CEO Dimon to sell some of his JPMorgan shares

NEW YORK: JPMorgan Chase chief executive officer Jamie Dimon will sell some of his shares in the largest US bank next year for the first time in almost 18 years at the helm, the bank says.

Billionaire Dimon will sell the stock for “financial diversification and tax-planning purposes”, and “continues to believe the company’s prospects are very strong”, the bank said in a filing last Friday, sending the stock down more than 3%.

Dimon and his family intend to sell one million of their 8.6 million shares, according to the filing.

That is a tiny percentage of the shares outstanding in JPMorgan which has a market capitalisation exceeding US$409bil, according to LSEG data.

Dimon, one of the most prominent voices in corporate America, steered JPMorgan through the 2008 financial crisis.

He was also integral in the rescue of First Republic Bank this year which helped quell turmoil fuelled by the collapse of several regional banks.

The stock sale “makes perfect sense” given Dimon’s wealth is so concentrated in his company’s stock, said Octavio Marenzi, chief executive of Opimas, a management consultant focused on capital markets.

Still, investors can view such moves as a bad sign. “In his rhetoric, he has become more negative and quite bearish,” Marenzi said. “It doesn’t look good, but they’re massaging the optics as best they can.”

Dimon warned in October that “this may be the most dangerous time the world has seen in decades”. Still, the bank reported a 35% jump in profits.

The 67-year-old bank chief has an estimated net worth of US$1.7bil, according to Forbes.

The sale is not related to leadership succession, a company spokesman said. Dimon has no current plans to sell more stock, but could consider doing so in the future, the spokesman added.

In May, the CEO signalled he could depart in three and a half years.

Several executives who were viewed as potential successors to run JPMorgan have left to run other companies as Dimon stayed longer than expected.

The share sale would fetch nearly US$141mil, with a remaining stake of about US$1.07bil, based on last Thursday’s closing price. It will account for less than 10% of Dimon’s holdings, which also include performance shares that have not vested and stock appreciation rights.

Shares of JPMorgan slid more than 3%, falling with peers Bank of America, Citigroup and Wells Fargo.

“Typically, CEOs or insiders selling stock sparks concern, but not in this case, as the bank’s balance sheet remains in a strong position,” said Brian Mulberry, client portfolio manager at Zacks Investment Management, which holds JPMorgan stock.

“We are not concerned on the timing or the motive behind this,” Mulberry said, adding Zacks would not sell any shares after the announcement. — Reuters

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