Wall Street giant JPMorganChase tops the list of global systemically important banks that State Street’s asset management arm is engaging on pay.
State Street Global Advisors (SSGA), which has $2.4trn (€2.2trn) under management, has listed 15 global systemically important financial institution (SIFI) banks for engagement on pay, according to a document prepared for a client pension fund.
Top of the listing, ranked by “quantum of pay”, is JPMorgan, whose chairman/CEO Jamie Dimon’s pay comes in at $27.7m. The ranking also includes total shareholder return (TSR) over one, three and five years.
The bank comes in eighth, eighth and fourth among its peers on the respective metrics. In terms of return on equity, it is fourth. The TSR and ROE figures are sourced from ISS, one of the firms slammed by Dimon in controversial remarks in May.
Second and third on the listing are Morgan Stanley and Goldman Sachs, while State Street itself is ranked ninth on its own list.
Dimon tore into shareholders at an event in May, calling them out for relying on proxy firms such as Institutional Shareholder Services (ISS) and Glass Lewis.
But Responsible Investor reported that the investment banking titan’s own fund management arm uses ISS to help it decide how to vote on executive pay.The new SSGA document (‘Stewardship at SSGA’) reveals that SSGA has had 50 engagements with the banking and finance sector. It’s one of a slew of documents released as part of a transparency drive by Rhode Island Treasurer Seth Magaziner, a former vice president and equity analyst at SRI firm Trillium Asset Management, who oversees the $8.3bn Employees’ Retirement System of Rhode Island. The document can be found via an Open Data Portal here.
SSGA argues that global banks fall into two broad groups: those that consider the current environment as part of a cyclical trend; and those that consider the industry is undergoing structural change, requiring a reassessment of overall strategy.
The firm’s priorities for 2015 include exploring options for expanding the scope of its stewardship activities “beyond listed equities to include fixed income”. The governance team, based in Boston and London, is also expanding to Sydney this year, it adds.
Last week, research commissioned for the Financial Times found Dimon regained the title of the world’s best paid bank chief executive last year, having topped the table in three of the past five years. The research, by Equilar, found that the men who run 15 of the world’s biggest banks were paid an average of $14.5m in 2014 – a 17% increase over 2013.