Jamie Dimon is winding down his stock holdings in JPMorgan for the first time ever. In a filing with the US Securities and Exchange Commission (SEC), the bank CEO plan to sell 1 million shares—worth nearly $140 million at today’s price—starting next year.
The news has tea-leaf readers wondering if the 67-year-old banking executive is priming for retirement. In a note, Wells Fargo’s analyst Mike Mayo suggested, “This is a reminder that the CEO is getting closer to retirement...he has 3.5 years left on his 5-year plan as CEO.”
Mayo had asked Dimon during JPMorgan’s May Investor Day how many more years he had planned to stay on as CEO, to which Dimon replied three and a half years. The analyst comments also follow yesterday’s announcement of Morgan Stanley CEO James Gorman stepping down next year.
Still, Dimon has skin in the game.
Even after the sale, Dimon and his family will continue to hold over $1.2 billion worth of stocks (8.6 million shares), along with 561,793 shares in stock linked to his performance and 1.5 million stock appreciation rights that can be exercised in 2026.
This comes after Dimon’s bearish outbursts on next year’s economic outlook earlier this week at the Riyadh summit, where he slammed central banks for being “100% dead wrong” about economic forecasts last year and warned that “this may be the most dangerous time the world has seen in decades.”
Why is Dimon selling his company shares?
The SEC filing said Dimon and his family want to sell their holdings for “financial diversification and tax-planning purposes.” Any investor, the logic goes, would want to spread their portfolio risk, rather than concentrate it in any one stock.
In addition to his attempt to minimize any appearance of potentially front-running the market, or trading ahead with knowledge information not disclosed to the public, Dimon will trigger SEC rule 10b5-1 to sell the shares. The rule allows corporate insiders to sell on the basis that they have an established plan with set share prices, amount, and transaction date.
Mayo also noted Dimon’s family could hold on to the low basis stock until his death, at which point they could “step-up” the cost basis. Low basis stock are shares acquired that has appreciated over time, resulting in a high tax bill if sold, so in becoming eligible for step-up, heirs can raise the basis value to the higher price to minimize tax consequences.
Heirs can also simply hold onto the stock. Dividends alone provide an estimated $30 million a year in income, according to Mayo. In any case, Dimon’s family’s future is looking rosy.