JPMorgan ends ties with proxy advisers and turns to AI

JPMorgan Chase’s asset-management limb has ended its narration with proxy advisory firms, moving to oversee shareholder voting internally with AI technology, reported the Wall Street Journal.

The determination applies instantly and comes arsenic regulatory scrutiny increases astir the proxy advisory sector.

Managing assets exceeding $7tn, JPMorgan’s asset-management concern indispensable formed votes connected behalf of clients astatine thousands of shareholder meetings annually.

This proxy season, the portion volition deploy an internally developed AI level known arsenic Proxy IQ to assistance negociate and analyse voting astatine US companies, the quality work added.

According to an interior memo viewed by The Wall Street Journal, Proxy IQ volition grip ballot absorption and investigation of information from much than 3,000 yearly meetings, producing recommendations for portfolio managers.

The memo states JPMorgan is the archetypal large concern steadfast to wholly destruct its usage of extracurricular proxy advisers, which typically supply probe and logistical enactment for voting decisions.

The steadfast had antecedently indicated it would discontinue utilizing specified advisers for recommendations but present intends to trust solely connected its interior stewardship squad and technology.

Proxy advisory firms specified arsenic Institutional Shareholder Services (ISS) and Glass Lewis assists concern institutions with the complexities of proxy voting.

In December, a Trump medication enforcement bid called for a regulatory reappraisal of proxy advisor practices.

JPMorgan CEO Jamie Dimon has been captious of the industry, describing proxy advisers arsenic “incompetent” successful comments made astatine an manufacture lawsuit past year, the study said.

Following regulatory developments, ISS stated past period that it does not find firm governance standards and that clients clasp afloat discretion implicit their decisions.

Glass Lewis besides precocious announced plans to halt offering wide distributed benchmark recommendations by 2027, alternatively focusing connected providing tailored proposal to idiosyncratic clients.

"JPMorgan ends ties with proxy advisers and turns to AI " was primitively created and published by Private Banker International, a GlobalData owned brand.

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