Dive Brief:
- JPMorgan Chase CEO Jamie Dimon plans to sell $141 million worth of shares in the New York City-based firm, the company disclosed in a Securities and Exchange Commission filing Friday.
- Beginning next year, Dimon and his family plan to sell 1 million shares for “financial diversification and tax-planning purposes,” according to the bank.
- The transaction, which represents 12% of his stake in the firm, marks Dimon’s first such stock sale since taking the helm of the company almost two decades ago.
Dive Insight:
“Mr. Dimon continues to believe the company’s prospects are very strong and his stake in the company will remain very significant,” the bank said in the filing.
Dimon currently holds 8.6 million in JPMorgan stock, a stake worth about $1.21 billion, based on Thursday’s closing price, according to The Wall Street Journal.
Dimon, who has led the bank since 2005, has amassed the majority of his JPMorgan shares through stock-based compensation, according to the Journal. His decision to cash in on some of the stock could reignite speculation about how much longer the chief executive plans to lead the nation’s largest bank.
“Given that this is Mr. Dimon’s first such sale since joining the company and that he is such a critical part of the story, we are certain the announcement will draw attention,” Piper Sandler analysts R. Scott Siefers and Frank Williams, said in a note to clients, according to Bloomberg.
While the announcement may cause some near-term weakness in the stock, “diversification sure seems prudent, and we find no fault with the decision,” they wrote.
In the past, the bank used to tout the fact that Dimon has “not sold a single share of JPMorgan Chase common stock,” according to the Financial Times. The firm has also used share options as a retention bonus, aimed at keeping the executive in the bank’s top spot.
JPMorgan gave Dimon a special $50 million grant of share options in 2021, an award reflecting the board’s “desire” that he “continue to lead the Firm for a further significant number of years,” according to a securities filing.
In past years, when asked about a succession timeline, the 67-year-old Dimon typically would respond it was five years.
A bank spokesperson told the Financial Times on Friday Dimon’s sales had no connection to succession planning, adding he had “no plans to enter into another such sale but will of course consider his financial planning needs over time.”
Dimon, who was paid $34.5 million last year, is one of the nation’s highest paid bank CEOs with a net worth of around $2 billion, according to the Bloomberg Billionaires Index.
Meanwhile, JPMorgan rival Morgan Stanley announced Wednesday that longtime CEO James Gorman would step down Jan. 1 and be replaced by the bank’s co-president, Ted Pick.
