By Pam Martens and Russ Martens: June 28, 2021 ~
According to the 10-K (Annual Report) forms that JPMorgan Chase has filed with the SEC for years 2017, 2018, and 2019, it has bought back a total of $59.5 billion of its own common stock, thus inflating its share price by that sum of money. In 2019 the bank bought back a whopping 212,975,185 shares for $24.12 billion; 181,504,483 shares in 2018 for a total of $19.98 billion; and 166,557,198 shares in 2017 for $15.4 billion. Notice that the growth in the dollar amount of the buybacks grew by 56.6 percent from 2017 to 2019.
Who benefitted tremendously from this boosting of the share price? Insiders.
According to the proxy JPMorgan Chase filed with the SEC on April 7, Jamie Dimon, the Chairman and CEO of JPMorgan Chase, owns 9,385,141 shares of the bank’s common stock – the bulk of which he obtained under “performance” awards given to him by his Board of Directors. (Never mind that Dimon’s “performance” has included racking up an unprecedented five felony counts against the bank and paying out more than $43 billion in fines and settlements for egregious financial abuses since 2014.) As of Friday’s closing price, Dimon’s shares had a market value of $1.44 billion, illustrating how handsomely crime pays on Wall Street.
The only person on the JPMorgan Chase board with more shares of JPMorgan Chase common stock than Dimon is James S. Crown, the Chairman and CEO of Henry Crown and Company. According to the proxy, Crown owns 12,479,698 shares valued at $1.9 billion as of Friday’s close. The bank has an incestuous relationship with Crown, providing financing for his family’s sprawling businesses. Nonetheless, he is called an “independent” director in the proxy.
Both Dimon and Crown benefit greatly from the stock buybacks while thousands of the bank’s workers can’t even meet their monthly bills for the basic necessities of life.
At a 2019 House hearing with Wall Street bank CEOs, Congresswoman Katie Porter (D-CA) asked Dimon for help with a math problem. Porter contrasted how Jamie Dimon’s $31 million in compensation for 2018 compared to what his bank is paying one of its bank tellers — a single mother with a 6-year old daughter.
Porter explained that she went to Monster.com and found a job in her hometown of Irvine, California for a bank teller at JPMorgan Chase. Porter said the job pays $16.50 per hour or $35,070 per year for an after-tax amount of $29,100 for a single mother with a six-year old child. After deducting for rent on a 1-bedroom apartment, utilities, car payment on a 2008 car, gas, food, the cheapest cell phone, and after-school child care, Porter said the single mom would be $567 in the whole each month.
Porter then asked Dimon how this woman should manage her budget short-fall while she’s working full time at his bank. Dimon said he didn’t know what he would advise the woman to do but he’d like to have a conversation with her and try to be helpful. Porter responded: “What I’d like you to do is provide a way for families to make ends meet. So that little kids who are six years old living in a one-bedroom apartment with their mother aren’t going hungry at night because they’re $567 short…” (See the YouTube video clip of the exchange below.)
In 2019, Senator Sherrod Brown (D-OH) introduced legislation that would dramatically level the playing field between workers and their billionaire bosses who are getting obscenely rich on stock awards and share buybacks.
The background of the plan was explained as follows in a press release at the time:
“Over the past decade, corporate stock buybacks have soared. Corporations use stock buybacks to withhold profits from workers, and instead keep more and more profits for their CEOs and Wall Street investors. And buybacks exploded after President Trump signed the 2017 Republican tax giveaway to corporations. We must stop this never-ending cycle of corporate greed, and make sure that workers are sharing in the profits they create. Senator Brown is introducing legislation to do just that. The plan is simple: if corporations want to transfer wealth to Wall Street, workers have to get a proportionate share of the pie. For every $1 million passed on to shareholders in the form of stock buybacks or dividends, corporations would have to pass on $1 to every worker. We’re calling it a Worker Dividend, and all public corporations would be required to pay it.”
Specifics in the legislation include the following:
“Require public companies to issue a worker dividend to all non-executive workers based on the total amount spent on stock buybacks, dividend increases, and special dividends. The worker dividend will be equal to $1 for every $1 million spent on stock buybacks, dividend increases and special dividends.
“Lower the permissible amount of stock buybacks a company can make.
“Impose reporting requirements to ensure transparency into corporations’ stock buybacks.
“Convert the safe harbor rule to a mandatory prohibition on excessive stock buyback activities.
“Establish an enforcement mechanism – including a 5-year moratorium on stock buybacks and a private right of action for employees – if a corporation fails to meet the worker dividend requirements.”
If the legislation had been signed into law, that single mom teller at JPMorgan Chase would have received an additional $24,120 in compensation for 2019 – enough to meet her monthly bills, put money away for her child’s education and save to one day buy a home of their own.