JPMorgan ends ties with proxy advisers and turns to AI

Core Viewpoint - JPMorgan Chase's asset-management division has decided to end its relationship with proxy advisory firms and will now manage shareholder voting internally using AI technology, amid increasing regulatory scrutiny in the proxy advisory sector [1][3]. Group 1: Decision and Implementation - The decision to move away from external proxy advisers is effective immediately and reflects a shift towards internal management of shareholder voting [1]. - JPMorgan's asset-management unit, which oversees assets exceeding $7 trillion, will utilize an internally developed AI platform named Proxy IQ to manage and analyze voting at over 3,000 annual meetings [2]. Group 2: Industry Context - JPMorgan is the first major investment firm to completely eliminate the use of outside proxy advisers, which typically assist with research and logistical support for voting decisions [3]. - The firm had previously indicated a reduction in reliance on proxy advisers for recommendations but now intends to depend solely on its internal stewardship team and technology [3]. Group 3: Regulatory Environment - The proxy advisory sector is facing increased regulatory scrutiny, highlighted by a December executive order from the Trump administration calling for a review of proxy adviser practices [4]. - Following these regulatory developments, proxy advisory firms like Institutional Shareholder Services (ISS) and Glass Lewis have made statements regarding their roles, with ISS asserting that it does not determine corporate governance standards [5].