Here's the link of the news:
http://www.thedeal.com/dealscape/2009/11/jp_morgan_lifts_salary_freeze.php
(Below is the content of the letter from JPMC's HR Director)
Dear colleagues,
As year-end approaches, I wanted to take a few moments to remind all employees about some of the principles at JPMorgan Chase related to performance measurement and compensation as well as to update you on some decisions that have been made regarding salary and benefits.
Since the financial crisis began, there has been a great deal of talk about compensation. Many have speculated on how compensation practices may have contributed to or exacerbated the global crisis, and what best practices in our industry -- and in most industries -- should be. And for the most part, we at JPMorgan Chase have always followed these principles. They are simply:
- We have always looked at multi-year, sustained performance - and a demonstrated commitment to help build a better company focusing on long-term results.
- We don't have change-of-control agreements, golden parachutes or special severance and pension programs for senior executives - these were eliminated in 2005.
- Performance to us has never been simply a financial measure. We always look at the broader contribution a person brings to a company as well as the contribution of the business unit and the total performance of the whole company. In measuring performance, we look at a variety of other factors as well, including people management skills, teamwork, integrity, controls, risk, innovation, development of strong customer relationships and the ability to recruit and train a diverse, outstanding workforce.
- We always try to properly adjust results for the capital a business requires and the risk it takes.
- Employees at senior levels have always received a significant portion of their incentive compensation in restricted stock and options, which vest over multiple years.
- The senior management team is also required to keep ownership of 75% of compensation-related stock awards until retirement - which results in a significant portion of the senior management team's net worth being invested in the company.
- The company generally requires higher-paid and more senior employees to pay a larger share of their benefits costs, thereby reducing costs for other employees.
How we treat and pay our people is critical to building the best company in the world. We believe that we have long been disciplined and sensible around compensation, but like any business practice, it should be continually re-evaluated to ensure that our practices are best in class. In addition, it is possible that the regulatory rules will change compensation standards and we will, of course, adhere to all regulatory standards. However, we will continue to be committed to being highly competitive and paying for performance.
Last year, along with other measures to protect the company, we put a salary freeze in place for all employees earning above US$60,000. I'm pleased to let you know that we now plan to lift that salary freeze globally as part of our year-end performance and compensation review process, with raises effective early next year.
Earlier this year, given uncertainty in the environment, we suspended the 401(k) match for certain U.S employees eligible for this benefit. After further review, we have decided to provide a full 2009 401(k) match for this original, eligible population. In addition, we will grant a one-time US$500 special award early next year to employees globally with total annual cash compensation of less than US$60,000. In the United States, this will be made as a contribution to the 401(k) Savings Plan. Outside the United States, it will be paid through local payroll. We have also decided to continue providing a pension plan for our U.S. employees that is 100% paid for by the company. While we will be modifying the benefits formula next year to be more aligned with the current market, it is important to note that many other companies have frozen or eliminated their pension plans.
You will hear more about these changes to the U.S. benefits plans and additional details on the $500 award in the weeks to come. Until then, on behalf of the entire management team, thank you for your outstanding work this year.
John Donnelly, Director of HR
*happy face*
No comments:
Post a Comment