JPMorgan Chase granted Daniel Pinto a special stock award worth around $25 million ahead of his promotion next month to sole president of the biggest U.S. bank.
The firm’s compensation and management-development committee awarded Pinto 750,000 options in the form of stock-appreciation rights, the New York-based company said Wednesday in a regulatory filing.
“The special award reflects the CMDC’s desire for Mr. Pinto to continue his outstanding leadership in this new role for a further significant number of years,” the company said in the filing. “The options are not part of Mr. Pinto’s regular annual compensation and will not be awarded on a regularly recurring basis.”
Pinto is widely seen as the obvious emergency replacement for Chief Executive Jamie Dimon, who has long said he plans to stick around at least five more years, but Pinto is less likely to take over in a slow and orderly handoff.
The grant is currently worth about $25 million on paper based on its term and exercise price, according to calculations by Bloomberg News. If JPMorgan’s share price increases 50%, the options will net Pinto $60 million before taxes. If it doubles, they’ll yield almost $120 million. Conversely, if it falls below the current level when Pinto is able to exercise the options, they will be worthless.
A JPMorgan spokesperson declined to comment on the value of the options.
Pinto’s options will have an exercise price equal to the average of the high and low prices of JPMorgan’s common stock on Dec. 14, according to the filing. The options have a 10-year term and will become exercisable no earlier than Dec. 14, 2026.
JPMorgan and other top Wall Street firms are expected to be generous with this year’s bonuses, amid a dealmaking frenzy that’s boosted revenue across the industry. Bankers at JPMorgan could see payouts jump 40%, according to people with knowledge of the initial deliberations.
Dimon was granted a similar special gift of stock-appreciation rights in July to persuade him to lead the biggest U.S. lender for another “significant number of years.”
