It shouldn’t be laborious to see why Jamie Dimon owns plenty of shares in JPMorgan Chase. He’s the financial institution’s boss and its shareholders need his pursuits to be aligned with theirs. Paying him principally in inventory, slightly than money, helps be certain that they’re. An govt with a major proportion of financial savings invested of their agency’s shares has tied their future to the corporate’s. This discourages them from doing issues which may pad their wallets within the quick time period on the expense of shareholders’ long-term returns, comparable to increasing the agency unsustainably quick. The incentives are stronger nonetheless if—as with Mr Dimon—the boss is promised shares for supply a while therefore, or if any gross sales immediate newspaper headlines.
