JPMorgan Chase's (JPM) CEO Jamie Dimon Hosts 2016 Annual Meeting of Shareholders (Transcript)

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JPMorgan Chase & Company (NYSE:JPM) 2016 Annual Meeting of Shareholders May 17, 2016 11:00 AM ET


Jamie Dimon - Chairman & CEO

Stacey Friedman - General Counsel

Steve Cutler - Former General Counsel

Linda Bammann - Board of Director

James Bell - Board of Director

Crandall Bowles - Board of Director

Stephen Burke - Board of Director

Jim Crown - Board of Director

Tim Flynn - Board of Director

Lab Jackson - Board of Director

Michael Neal - Board of Director

Lee Raymond - Board of Director

Bill Weldon - Board of Director

Kathryn Kaminski - PricewaterhouseCoopers, Audit Partner

Bartlett Naylor - Public Citizen

Vineeta Anand - AFL-CIO Reserve Fund

Jamie Dimon

Good morning, ladies and gentlemen. It's 10:00 AM and I am pleased to call the ordering Annual Meeting to Shareholders of JPMorgan Chase & Company. I'm Jamie Dimon Chairman of the Board and Chief Executive Officer of JPMorgan Chase and Chairman of this meeting. The video you just saw shows our extensive commitment to the city and the people of New Orleans and in the audience today are number of our employees from New Orleans area, I'd like to thank all of them, for all the things you do for your community, it's really deeply appreciated so a special welcome.

With me today is Stacey Friedman our new General Counsel and our old General Counsel is over there too and we're pleased to have him still with us, but he is happy that she stand up here as Secretary of this meeting and she will lead us through the agenda. Stacey?

Stacey Friedman

Thank you, Jamie. Thank you everybody for coming today. I want to add my welcome to everybody who is here and thank New Orleans for having us. Hopefully some of you are not just shareholders you're also customers, we have folks with us here today from the executive office. Larry Swedroe are you somewhere in the back right there, if you have any questions or you need anything about the services that we offer or questions you have about the way you interact with us today, please find Larry he's got a team with us out front they'll be here after the meeting and are available to meet with you.

As a reminder just to get through a few formalities, no personal devices cells phones, other electronic equipments, mobile devices, record, photograph or videos of the meeting that's prohibited.

Let’s turn to the order of the business today. I have the affidavit of mailing of the notice for the meeting, the proxy statement, the form of the proxy and the annual report. The shareholder list is available for inspection and representatives of IVS Associates Inc. has been appointed to serve as inspectors of the election. The meeting is properly convened, the quorum is present and the proposed resolution set forth in the proxy statement will be filed as part of these proceedings. It is 10:03 AM and the polls are now open and will remain open until we announce that they have closed. We received proxies up until just before the beginning of the meeting representing about 87.9 outstanding shares eligible to vote and these have been voted in accordance with the shareholders wishes. If there are shareholders here today who wish, who have not yet submitted their proxies and would like to do so, we’ll collect them after all the proposals and the Q&A and once they're submitted they will be reflected in the final vote.

As a reminder, today's remarks may contain forward-looking statements. Please refer to agenda our Annual Report filed on Form 10-K with the SEC and our disclaimer regarding such statements.

That completes the necessities and the formalities. Jamie, he will next introduce the Directors and comment on the state of the Company.

Jamie Dimon

So I'd like to first recognize our Directors I’d like to ask these Directors to stand when I introduce you please hold you applause after all directors are introduced. Your directors are Linda Bammann, James Bell, Crandall Bowles, Stephen Burke, Jimmy Crown, Tim Flynn, Lab Jackson, Michael Neal, Lee Raymond and Bill Weldon.

Thank you. And I am proud to tell you that the dedication and commitment of your directors plays a huge part in making this a great company. In addition to the Directors we also have with us today Kathryn Kaminski our audit partner from PricewaterhouseCoopers. Kathryn thank you being here, why don’t you stand-up just so we know you are there.

So we're pleased to be in New Orleans today the city where we've been doing business for 108 years since the founding of our predecessor bank, we've been deploying capital and proving credit in support of New Orleans, its businesses and its residents. We are also partnering with not-for-profits, business and civic leaders to foster growth and to create jobs. We have more than 2,700 employees in Louisiana, more than 1 million customers and we bank 78,000 small businesses. Since Hurricane Katrina in 2005 JPMorgan Chase has given $36 million to not-for-profits working in Louisiana and has lent or invested over $800 million to build 7,500 units of affordable housing statewide as well as grocery stores, hospitals and day-care facilities. New Orleans is a great example of our committed work. We've put in our resources, the expertise of our people, our data and our relationships into act to help this community and those who live and work here.

Now I'll turn to your Company's performance for 2015. Last year JPMorgan Chase earned a record $24.4 billion in net income on revenue of 96.6 billion in fact we have delivered record results in the last five to six years and we hope to continue to deliver in the future. Our financial results reflect strong underlying performance across our businesses importantly we exceeded all our major financial commitments, balance sheet optimization, capital deployment, GSIB surcharge reduction and expense cuts. Aside from our financial performance, our Company continues to support customers, business and communities. During the course of 2015 JPMorgan Chase provided credit or raised capital of more than $2 trillion for our clients, ranging from big companies to small businesses, investors and individuals as well as countries and their sovereign institutions. In addition we’ve hired more than 10,000 military veterans since 2011 as the founding member of the 100,000 jobs mission which now is a goal of finding 1 million jobs for veterans.

Now let's look at our franchise, which was strong and getting stronger. When I travel around the world and we do business in over 100 countries, our clients are almost uniformly pleased with us. In fact most cities, states and countries want more of JPMorgan Chase. They want us to bring more of our resources from our financial capabilities and technology, our human capital and expertise to their communities. While we do not know what the next few years may bring, we are confident that these are our clients around the world will continue to grow and our consistent strategy of building for the future and being there for our clients in good times and bad, has put us in very good stead. Whatever the future brings we believe that we’ll face it from a position of strength and stability.

To-date virtually all of our businesses are closed to best in class in overhead ratios and in return on tangible equity. In addition, our businesses have been gaining markets in the recent years and that can only happen when you are creating happy clients. And importantly, we continue to make sizeable investments for the future. These investments are in technology and infrastructure as well as other organic growth opportunities including new retail branches, new wholesale branches outside of the United States, new Chase private client locations, commercial banking expansion cities and the addition of small business bankers. We’re focused on other exciting -- we are also focused on other exciting investments and innovative initiatives including digital banking, payments, Big Data, segmentation, electronic trading and the IB and the JPMorgan Chase Institute.

As we continue to build for the long-term and serve our clients and our communities, we know that nothing more important than to protect our Company going forward so we can continue to be here for all those who count on us. So we’ve taken many acts to make the Company stronger and safer including our fortunate balance sheet has been hit with enhanced capital liquidity, our ability to survive extreme stress, our extensive de-risking and simplification of the business and the building fortress controls and meeting far more stringent regulatory standards.

Taken together these actions enabled us to make extraordinary progress towards reducing and ultimately eliminating the risk of JPMorgan Chase billing and the cause of any failure being borne by the American tax payor or the U.S. economy. And we have an extraordinary amount of capital to sustain us in the event of losses. JPMorgan Chase alone has enough loss absorbing resource to bear all the losses assumed by the Fed’s stress test of the 31 largest banks in total in the United States. Because of the regulations and higher capital large banks in the United States are far stronger. Overall, rest assured that JPMorgan Chase is well positioned in regards to cycles, market volatility or other geopolitical risks and is always prepared for the toughest of times.

As we look ahead I want to point out the strong banking system is absolutely critical to a country’s success. For the people of the country to thrive you need to have a successful economy and markets. So to currently be successful it is an absolute necessity to have a healthy and successful banking system. The United States is a large vibrant financial system for asset managers and private equities funds to hedge funds, non-banks, venture capitalists, public and private market participants, small to large investors and banks. Banks are at the core of the system to educate the world about companies and markets they syndicate credit and market risk, they hold and move money assets, and they necessarily create discipline among borrowers and transparency in the markets. To do this well, America needs all different kinds of financial institutions and all different kinds of banks large and small.

Not only are America’s largest banks global leaders but they help fit global standards for financial markets, companies and even countries in controls such as anti-money laundering. Finally, banks bring huge resources financial knowledge to America’s major flagship companies and investors thereby helping them to maintain their global leadership positions. Most banks actually are trusted by their clients but generically they are not. We believe the way that the only way to restore to a position of trust is to earn everyday in every community and with every client. To do that there is no simple answer other than maintain steadfast consistent and transparent behavior wherever we operate, communicate honestly, clearly and consistently, deliver great products and services, admitting to mistakes is good but fixing them is better and learning from them is essential.

Make it easy for customers deal with you particularly when they have problems, work with customers who are struggling, both individuals and companies, focus the customer and treat all the clients the way you want to be treated, be great citizens in the community, establish strong relationships with governments and civic society, treat regulators like full partners and accept they will not always agree but when they make changes to regulations even ones you don’t like accept them and move on. As an industry, make fewer mistakes and behave better that the behavior of anyone individual reverberate and affect the entire industry.

Finally, strong regulators and strong retainers for banks must ultimately mean the banks are meeting more rigorous standards. Every bank is doing everything in the power to meet regulatory standards. It has been eight years since the financial crisis and six years since Dodd Frank, the regulators should take more credit for the extraordinary amount that has been accomplished and they should state this clearly to the American public. This should help improve the consumer confidence in the banking system and in the economy in general.

I’d like to spend a minute talking about what works and what doesn’t work. In my job I am fortunate to be able to travel around the world to meet presidents, prime ministers, chief executives officers, not for profit directors and other intellectual civic leaders all that want a better future for the country and their people. What I have learned from them is that while politics is hard in my view much harder than business, breeding this trust and misunderstanding makes the political environment far worse, nearly always collaboration, rational thinking and analysis to make the situation better. Solutions are not always easy to find, but they are almost always there.

What doesn’t work treating every decision like it is binary, my way or your way most decisions are not binary and there is usually a better answer to the way we found if you do the analysis and involve the right people. Drawing strong man or escape those does not work these generally are subtle attempts to oversimplify someone’s position in order to attract it resulting anger, misunderstanding and mistrust. Denigrating a whole class of society, this is always wrong and just another form of prejudice. One of the greatest men in American history President Abraham Lincoln never drew strong man, never escaped goal and never denigrates any class society even though he probably had more reasons to do it than many. In the same breadth some of our politicians extol virtues while violating them.

Equating perception with reality, this is a tough one, because you have to deal with both perception and reality. However, perceptions that are real are completely different from perceptions that are false and how you deal with them each to probably differ. Treating someone’s comments is their complaints when someone’s responsive issue raise is here they go complaining again that reaction diminishes their point of view and diminishes that person. When person complains you should always ask the question are they right or they wrong.

What does work, collaborating and comprising, they are a necessity in the democracy also you can compromise about violating your principals but it is nearly impossible to compromise when you turn principals into ideology. Listening carefully to each other, making an effort to understand what someone is right and acknowledge it each of us should read and listen to great thinkers who have an alternative point of view. Constantly opening and thoroughly reviewing institutions programs and politics, analyze what is working what is not working and then figure out together how you can make it better.

Let me close by thanking our nearly 250,000 employees and including our senior management team and our Board of Directors. Our Board is fully engaged with all the critical mass of the company from setting the agenda and the Board Meetings for reviewing strategy and determining CEO compensation to successor plan. Lee Raymond is going to stand up in a minute and describe some of their processes. Importantly, they meet without the CEO in every Board Meeting and increasingly engaged with regulatory shareholder affairs.

We also have a strong corporate culture that we will continue to fortify and make sure it is an enduring strength of this institution. We have an exceptional global management team comprised of individuals who have significant tenure at the company and are focused on anything you have done and done right, there is a good team of senior leaders as ever -- is as good a team of senior leaders that I have ever had the privilege to work with they all posses exceptional character, culture and capabilities. I’m honoured to work at this company and with this outstanding people. What they have accomplished during these often difficult circumstances in the last 10 years has been extraordinary. I love seeing our people close up in action, I’d like to end by expressing deep gratitude to all the employees of JPMorgan Chase Lee floor is yours.

Lee Raymond

Thank you, Jamie. On behalf of my colleagues on the Board, I would like to thank our fellow shareholders of JPMorgan for participating in today’s meeting. For those of you who are employee shareholders let me also take a moment to thank you for the work you do for the good of our company. Jamie has spoken to you about the performance of the company, which has continued to well serve our clients and customers and to support sustained shareholder value. For my remarks, I thought it would be useful to comment on the role of the Board, our approach to compensation, the continued importance of culture and conduct and the value of shareholder engagement.

We view the core Board function as providing oversight on matters that are most important to shareholder value and to meet the regulatory expectations. That includes understanding and approving the company’s strategic plan, monitoring the company’s financial performance, planning for CEO and other Senior Executive succession, overseeing the risk management and internal control frameworks and reinforcing and communicating the tone at the top for the company’s values and culture.

We seek to achieve these goals primarily through active Board engagement and I will give you three examples today. First we use Board Meetings and other events to satisfy ourselves that management’s major company executives have -- are thoroughly evaluated. Directors have direct access to all company executives at every level. It is the Board practice to stay informed and ask probing questions of management where or the Board considers appropriate, we do provide input and advise.

Second, we are thoughtful about how we structure our Board Meetings. The Board approves matters to be included on the Board and committee agendas, including the types of matters and information that we ask that management bring to the attention of the Board in a timely fashion, and at each Board meeting, the Board meets an executive session without the CEO or other members of management being present. Third, we assess performance this includes providing feedback on senior management performance and holding management accountable when appropriate, as well as assessing our own Board performance. To make this more concrete, I want to walk you through the Board’s approach to compensation. As a good example of how your Board approaches major issues.

Broadly speaking, the Board regularly reviews compensation practices to align them what we believe to be the best interest of our shareholders. The Board takes a holistic and discretionary approach in determining compensation, considering both company and individual performance. More specifically the Board assesses performance against four broad categories business results, risk and control, customer and clients, and people management and leadership. We assess performance not only for the most recent year but over a multiyear period. It is a very continuous process. We have been consistent in following this approach for many years and believe it has resulted in compensation outcomes that have been both appropriate for management and for shareholders.

For Jamie as CEO, the Board's decision to increase his 2015 compensation reflects both his demonstrated leadership in driving exceptional firm-wide performance that being both financial and nonfinancial on a multiyear basis. This concludes strong financial results and progress on long-term objectives, significant enhancements to our control environment and reinforcement of the Company's culture, continued market leadership of our franchises and a significant investment in our people to develop the outstanding talent we have across the Company. All of Jamie's equity and incentive compensation was awarded in the form of performance shares units which I will refer to in just a moment.

Speaking more broadly culture and conduct remain a continuing focus for the Board. We want the tone from the top to resonate at all levels of the Company. Management has with Board oversight taken substantial steps to reaffirm the historic commitment of the Company and to each employee to do first-class business in a first class way. Among many steps last year the Board amended the charter of the compensation and management development committee to give its responsibility for assisting the board and its oversight of the Company filtering conduct programs.

Turning to shareholder engagement, the Board benefits from and considers your feedback. Last year, we heard shareholder ask about why don't we tie divesting of a portion of incentive awards to a predetermined performance metric as opposed to simply time. We followed up on this feedback with further extensive shareholder engagement. We had nearly 100 discussions with shareholders representing more than 40% of our outstanding shares. A consistent team was that the portion of long-term incentives should be tied to quantifiable financial performance measures. Following that deliberation in January 2016, the Board approved the new PSU program for the operating committee members, which is described in detail in the proxy statement, taken together, I believe the Board has served shareholders well this year including through its active oversight of matters on compensation driving forward culture and through shareholder engagement.

That concludes my report and now again I'd like to turn it back over Jamie for the rest of the meeting. Janie?

Stacey Friedman

Thank you, Lee. Thank you, Jamie. It's now time to turn to the shareholder and the management proposals. I will introduce the management proposals first and then invite the shareholder proponents to introduce their proposals. After all the proposals have been introduced, we will then a general Q&A session, I would ask that you hold your questions whether there on the proposal or comments or for other matters until that general Q&A session.

On the management proposals, there are three nominees for approval of all three of them. First, the election of the directors; second, an advisory resolution to approve executive compensation; third, ratification of the independent registered public accounting firm PricewaterhouseCoopers a representative of which is here today.

I am now going to ask the shareholder proponents to introduce their proposals, proponents we do ask that you limit your time to three minutes and confine your comments to the subject of the matter of the proposal. Be sure that all components we want to make sure that all components have an opportunity to speak today and we have time at the end. There are lots of lights that will turn yellow after two minutes in red after three minute I think you will able to see those. There is two standing microphones in the middle of the room after I have recognized you please proceed to the microphone nearest you. We ask that other speakers do allow the shareholder proposals to go first and then we’ll come back to Q&A at the end. So the first proposal I am going to turn to from shareholders is proposal four to require an independent share, proposal four was submitted by Mr. William Steiner. We’ve been advised that Mr. Bartlett Naylor will present this proposal Mr. Naylor, are you ready?

Bartlett Naylor

Yes. Thank you Madam Council Chairman I move proposal number four as provided in the proxy. Since I will be actually as you know introducing four other resolutions let me just be indulged for a minute to explain that who I am, who Public Citizen is. We’re often minimized as a last wing progressive group. But I would like you to understand that we’ve been on the vanguard of some initiatives that are common place. Our founder wrote a book called Unsafe at any Speed and today I take no responsible parent would put their child in the backseat without a seatbelt. We have a platinum litigation team where of the 100 Supreme Court cases that are heard each year between one and three are argued by a Public Citizen attorney. We were essential in the advancement of Dodd Frank in fact when Hamrick Spencer wrote for a paper that what the basis of the consumer financial protection deal she named it Unsafe at any rate and clear…

Stacey Friedman

Mr. Naylor if I could…

Bartlett Naylor

If you’re going to interrupt me then I assume that you’re inviting that so.

Stacey Friedman

Mr. Naylor I would ask that we read through the order of the agenda first, if we could hear your proposal we’ll have Q&A after. I know we have a limited amount of time I want to make sure we give you time to hit this proposal number 41 and turn to that first.

Bartlett Naylor

So the 12 seconds you just used are my seconds. Thank you. While many of these proposals have been if you will on the edge the one that I am advancing now regarding an independent share is very much in the mainstream, it's common sense, it's healthy. How is it that a CEO can oversee himself as chair, I think it makes no sense at all. When this company lost $6 billion because it could not understand what its comps were doing in London, a shareholder was paying that and what is he supposed to do with the shareholder that calls his chair are going to find out the chair is the same person and when this person advances a shareholder proposal the company uses shareholder money to contest it. So I think the Company should simply accept this. You have a lead director with great skill and acknowledge that a chair represents shareholders and it's an inherent conflict that he not be also the CEO. Thank you.

Stacey Friedman

Thank you. We oppose this resolution and our reasons for doing so appear on Page 85 of the proxy. We’ll next turn to proposal number 5, how those are accounted using only for and against to ignore extensions proposal 5 was submitted by Mr. Mercy Rohm and the quality network foundation. We’ve been advised that Mr. Bartlett Naylor will also present this proposal. Mr. Naylor would you like to turn to that now?

Bartlett Naylor

Yes, thank you. I propose this as explained in the proxy to expand they are those who ask why is it that shareholders tolerate misconduct core management and so forth? And I think this resolution typifies this. All this resolution says is to urge the most euphemistic of Episcopalian language, and I used that religion because the religion of our founder. Simply urging and yet this modest proposal is contested by JPMorgan not this year with a no action letter but in years past. And you say that basically 87% of the vote is represented here but 13% they’re going to say it's automatically counted again. I think this is common sense the fact that you would not even wish to be urged, I think epitomizes what is disabling about true shareholder governance and keeping shareholder concerns front and center with management. Thank you.

Stacey Friedman

Management opposes this proposal and this resolution and the reasons we’re doing so appear on Page 88 of the proxy statement. We’ll now turn to proposal number 6, the prohibition divesting of equity based awards for senior executives due to voluntary resignation to inter-government service proposal number 6 was submitted by the AFL CIO Reserve Fund and we’ve been advised that Ms. Anand will present this proposal Ms. Anand will you proceed?

Vineeta Anand

My name is Vineeta Anand and I represent the AFL CIO Reserve Fund. I’d like to introduce a stockholder proposal urging the Board of Directors to ban the practice of giving preferential treatment of equity awards to executives who join the government. Typically executives are awarded with equity when they fulfill the eligibility requirements for tenure or performance. If they leave early they forfeit the award that has been understood for a long time by anybody at any company who receives equity awards. But here at JPMorgan executives receive a windfall, when they join the government. Even if they quit before they meet the eligibility requirements.

The company maintains that the provision does not result in a windfall, because it nearly removes “an impediment” for those taking government jobs. I’m not going to quibble over semantics. The proxy statement says very clearly that under the government office provisions all outstanding equity awards continue to vest even after the executives quits to take a government job. The point of vesting requirements as I understand it and I think other people understand is to retain valuable employees. So giving the full equity awards to those who leave to join the government make give executives an incentive to quit prematurely to pursue those jobs. It also makes a mockery of the tenure of performance of eligibility requirements. Government service is commendable, I don’t argue with that, but we don’t believe that shareholders should be asked to subsidize executive’s career choices through the acceleration of equity awards that otherwise be forfeited after voluntary resignation.

To my knowledge no other industry provides Government Service Golden Parachutes. The proxy statement states that this provision is intended to “enable us to hire and brightest employees”. However, commercial banks such as Wells Fargo, Bank of America do not offer such a benefit. Employees forfeit award if they quit to take a job with the government before they meet the eligibility requirements. Government Service Golden Parachutes also raised public policy concerns providing a financial incentive to enter government service creates the appearance of a revolving door between Wall Street and financial regulators. And I believe I heard you say that you want strong regulators.

The financial system is in fact more secure than the public has more confidence in the independent and objectivity of market regulators. I have here three petitions signed by 44,000 people urging JPMorgan and other Wall Street banks to ban Government Service Golden Parachutes. Petitions were organized by the AFO CIO, Public Citizens and Americans for Financial Reform. I’ll be happy to give you a copy of the petition this time and I hope you’ll accept it. The issue is not going to go away we hope you will be an industry leader and ban these kinds of parachutes. Thank you.

Stacey Friedman

Thank you. We oppose this resolution and our reasons for doing so appear on Page 89 of the proxy. We’ll now turn back to proposal number seven to address whether divestiture of all non-core banking business segments would enhance shareholder value, this proposal was submitted by Mr. Bartlett Naylor and we have been advised that Mr. Naylor will present this as well. Mr. Naylor?

Bartlett Naylor

Thank you, madam counsel. I hereby move proposal number seven as provided in the proxy. This proposal urges the bank to undertake a steady of whether or not shareholder value would be improved by in my view returning to the days of the last eagle when commercial and investment banking was separate. I think the event since 2008 have made it clear that there are numerous hazards within the fact that the liability -- the $1.3 trillion of liabilities of JPMorgan are subsidized, socialized with tax payor guarantee, it’s called the Federal Deposit Insurance Corp. I think the fact that we had to bail out the large banks in 2008 proved that the bank is too big to fail, this is understood by essentially every politician in Washington and including the health banking chairman Jeb Hensarling who was a conservative republican who will be putting forth a bail shortly which reflects the fact that he believes that JPMorgan is too big to fail.

The massive rap sheet on JPMorgan, which you could see for example on a Web site of the New York Times for example manipulation of foreign exchange of the London Interbank offered rate, of energy markets, of fraud in the mortgage suggest that management is not able to oversee carefully such that they do not engage in misconduct, the bank is too big to jail. And then finally the fact that after months of examination with outside commissions experts looking at your London Whale episode could not find the simple fact that it was not a hedge that sort of banking committee investigation.

I think the bank is too big to manage you are living whale is some 200,000 pages long that is an un-sizable length and the fact that you have failed your living whale test a few weeks ago, I think for attempts that you made well tailored again because I don’t think anybody can read 200,000 in a day let alone all decide whether or not they actually can pull this plug and dissolve this bank as the Section 165 provides them to Dodd Frank, so because this bank in my opinion is too big to fail, too big to jail, too big to manage I think you should have done very least undertake a study with independently commissioned experts to decide if this bank would be worth more imparts. Thank you.

Stacey Friedman

Thank you. We oppose this resolution our reasons for doing so appear on Page 91 of the proxy. Proposal number eight is to defer any compensation for 10 years to help satisfy any monetary penalty associated with the violation of law. Proposal eight was submitted by Mr. Kenneth Steiner and we've been advised that Mr. Naylor will present on that also. Mr. Naylor.

Bartlett Naylor

Madam, Counsel a few years ago the -- I move proposal number eight as provided in the proxy. A few years ago the President of the New York Federal Reserve Bank William Dudley gazing across the cultural wreckage that was Wall Street said that something needed to be done to attune management incentives to proper conduct. And he said that there should be deferred pay put into a pot by senior management because that's about 1,000 people. And should the bank engage in misconduct for which it would have to pay a penalty that penal -- that part would be used first. Now you might say well those managers may or may not have been personally responsible. Well that's true and yet now the $30 billion plus that have been paid in penalties have been shouldered by we shareholders, and I promise the sisters of charity were not responsible for these frauds, management was responsible.

You needn’t watch television to long before you hear the reprise that nobody has been sent to jail unlike the 1,000 savings and loan executives who went to jail. You opposed it because you say that your current policy is stronger and that you even provide transparency now I am not aware of money of individuals other than a handful in the London Whale case where you actually have in fact cost back money. So I think that while this will attract a different type of banker to JPMorgan, I think that's the type of banker we want to attract somebody who is a boy scout who is committed to making JPMorgan a fair inter-mediator between savers and users of capital and not somebody who in the case that we've seen unfortunately in the last half-dozen years has decided to go off the rails of the law to make money for our company. Thank you.

Stacey Friedman

Thank you, we oppose this resolution our reasons for doing so appear on Page 94 of the proxy statement. Proposal number nine is to adopt a balanced executive compensation philosophy with social factors to improve the Firm’s ethical conduct and public reputation. Proposal was submitted by Jing Zhao. We've been advised that Mr. Naylor will also present this proposal. Mr. Naylor.

Bartlett Naylor

Thank you, madam counsel. I move proposal nine as provided in the proxy. Mr. Jing Zhao is an interesting person and asks a very simple request that your pay the respectful for the earning income GAAP not only in the United States but across the planet. We pay our leading hedge fund managers upwards of $2.5 million an hour, $700 a second that is twice the income, annual income of the Congo. He asked that you be mindful of that. You oppose this resolution although I actually don't see anything in here that degrades or derives a goal in fact you seem to honour the goal. You say that one point that your pay provides no special perquisite that top line logic because I have been reading about the so called Sons and Daughters Program in China. I was privileged to work with Senator Proxmire who offered the Foreign Corrupt Practices Act which says that you're not supposed to bribe foreign officials even as it is sort of cultural custom in that country.

I am concerned that while you're opposition to this event is excellent choice of words that you don't actually mount a very formidable defense of why Mr. Jing Zhao's resolution. Finally let me just explain Mr. Jing Zhao is not this passionate observer. He has dealt with the Chinese descendant. And he thought that when he was emailing on Yahoo! in China that those conversations were privileged he in fact was jailed when those emails were turned into the government and he was expelled and held in California. So I think he understands firsthand what the imprint, the footprint of JPMorgan and other international companies can do or better or for worse and I think he affords you to set a very high example. Thank you.

Stacey Friedman

Thank you. We oppose this resolution as well our reasons for doing so appear on Page 96 of the proxy statement. With that I think we’ve completed the introduction of the shareholder proposals. We’ve opposed them for the reasons set forth in the proxy statement. I am now going to turn to agenda item three, the general discussion. We are ready for any general questions or comments from shareholders. After which we’ll close the polls and present the preliminary voting results. There are two standing microphones as I pointed out earlier. If you wish to address the meeting, please proceed to the microphone nearest you and take your place in line. When addressing the meeting we ask that you state your name, mention whether you were a shareholder. As a reminder, we do ask that everybody limit their comments to three minutes and allow everybody the opportunity to speak. We will try and limit the discussion matter to 10 minutes total on any comment or topic. Please direct your questions to our CEO and Chairman Mr. Dimon. Do we have any questions from the audience?

I’ll turn to agenda item 4. Our discussion period has now ended. Please submit any remaining ballots and proxies hold up your ballot if you have one and somebody will come collect it. As from that, I declare the poll is closed at 10.43 AM. We’ve concluded the formal portion of our meeting. I will now read the preliminary voting results that were received immediately prior to the meeting, the final voting results will be reported on a form 8-K that will be filed with the SEC and also the minutes of the meeting. With respect to the election of the directors, all directors were elected and each direct received a majority of the votes cast for and against. No director received less than 96% of the votes cast.

With respect to the other proposals today, the results I read will be the percentage voted before each proposal based on shares marked 4 against or abstained for proposal 2 this was the vote of the advisor resolution to improve executive compensation, 91.74. Proposal 3, the vote for ratification of our independent auditor, PWC, was 98.4% for, proposal four for approval of the independent board chairman with 32.9% for, proposal 5, the vote for -- the proposal regarding how votes are counted was 7.8% for, proposal six, the vote regarding vesting for government service was 25.7% for, proposal 7 regarding the appointing of the shareholder value committee was 2.9% for, proposal 8 regarding the clawback amendment was 4.1% for, proposal 9 regarding executive compensation philosophy was 4.7% for. Jamie, do you want to say a few last words?

Jamie Dimon

So we really appreciate the views of all of our shareholders and have thoughtful they were in engaging us the entire board takes their feedback very seriously and will continue to incorporate their input in how we govern the company. We’ll continue to build towards being the best-in-class company in every way shape and form.

Stacey Friedman

I think that concludes all the business Jamie. If you want to move to adjourn the meeting now is the time.

Jamie Dimon

Do I hear emotion for adjourning? Accepted, thank you, folks thank you for visiting us this time.

Stacey Friedman

Thank you.

Jamie Dimon

This meeting is adjourned.

Question-and-Answer Session

End of Q&A

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