"Shareholders are certainly sending a message to JPMorgan and want to see some changes," said Aaron Boyd, director of governance research for Equilar.
Unlike last year, when Dimon's 74 percent raise drew criticism, the pushback this year wasn't exactly about the size of his pay. Dimon's compensation remained flat for 2014, at $20 million, while the median CEO's pay rose about 12 percent, according to an analysis by Towers Watson.
Rather, two proxy advisory firms recommended a vote against the company's compensation plan because they think the bank is not transparent enough about how it sets performance metrics that determine pay.
Institutional Shareholder Services (ISS), an influential proxy advisory firm, critiqued the company's pay practices in a recent report, saying Dimon's $7.4 million cash bonus was reintroduced "without a compelling rationale." It rebuked the bank's lack of specifics in awarding incentive pay and said the decision to provide a hefty percentage of Dimon's pay in the form of a cash bonus raised concerns.
Dimon wasn't the only CEO who saw more cash in his pay package. The Wall Street Journal reported that cash compensation for CEOs in 2014 was higher than it has been since 2010, rising to 37 percent of total compensation. Yet Dimon's was particularly high: Between his $1.5 million in salary and his $7.4 million cash bonus, the cash portion made up roughly 45 percent of his total package.
Proxy advisory firm Glass Lewis also said it was recommending a vote against the company's pay plan, citing a disconnect between pay and performance. It too noted the lack of specific formulas in how the company sets compensation levels, and graded the company's 2014 pay-for-performance an "F" in a report it released on the bank.
A JPMorgan spokesman said in an email Tuesday that ISS and Glass Lewis advise on about 33 percent of the company's share votes. That could help explain why shareholder approval for the package was as low as it was this year.
During the meeting, JPMorgan's lead independent director, Lee Raymond, said that the company thinks its practices are "properly aligned." Yet he also acknowledged "the importance of the question" about whether its executive awards should be more closely tied to preset performance goals.
JPMorgan's proxy provides some explanation for why the company doesn't use a formula in defining such metrics. Given the diversity of the bank's business, the proxy states, "our evaluation of the firm does not lend itself to a simple formulation to determine a single 'score' or outcome that is indicative of overall performance."
It's also important to note that even if the majority of investors had voted against executive compensation at JPMorgan, the company could technically choose to ignore it. While the 2010 Dodd-Frank Act requires companies to offer shareholders an opportunity to weigh in on executive pay each year, the votes are only advisory.
Yet because it's exceedingly rare for pay packages to receive low votes of approval, few companies have needed to make that decision of whether to heed shareholder advice or not. Just two of the 241 companies in the S&P 500 that have shared results so far this year, for example, have failed to see a majority vote for executive pay plans.
"Anything below about 70 percent is an outlier result," said Peter Kimball, a vice president at ISS Corporate Solutions, a subsidiary of ISS that provides data and analytics to companies. Investors "will be expecting [JPMorgan] to talk about how it engaged with shareholders and what the company felt it needed to change, if anything."