Investigation on the Compensation Incentive Structure of Non-employee Directors of a Company---- Taking JP Morgan as an Example

Abstract

Compensation incentive for non-employee directors is a crucial factor of building a successful company, especially for big company like JP Morgan, keeping non-employee directors always at a high level of contributing and make them perform their loyalty is extremely important. In this passage, the author is going to outline and analyze the non-employee directors’ compensation incentive structure of the bank “JP Morgan”. The author is using the 2015-2016 and 2020-2021 official proxy statement of JP Morgan as reference to compare and contrast, as well as analyzing how non-employee directors’ compensation incentive structure changed over five years. The result of this essay is that the non-employee directors’ compensation incentive structure in JP Morgan is properly constructed and well developed, there are special ways to evaluate the performance of non-employee directors. The compensation incentives for non-employee directors did not significantly increase or decrease from 2015 to 2020. This essay will promote people’s understanding about the incentive structure of JP Morgan, also get a clear and detailed understanding of how the incentive for non-employee directors benefits the income of the overall company.