPERIENCE
 
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 customers’ and clients’ experience. The following are examples of actions taken by our LOBs during 2016 to enhance our clients’ and customers’ experience:
 
Consumer & Community Banking (“CCB”) — We enhanced our customers’ digital experience by improving Chase Pay, while also developing partnerships with Apple and Samsung and signing on key merchants. New functionality was added to Chase QuickPaySM through the development and launching of a peer-to-peer ("P2P") solution with real-time funds availability. We also launched the Freedom Unlimited Card, Chase Sapphire Reserve Card, and Chase Business Quick Capital program for our Business Banking customers, providing a new online lending product with real-time approvals.
Corporate & Investment Bank (“CIB”) We made significant investments in technology to simplify and improve the customer experience and streamline operations. We developed an in-house Blockchain Center of Excellence and have actively driven the development of Blockchain technology via industry consortia. In payments, we have made progress on our multi-year strategy by expanding FX ACH from 12 to 17 currencies. Specifically for our Markets business, we are creating an end-to-end digital experience for clients to simplify their engagement with us and enable them to embrace market change. We also continued to roll out corporate QuickPaySM, a mobile and web-based solution that provides our corporate clients with additional flexibility to pay their customers.
Commercial Banking (“CB”) We continued to increase our digital capabilities with the launch of a new online platform, an improved client document exchange, and enhanced online loan capabilities. In addition, we centralized client data management to drive enhanced quality and business insights and created a program to help bankers connect clients with relevant firm thought leadership.
Asset & Wealth Management (“AWM”) — Our wealth management businesses in Chase Wealth Management and J.P. Morgan Wealth Management were brought together in order to better serve our clients across the entire wealth spectrum. We continued to invest in technology and digital wealth management initiatives to enhance our customer service and create a fully integrated and seamless digital experience for clients. In Asset Management, we launched the Let’s Solve ItSM brand campaign, sharing our expertise with clients to empower them to make better investment decisions.


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    39


IV. 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. 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.
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. Our learning programs range from entry-level to experienced skills to management, with courses tailored to individual functions, lines of business or geographic regions.
New Pay Scale
We believe that our employees work hard and deserve career and economic mobility. As such, we implemented a new pay scale for overtime-eligible, full-time and part-time U.S. employees to increase pay to a minimum of $12 per hour. This new pay scale impacts about 18,000 employees and took effect in February 2017 as part of a three-year plan in which the pay scale for overtime-eligible employees will be increased to between $12 and $16.50 per hour.
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 — an extensive suite of leadership and management learning programs which reinforces the Firm’s Business Principles (see page 31 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. The programs deliver 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. Since the launch, 20,000 managers have participated in a Leadership Edge Program. Additionally, in 2016, we opened a new facility dedicated to management and leadership learning the Pierpont Leadership Center.

 
JPMorgan Chase’s Leadership Edge is comprised of 9 core programs:
apr17leadershipedge.jpg
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 long-term, planned occurrences, such as retirement or change in roles, as well as short-term unexpected events. Similar processes, led by the relevant management team, occur within each of the Firm’s lines of business and functions.


40    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


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 the communities we serve. 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 campuses, and leveraging and executing best practices more consistently firmwide. Our Business Resource Groups (“BRG”) encourage employees to use their unique perspectives to advance the Firm’s priorities in the global marketplace. We also maintain diversity advisory councils that meet monthly to review the Firm’s progress toward our diversity objectives globally.
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
100% rating on the Corporate Equality Index (15 consecutive years) and a 100% rating on the Disability Equality Index
Programs Supporting the Advancement of Women
We have established a series of global programs that are supplemented by regional initiatives designed to help make sure that women have a platform to achieve their career goals and aspirations. Launched in 2013, Women on the Move has proven a valuable channel to hear directly from and exchange ideas with women at all levels in the Firm, as well as industry leaders and members of the communities in which we live and work. 2016 was a busy year for Women on the Move, with the commencement of a new campaign called “30-5-1” to formally recognize talented women throughout the Firm and celebrate their successes.
Originally started in 2014, the firmwide ReEntry Program seeks to attract highly accomplished individuals who have taken a voluntary career break for at least two years, have prior experience or prospective
 
interest in financial services, and wish to return to the workforce on a full-time basis. This program provides them with the support and resources needed to resume their careers, and includes opportunities for networking and mentorship.
Advancing Black Leaders
As part of our broader diversity strategy, in 2016, we introduced the Advancing Black Leaders (“ABL”) initiative. The objectives of ABL are to:
Increase the representation of black employees at the officer level;
Increase the pipeline of junior talent; and
Retain existing talent with development opportunities for continued advancement
To attract and hire, ABL partners with campus recruiting and global recruiting to increase the junior talent pipeline and the experienced talent pool for open positions. To retain and advance, ABL partners with Human Resources to identify opportunities for development and advancement for top performers.
Accessibility
As part of our ongoing commitment to our employees, in 2016, we launched the global Office of Disability Inclusion (“ODI”). ODI will provide senior leaders across the Firm with consistent standards and processes to better accommodate employees with disabilities, as well as to better support employees who care for family members with disabilities. This includes having the right tools, policies and procedures to promote an inclusive work environment. In the latter half of 2016, ODI launched an intranet site, a repository of useful information to promote an inclusive work environment, including accessibility resources, tip sheets, internal resources and more.
Programs Supporting Veterans
Since the Military and Veterans Affairs program began in 2011, the Veteran Jobs Mission led by JPMorgan Chase has collectively hired 385,000 veterans of which JPMorgan Chase has hired over 11,000 veterans; awarded more than 900 mortgage-free homes to deserving veterans at a value of over $160 million; supported 6,600 veterans, service members and military spouses in completing 9,100 career certifications through the Veterans Career Transition Program at the Institute for Veterans and Military Families (“IVMF”) which was co-founded by JPMorgan Chase; supported IVMF through a $14 million grant; and empowered veteran-owned small businesses through grants and other support.



JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    41


2. How do we assess performance and determine pay?
The CMDC uses a balanced approach to determine annual total compensation by assessing performance against four broad categories over a sustained period of time. A portion of the total compensation is delivered in the form of Performance Share Units which reinforces accountability by linking ultimate payout to pre-established absolute and relative goals.
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 discretionary approach to assess performance against four broad categories:
I.
Business results
II.
Risk and control
III.
Customers and clients
IV.
People and leadership
These performance categories consider short-, medium- and long-term goals that drive sustained shareholder value, while accounting for risk and control objectives. In addition, feedback from the Firm’s risk and control professionals is considered in assessing Operating Committee members’ performance.
To promote a proper pay-for-performance alignment, the CMDC does not assign relative weightings to these categories. The performance of Operating Committee members against these categories is discussed in detail on pages 47–53 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 performance review process includes the following key features:
The Board reviews Firm and LOB strategy and business plans
The CEO and other Operating Committee members establish individual performance priorities, which are reviewed with the Board
Throughout the year, the Board and CMDC review Firm, LOB, function, and individual performance, as appropriate
All LOBs and regions review meaningful risk and control issues related to the LOB or function on a quarterly basis, as well as firmwide issues that may have potential group or individual accountability. For HR Control Forum issues that may impact an OC member, the issues will be raised by the General Counsel and Head of Human Resources to the CEO to be considered in the Operating Committee member's performance reviews. The CEO (with the General Counsel and Head of Human Resources as appropriate) will submit final recommendations for compensation or other impact to the CMDC for approval
Feedback from the Firm’s risk & control professionals
In parallel with the performance review process, the CMDC engages in regular discussions with the CEO and the Head 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.


42    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


EVALUATING MARKET PRACTICES
 
In order to effectively attract, properly motivate and retain our senior executives, the CMDC periodically 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:
 
ü
Financial services industry
ü
Industry leader
 
 
ü
Significant global presence
ü
Comparable size
 
 
ü
Global iconic brand
ü
Recruits top talent
 
The table below sets forth the composition of our peer groups.
Financial Services Peers
 
General Industry Peers
American Express
 
3M
CVS
Oracle
Verizon
Bank of America
 
AT&T
Exxon Mobil
Pepsico
Wal-Mart
Citigroup
 
Boeing
General Electric
Pfizer
Walt Disney
Goldman Sachs
 
Chevron
IBM
Procter & Gamble
 
Morgan Stanley
 
Coca Cola
Johnson & Johnson
Time Warner
 
Wells Fargo
 
Comcast
Merck
United Technologies
 
The CMDC references other financial firms for comparison, including Barclays, BNY Mellon, BlackRock, Capital One Financial, Credit Suisse, Deutsche Bank, HSBC and UBS. From time to time, the CMDC may also reference other non-financial firms for comparison.
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.
apr17peers.jpg
1  
Source: Annual reports; revenue reflects reported basis
2  
Market capitalization is based on stock price multiplied by shares outstanding as of fiscal year-end 2016


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    43


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, based on four broad categories (see pages 47–53)
Value of the position to the organization and shareholders over time (i.e., “value of seat”)
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 CMDC’s assessment of 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 pay mix between annual cash incentives and long-term equity (including PSUs and RSUs). Consistent with last year, the CMDC deferred approximately 80% of Mr. Dimon's 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. The CMDC has established a different pay mix for Mr. Pinto (including a fixed allowance) due to local E.U. and U.K. regulatory rules pertaining to Identified Staff under the Capital Requirements Directive IV and Senior Managers under the Individual Accountability Regime, respectively. For further details on Mr. Pinto’s pay mix, see page 52.
FORMULA USED IN DETERMINING NUMBER OF PSUs EARNED AT VESTING
 
The CMDC utilizes both a balanced discretionary approach and a formula for purposes of determining compensation levels for the Operating Committee. 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. Additional details on the PSUs are provided on page 46 of this proxy statement.



44    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


3. How did we pay our CEO and other NEOs?
CEO pay is strongly aligned to the Firm’s short-, medium- and long-term performance, with approximately 80% of his variable pay deferred into equity, of which 100% is in at-risk PSUs. Pay for other NEOs is also closely tied to Firm and LOB sustained performance, with a majority of their variable pay deferred into equity, of which 50% is in PSUs.
PAY ELEMENTS
 
The table below provides a summary for each element of compensation for the 2016 performance year.
Elements1
% of Variable
Purpose
Description
Vesting
Subject to Clawback2
CEO
NEOs
 Fixed
 Salary
N/A
N/A
• Fixed portion of total pay that enables us to attract and retain talent
• Only fixed source of cash compensation
• Base salary of OC members has remained flat since 2011
• N/A

 
 Variable
 Cash
 Bonus
~20%
40%
• Provides a competitive annual cash incentive opportunity


• Payout determined and rewarded after end of performance year
• Represents less than half of OC members’ variable compensation
• Immediately vested, subject to bonus recoupment provision

ü
 RSUs
0%
30%
• RSUs serve as a strong retention tool
• PSUs reinforce accountability by linking objective targets to a formulaically determined payout
• PSUs and RSUs provide a competitive mix of time-based and performance-based equity awards
• Both PSUs and RSUs are aligned with long-term shareholder interests as payout value fluctuates up or down based on stock price performance
• Both RSUs and PSUs are subject to protection-based vesting
• Both RSUs and PSUs are subject to the retention/ownership policy applicable to all OC members
• RSUs and PSUs do not carry voting rights
• Dividend equivalents are paid on the RSUs at the time actual dividends are paid on JPMorgan Chase common stock
• Generally vest over three years — 50% after two years, with the remaining 50% after three years

ü
 PSUs

~80%
30%
• Payout based on absolute ROTCE and relative ROTCE
• Performance goals remain the same for entire award term
• Payout levels range from 0–150%
• PSUs are settled in shares of common stock
• Dividends accrue and are paid out in shares of common stock at vesting based on units earned
• See page 46 for additional details on program
• 3-year performance period
• Award cliff vests after the end of the 3-year performance period, with shares subject to an additional 2-year hold (for a combined period of approximately 5 years)

ü
apr17psuoverview.jpg
1  
Due to local regulations, Mr. Pinto receives a fixed allowance, did not receive a cash bonus, and both his RSUs and PSUs are subject to (a) extended seven year vesting (commencing ratably on the third year anniversary of grant); (b) additional U.K. clawback/recovery provisions; and (c) a minimum six-month hold after each vesting. In addition, as it relates to Mr. Pinto’s PSUs, the CMDC may use its discretion, if appropriate, to downward adjust payout (to 0%) based on his performance against qualitative criteria and priorities during the performance period. U.K. regulators review compensation structures for Identified Staff annually and may request future adjustments.
2  
Additional information on recovery and clawback provisions is provided on page 59 of this proxy statement.


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    45


PERFORMANCE SHARE UNIT PROGRAM
 
The PSU program further strengthens long-term shareholder alignment by linking ultimate payout to pre-established absolute and relative goals based on a formula, subject to risk and control features. Taking into consideration positive shareholder feedback, the CMDC determined that key features of the PSU award granted in January 2017 should remain unchanged from those of the prior year’s award, as described in further detail below.
Plan Feature
Performance Year 2016 PSU Award 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 use of its equity, 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 is used by the Firm as well as investors and analysts to assess our performance and that of our competitors.
Payout Grid

 • Payout under the PSU plan will be calculated annually based on absolute and relative ROTCE per the formulaic payout grid below. Absolute and relative performance metrics help promote a fair outcome for both shareholders and participants. In January 2017, the CMDC set maximum payout at an ROTCE level of 14% (or greater).
apr17absoluterelativerotce.jpg
Determining Absolute
and Relative Performance Goals
 • In setting the 14% absolute ROTCE goal, the CMDC reviewed the Firm’s historical performance and a reasonable range of net income and capital outcomes over the next three years. These outcomes were considered in the context of (among other things) regulatory capital requirements, annual stress tests, interest rates and the economic environment, all of which affect the range of ROTCE outcomes in the medium term.
 • Specifically, the CMDC recognized that the Firm earned record net income in each of the last three years, which resulted in ROTCE of 13% in each year. As tangible common equity in the denominator compounds with retained earnings, continually higher net income in the numerator is needed each year to maintain 13% ROTCE, and even higher record net income would be required to increase ROTCE to 14%. For illustrative purposes, in 2016, the Firm would have needed to generate over $2 billion of additional net income in order to achieve 14% ROTCE.
 • Consistent with our pay-for-performance philosophy, in setting the relative ROTCE performance goals, the CMDC determined that payout above target for previously granted PSU awards should be limited to instances in which we outperform our peers, with below target payout occurring in instances of under-performance. Achievement of median performance results in target payout (100%) consistent with peer practices, and what the CMDC believes is a fair and balanced outcome. Payout of 150% is limited to outstanding relative performance, which the CDMC determined to be in the top 25% of peers (or top 3).
PSU Performance Companies
 • Criteria: close competitors with business activities that overlap with at least 30% of our revenue mix
 • Bank of America, Barclays, Capital One Financial, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Morgan Stanley, UBS, and Wells Fargo
Narrow Adjustment Provision
 • The CMDC may only make adjustments (up or down) to maintain the intended economics of the award in light of changed circumstances (e.g., change in accounting rules/policies or changes in capital structure). Mr. Pinto is also subject to additional downward adjustments (see footnote 1 on page 45).
2015 Award
(Prior Year)
 • In 2016, we generated 13% ROTCE on an absolute basis and achieved 1st Quartile performance on a relative basis, which results in an expected future payout of 150% for 1/3rd of the units.
1  
ROTCE is calculated for each year in the Performance Period using unadjusted reported data as set forth in public financial disclosures.


46    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


MR. DIMON’S 2016 COMPENSATION IS ALIGNED WITH HIS MULTI-YEAR PERFORMANCE
 
In assessing Mr. Dimon's performance and determining his pay, the Board considered his achievements against business results, risk and control, customers and clients, and people and leadership. The Board took into account Mr. Dimon's performance in leading the Firm over a sustained period of time, including strong performance in 2016, during which time the Firm achieved record net income and record EPS, while generating strong ROTCE1 results of 13% on average tangible common equity of $180 billion (vs. $170 billion in 2015). The Firm achieved these results against the backdrop of a challenging revenue environment, while hitting expense and capital targets, gaining market share in most of our businesses, strengthening our risk and control environment (including our Culture and Conduct program) and continuing to invest in our people.
The Board considered the Firm’s financial performance since the end of the financial crisis (i.e., most recent 7 years):
Strong annual ROTCE1 on increasing levels of capital (13% or higher ROTCE1 in 6 of the last 7 years);
Record Net Income (6 of the last 7 years);
Record EPS (5 of the last 7 years);
Strong TBVPS1 growth rate of 10% (compounded annually over the last 7 years); and
Returned $61 billion to shareholders (over the last 7 years)
The Board also recognized that Mr. Dimon deployed substantial resources to fortify our control environment, which has culminated in a control infrastructure that better permeates across and deeply within our businesses. In doing so, he has fostered a culture that regards the Risk and Control agenda as a top priority that seeks continuous improvement, all reflecting the Firm’s ability to successfully adapt to an evolving and challenging regulatory landscape.
In addition, Mr. Dimon has guided the Firm’s focus on creating and enhancing services that add value to our customers through product innovation, cutting edge technologies, and simplified processes. Furthermore, Mr. Dimon’s stewardship over the Firm’s People and Leadership agenda, has led to a highly effective management development program (Leadership Edge), a robust pipeline of leaders across the organization and a diversity strategy that attracts, motivates, and retains top talent.
In addition to assessing Mr. Dimon’s performance, the CMDC and independent members of our full Board also considered the CEO pay of our financial services and general industry peers over multiple years as a reference, and concluded that increasing Mr. Dimon's 2016 compensation was appropriate, particularly in light of the Firm's strong absolute and relative performance over multiple years. After considering these factors, the Board awarded Mr. Dimon $28 million ($27 million in 2015). The exhibit below illustrates Mr. Dimon’s compensation relative to our financial services peers (based on three-year average total compensation; and also expressed as a percentage of net income).
Prior 3-Year Average CEO Total Compensation and % of Profits Paid to CEOs (2013–2015) 2,3 
apr17ceopercentprofits.jpg
1
ROTCE and TBVPS are each non-GAAP financial measures. For a reconciliation and explanation of these non-GAAP measures, see page 102
2  
Total compensation is comprised of base salary, cash bonus paid, and long-term incentive compensation (target value) in connection with the performance year, which may be different from amounts reported in Summary Compensation Table. The most recently used compensation data is 2015 since not all of our Financial Services peers will have filed proxy statements (with 2016 compensation data) before the preparation of our own proxy statement. Source: Proxy statements.
3  
Percentage of profits paid is equal to three-year average CEO compensation divided by three-year average net income. Source: 2014-2016 Proxy statements.


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    47


apr17p4p2.jpg
1
ROTCE and TBVPS are each non-GAAP financial measures. For a reconciliation and explanation of these non-GAAP measures, see page 102.
2
Despite record net income and 15% ROTCE, the Board exercised discretion relating to risk and control and reduced Mr. Dimon's pay in 2012.




48    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


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 2016 and related compensation are provided below.
MR. DIMON’S PAY-FOR-PERFORMANCE
2016 Priorities and Performance
 • Mr. Dimon's strategic priorities were to continue to invest in innovation to better serve our clients, continue down the path of having fortress controls, reinforce a strong sense of personal accountability and a sound culture, position the Firm as the leader of wholesale and retail payments, capture the full potential of our data assets, and attract and develop the best diverse talent.
 • For 2016, the Firm achieved strong ROTCE with record net income and record EPS. We returned $15.0 billion to share-holders in the form of dividends and net share repurchases.
 • Mr. Dimon continued to invest significant resources to provide the necessary infrastructure for our control agenda and has continued to develop our outstanding management team and to enhance our diversity programs, with the Firm being recognized as a top employer for women, blacks, hispanics, LGBT and veterans.
Mr. Dimon was awarded total compensation of $28.0 million, up from $27.0 million in 2015.
 
2016 Compensation
apr17paymixdimon1.jpg
~80% of variable compensation awarded in PSUs
SUMMARY OF 2016 KEY ACHIEVEMENTS
Business Results
 
Risk and Control
 • Strong ROTCE1 of 13%, record net income of $24.7 billion and record EPS of $6.19, and TBVPS1 growth of 7%, reflecting a continued focus on efficiency and hitting our expense and capital targets
 • Maintained a fortress balance sheet, increasing our Basel III Advanced Fully Phased-In CET1 capital ratio by 60 bps to 12.2%
 • $2.4 trillion of credit and capital raised in 2016 illustrating the strength and depth of our businesses
 
 • Continued to strengthen the global Culture and Conduct program by developing a formalized firmwide conduct risk framework and further embedded our business principles throughout the employee lifecycle
 • Continued to improve the efficiency and effectiveness of the Firm’s risk and control agenda, including the management of conduct risk, and numerous initiatives to address regulatory commitments
Customers and Clients
 
People and Leadership
 • Maintained or improved first-class franchises:
— CCB had ~26.5 million active mobile customers by the end of 2016, up 16% year-over-year
— CIB participated in seven of the top ten fee-generating IB transactions in 2016 (per Dealogic)
— CB ranked #1 multifamily lender in the US
— AWM named #1 Private Bank in the World by Global Finance Magazine
 • Continued to support our communities, including a $20 million pledge to revitalize neighborhoods in five cities
 
 • Launched the Advancing Black Leaders initiative with the objective of better attracting external black talent, while retaining and developing our internal talent
 • Continued investment in programs and initiatives that support the advancement of women, and which reinforce our employer of choice reputation in the marketplace
 • Worked closely with the CMDC and the Board on Operating Committee members’ development and succession planning
 
ROTCE and TBVPS are each non-GAAP financial measures. For a reconciliation and explanation of these non-GAAP measures, see page 102


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    49


MARIANNE LAKE: CHIEF FINANCIAL OFFICER
Ms. Lake was appointed Chief Financial Officer on January 1, 2013. She previously served as the CFO of the 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 2016 and related compensation are provided below.
MS. LAKE’S PAY-FOR-PERFORMANCE
 
2016 Priorities and Performance
 • Ms. Lake’s priorities were to continue to progress the strategic vision of our Global Finance & Business Management organization; optimize our performance with a focus on maximizing risk adjusted return on capital while complying with all regulatory constraints; enhance our risk and control environment; continue to actively engage with our diverse shareholder base; strengthen our relationship with regulators; and lead certain people initiatives, including further solidifying Global Finance’s succession bench and executing targeted mobility moves for senior talent.
 • In determining Ms. Lake’s compensation, the CMDC considered her consistently strong performance relative to the pay and performance of other high caliber CFOs and her key accomplishments highlighted below.
 • Ms. Lake was awarded total compensation of $12.5 million, up from $11.0 million in 2015.
 
 
 
 
 
 
 
 
 
 
2016 Compensation
apr17paymixlake.jpg
SUMMARY OF 2016 KEY ACHIEVEMENTS
Business Results
 
Risk and Control
 • Established a multi-metric based equity capital allocation framework which is dynamic and aligns incentives with the Firm’s multiple binding constraints
 • Rolled out new firmwide platform for regulatory capital to drive greater organizational efficiency
 • Led successful submission of the Comprehensive Capital Analysis and Review (“CCAR”)
 • Enhanced the Global Finance & Business Management organization, including introduction of 14 firmwide reporting controller roles aligned to specific financial instruments and disclosures
 
 • Led successful 2016 Resolution Submission — adequately remediated identified deficiencies in the 2015 Resolution Plan
 • Developed financial reporting application that will materially improve reporting and analytics in support of regulatory reports
 • Expanded Central Challenger mandate into Recovery and Resolution and Capital Management Policy Review
 • Developed firmwide CCAR CFO attestation program
 • Established monthly Global Tax Control and Oversight forum to address tax related risks and issues across the businesses and operations
Customers and Clients
 
People and Leadership
 • Developed more robust stakeholder engagement around Environmental, Social and Governance (“ESG”) matters with shareholders, clients and other key stakeholders
 • Continued focus on shareholder outreach through multiple channels — including conferences, speaking engagements, group meetings and investor road shows
 • Continued focus on relationship with regulators through active engagement and regular dialogue
 
• Championed a number of firmwide diversity initiatives:
— Sponsored six fellows in Firm’s ReEntry Program
— Senior Sponsor of Women on the Move and Spelman
College Alumni programs
— Supported multiple recruiting networking events
yielding hundreds of diverse pipeline candidates
• Executed on multiple talent initiatives including
creation of a global training forum and expansion of the
Global Finance analyst program


50    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


MARY CALLAHAN ERDOES: CEO ASSET & WEALTH MANAGEMENT
Ms. Erdoes was appointed Chief Executive Officer of Asset & Wealth Management (“AWM”) in September 2009. She previously served as CEO of the J.P. Morgan Private Bank from 2005 to 2009. Ms. Erdoes’ key achievements in 2016 and related compensation are provided below.
MS. ERDOES’ PAY-FOR-PERFORMANCE
2016 Priorities and Performance
 • Ms. Erdoes’ priorities were to deliver strong financial results, including driving efficiencies, and to provide clients with superior investment performance, while continuing to invest in talent, innovate through technology, reinforce controls and maintain a strong culture to position AWM for continued success.
 • In 2016, Ms. Erdoes led the AWM business to deliver strong financial performance in a challenging market environment, while maintaining AWM’s market-leading position. Under her leadership, AWM continued its outstanding long-term investment performance through innovative solutions for clients, aligning with industry trends and maintaining its fiduciary culture.
 • Ms. Erdoes was awarded total compensation of $19.0 million, up from $18.0 million in 2015.
 
2016 Compensation
apr17paymixother1.jpg
SUMMARY OF 2016 KEY ACHIEVEMENTS
Business Results
 
Risk and Control
Achieved strong results despite a challenging environment:
Net income of $2.3 billion on revenue of $12.0 billion with 24% ROE and 29% pretax margin
Long-term assets under management (“AUM”) of $1.3 trillion and client assets of $2.5 trillion
Net long-term AUM inflows of $23.0 billion and long-term inflows in client assets of $39.0 billion
 
Continued to invest significant resources towards and to focus on a strong controls infrastructure, including:
Prioritized all high risk clients’ Know Your Customer ("KYC") assessments in Wealth Management to enhance our compliance with BSA/USA PATRIOT Act
Cross Border Activities policy adopted a consistent global control framework
Supported the expansion of Independent Risk Management practices to address evolving business needs and regulatory expectations
Customers and Clients
 
People and Leadership
Continued to deliver excellent client experience through outstanding performance:
79% of mutual fund AUM ranked in the 1st or 2nd quartile over five years
Broadened Wealth Management focus to capture opportunities across AWM's and CCB's entire U.S. wealth spectrum in a more seamless manner
Named #1 North America and Latin America Private Bank by Euromoney
Named Asset Management Company of the Year in Asia by The Asset for the 8th straight year
 
Executed on several key talent initiatives:
Effective retention, including 95% of senior top talent
Established ASCEND sponsorship program focusing on retaining and promoting top women and ethnically diverse talent
Enhanced our recruiting strategy by introducing new innovative technologies such as on demand digital interviewing for external hires, and launching a Mobility site to increase internal transfers and opportunity awareness


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    51


DANIEL PINTO: CEO CORPORATE & INVESTMENT BANK
Mr. Pinto was appointed Chief Executive Officer of 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 2016 and related compensation are provided below.
MR. PINTO’S PAY-FOR-PERFORMANCE
2016 Priorities and Performance
 • Mr. Pinto’s priorities were to continue to deliver strong financial performance; maintain leadership positions across the full suite of CIB products, remain focused on business simplification and efficiency, and ensure that CIB remains on the forefront of technology innovation and emerging trends.
 • Mr. Pinto delivered strong results in a dynamic environment; maintained or improved CIB’s market-leading positions in most of the key business segments; exited businesses with non-core clients, made progress on the multi-year cost reduction targets and enhanced the CIB's control environment, including with respect to referral hiring.
 • Mr. Pinto was awarded total compensation of $19.0 million, up from $18.5 million in 2015.
 
2016 Compensation
apr17paymixpinto1.jpg
For Mr. Pinto, the terms and composition of his compensation reflect the
requirements of local U.K. regulations (see page 63 for additional details).
SUMMARY OF 2016 KEY ACHIEVEMENTS
Business Results
 
Risk and Control
• Net Income of $10.8 billion on revenue of $35.2 billion with 16% return on equity (“ROE”)
• Grew Global IB fee share, while the industry wallet declined  
• Total Markets and Fixed Income markets revenues of $21.0 billion (up 15%) and $15.3 billion (up 21%), respectively
Continued focus on cost reduction, with reported expense of $19.0 billion, down 11% year-over-year
Executed on multi-year transformation program to improve scalability and operating leverage
 
• Continued to drive the Culture and Conduct program for CIB and EMEA, incorporating lessons learned from both firmwide and industry events
• Implemented strategic solution for Front Office Supervisors (“FOS”) to monitor conduct risk, including surveillance metrics and alerts
• Created a payments control program to assess and mitigate operational payment risk on a prioritized basis
• Made significant progress on improvement and stabilization of key technology platforms for Treasury Services and Custody & Fund Services
Customers and Clients
 
People and Leadership
• #1 in Global IB fees with 8.1% wallet share1
— #1 in IB fees in North America and EMEA1
• CIB participated in seven of the top ten fee-generating IB transactions in 20161
• #1 in Total Markets with 11.4% share2
— #1 in Fixed Income and improved Equities rank to #22
— #1 in Prime Brokerage by Institutional Investor
 
Continued focus on developing CIB’s existing talent, while positioning CIB as an employer of choice:
• Supported numerous diversity initiatives, including 2nd annual ReEntry program and Adelante, a Business Resource Group empowering Hispanic and Latino employees
• Rotated employees and created new or expanded roles to accelerate development of top talent
• Continued focus on initiatives for Analysts and Associates to enhance work-life balance and retention
1
Per Dealogic
2 
See footnote 6 on page 36


52    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


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 and corporate 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 and foreign exchange risk through the Treasury and the Chief Investment Office. He also manages several strategic functions including Global Technology, Chief Administrative Office, Corporate Strategy, Global Real Estate, Oversight & Control, Global Security & Investigations, Military & Veterans Affairs, Regulatory Affairs, Mortgage Capital Markets, Private Investments, Intelligent Solutions and Global Services. Mr. Zames’ key achievements in 2016 and related compensation are provided below.
MR. ZAMES’ PAY-FOR-PERFORMANCE
 
2016 Priorities and Performance
 • Mr. Zames’ 2016 priorities were to effectively manage a broad portfolio of firmwide functions and to deliver firmwide strategic initiatives; execute and drive enhancements in the Firm’s interest rate and liquidity risk frameworks; continue to drive the transformation of the technology organization and fortify our cybersecurity capabilities; leverage big data technologies to optimize use of data and drive cost efficiencies; enhance culture and conduct programs; firmwide resource and expense optimization; and remediation of key regulatory issues.
 • The CMDC recognized Mr. Zames’ significant progress (highlighted below) against these priorities, the breadth of his role in the Firm and his compensation relative to comparable executives and other NEOs.
• Mr. Zames was awarded total compensation of $19.0 million, up from $18.5 million in 2015.
 
 
 
2016 Compensation
apr17paymixother1.jpg
SUMMARY OF 2016 KEY ACHIEVEMENTS
Business Results
 
Risk and Control
Strengthened Firm’s balance sheet and liquidity position; drove significant body of work related to our 2016 Resolution submission
Developed debt optimization framework and introduced Total Loss Absorbing Capacity (“TLAC”) efficient callable debt structure to the market
Further progressed intraday liquidity program by leveraging technology and big data capabilities
Continued to drive significant and sustainable firmwide expense savings through programs like Organizational Effectiveness and noncompensation initiatives

 
Fortified the Firm's defenses: cybersecurity, global resiliency, physical security, and control landscape
Established higher standards around managing market conduct risk; implemented an enhanced surveillance operating model
Successfully transitioned Compliance to Global Risk Management
Continued progress on a number of firmwide control programs including AML/BSA, cyber security and access administration
Customers and Clients
 
People and Leadership
Continued to drive optimization of the Firm's technology organization through modernizing software delivery, rationalizing applications, infrastructure optimization efforts and workforce evolution
 Advanced hybrid cloud strategy improving agility and scalability for developer community
Drove innovation across the firm by leveraging big data and analytic capabilities
Improved security of Firm’s data through enhanced loss protection controls and led first-of-its-kind cross-industry cybersecurity exercise
 
Co-Sponsor of the Firm's Culture and Conduct program which sets the tone of what’s expected from our employees
Continued to strengthen the Firm’s commitment to veterans through work with numerous nonprofit organizations, which contributed to our ability to attract and hire veterans
Continued to strengthen leadership bench through focused talent and succession planning, sponsorship of Leadership Edge training, and execution of COO Leaders Program
Seamlessly reorganized Chief Administration Office to split out technology and provided expanded roles for a number of key talent


JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    53


2016 NAMED EXECUTIVE OFFICER COMPENSATION
 
The table below sets forth compensation awarded to our NEOs in connection with 2016, including salary and performance-based compensation paid in 2017 for 2016 performance.
 
 
ANNUAL COMPENSATION (FOR PERFORMANCE YEAR)
 
 
 
 
 
Name and
principal position
 
 
INCENTIVE COMPENSATION
 
Year
Salary
Cash
RSUs
PSUs1
Total
 
 
 
 
 
 
 
James Dimon
2016
$
1,500,000

$
5,000,000

$

$
21,500,000

$
28,000,000

Chairman and Chief
Executive Officer
2015
1,500,000

5,000,000


20,500,000

27,000,000

2014
1,500,000

7,400,000

11,100,000


20,000,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marianne Lake
2016
750,000

4,700,000

3,525,000

3,525,000

12,500,000

Chief Financial Officer
2015
750,000

4,100,000

3,075,000

3,075,000

11,000,000

 
2014
750,000

3,700,000

5,550,000


10,000,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mary Callahan Erdoes
2016
750,000

7,300,000

5,475,000

5,475,000

19,000,000

Chief Executive Officer Asset & Wealth Management
2015
750,000

6,900,000

5,175,000

5,175,000

18,000,000

2014
750,000

6,300,000

9,450,000


16,500,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Daniel Pinto2
2016
8,303,234


5,348,383

5,348,383

19,000,000

Chief Executive Officer Corporate &
Investment Bank
2015
6,884,250


5,807,875

5,807,875

18,500,000

2014
7,415,796


9,584,204


17,000,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Matthew Zames
2016
750,000

7,300,000

5,475,000

5,475,000

19,000,000

Chief Operating Officer
2015
750,000

7,100,000

5,325,000

5,325,000

18,500,000

2014
750,000

6,500,000

9,750,000


17,000,000

 
 
 
 
 
 
 
1 
Reflects the grant date fair value. Actual amounts received by NEOs upon vest may range from 0% to 150% of the target shares (excluding accrued dividends), depending upon Firm performance.
2 
Mr. Pinto’s fixed allowance, which is paid in British pound sterling (GBP), was increased in 2016 to $7,635,000 in connection with a change to denominate in U.S. dollars (USD) (it was previously denominated in GBP), and in light of his increased responsibilities as a Senior Manager pursuant to the U.K. Individual Accountability Regime. His salary of £475,000 is unchanged from 2015 to 2016. Additional information on the composition of Mr. Pinto’s compensation is on page 63 of this proxy statement.
Interpreting 2016 NEO compensation
The table above is presented to show how the CMDC and Board viewed compensation awarded for 2016. It differs from how compensation is reported in the Summary Compensation Table (“SCT”) on page 62, 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 2017 for 2016 performance is shown as 2016 compensation. The table above treats equity awards (restricted stock units and performance share units) similarly, so that equity awards granted in 2017 for 2016 performance is shown as 2016 compensation. The SCT reports the value of equity awards in the year in which they are made. As a result, awards granted in 2016 for 2015 performance are shown in the SCT as 2016 compensation.
2.
The SCT reports the change in pension value and nonqualified deferred compensation and all other compensation. These amounts are not shown above.


54    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


4. What are our pay practices?
We believe our compensation philosophy promotes an equitable and well-governed approach to compensation, including pay practices that attract and retain top talent, are responsive to and aligned with shareholders, and encourage a shared success culture.
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 our compensation philosophy.
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 that 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 should 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 nonperformance 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  Strong corporate governance is fostered by independent Board oversight of our executive compensation program, including defining the Firm’s compensation philosophy, reviewing and approving the Firm’s overall incentive compensation pools, and approving compensation for our Operating Committee, including the terms of compensation awards; CEO compensation is subject to Board ratification.
Ÿ  We have a rigorous process in place to review risk and control issues at the Firm, line of business, function, and region level, which can and has led to impacts on compensation pools as well as reductions in compensation at the individual level, in addition to other employee actions.
Transparency with shareholders
 
Ÿ  Transparency to shareholders regarding 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.





JPMORGAN CHASE & CO.    2017 PROXY STATEMENT    55


apr17paypractices1.jpg
1
Except for select individuals at hire, for one year.
2  
We do not provide club dues, tax gross-ups for benefits, or special medical benefits. For further information on all other compensation, see footnotes 6, 7, and 9 on pages 62-63.
3  
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).
4
Example assumes individual has achieved minimum ownership requirement of 300K shares, otherwise must retain 75% of shares vesting (37.5K).


56    JPMORGAN CHASE & CO.    2017 PROXY STATEMENT


5. How do we address risk and control?
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.
GOVERNANCE PROCESS
 
The CMDC oversees our firmwide compensation programs. Key responsibilities of the CMDC relating to compensation include:
Approving 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)
Reviewing compensation for certain employees who are material risk-takers identified under Federal Reserve standards (“Tier 1”) and/or European Union standards (“Identified Staff”) — a group we refer to as “Designated Employees”
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”) in support of compliance with 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, function and regional levels (“HR Control Forums”), the outcomes of which are factored into our compensation decisions.
 
INTEGRATING RISK WITH COMPENSATION
 
The CMDC holds an annual joint session with the Directors’ Risk Policy Committee (“DRPC”) to review firmwide HR and compensation practices, including: