It is not hard to see why Jamie Dimon owns a lot of shares in JPMorgan Chase. He is the bank’s boss and its shareholders want his interests to be aligned with theirs. Paying him mostly in stock, rather than cash, helps ensure that they are. An executive with a significant proportion of savings invested in their firm’s shares has tied their future to the company’s. This discourages them from doing things that might pad their wallets in the short term at the expense of shareholders’ long-term returns, such as expanding the firm unsustainably fast. The incentives are stronger still if—as with Mr Dimon—the boss is promised shares for delivery some time hence, or if any sales prompt newspaper headlines.
