It shouldn’t be onerous to see why Jamie Dimon owns lots 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 largely in inventory, fairly than money, helps be certain that they’re. An government 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 that may pad their wallets within the brief time period on the expense of shareholders’ long-term returns, akin 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.
