A Turning Point for Proxy Advisors: JPMorgan’s AI Pivot Amid Intensifying Regulatory Scrutiny

The asset management division of JPMorgan Chase & Co. (JPMorgan) has announced a significant shift in its approach to proxy analysis. Beginning with the 2026 proxy season, JPMorgan will discontinue its reliance on external proxy advisory firms for analyzing shareholder proposals at U.S. public companies. Instead, the firm will deploy an internal, artificial-intelligence-powered platform, Proxy IQ, to aggregate and analyze proxy data from approximately 3,000 annual company meetings. JPMorgan characterizes this move as a pioneering step, positioning itself as the first major investment firm to transition away from traditional proxy advisory services.

This strategic shift aligns with the long-standing criticisms voiced by Jamie Dimon, Chairman and Chief Executive Officer of JPMorgan, regarding Institutional Shareholder Services (ISS) and Glass Lewis & Co., LLC (Glass Lewis). These two leading proxy advisory firms collectively control an estimated ninety percent (90%) of the proxy advisory market. Dimon has publicly articulated a critical stance on the role and influence of these firms, making JPMorgan’s decision to discontinue their use consistent with his previously stated position.

Current Environment

JPMorgan’s decision underscores the escalating scrutiny and pressure on proxy advisory firms within the current regulatory and market landscape.

Specifically, on December 11, 2025, President Trump issued an Executive Order titled “Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors.” This Executive Order directly targeted ISS and Glass Lewis, criticizing them as “foreign-owned” and accusing them of using “their substantial power to advance and prioritize radical politically-motivated agendas.” Critically, the Executive Order authorizes the Secretary of Labor to potentially classify proxy firms as fiduciaries under the Employee Retirement Income Security Act of 1974, as amended (ERISA), when providing recommendations to pension funds and other ERISA-covered retirement plans. This potential reclassification carries significant compliance implications.

Complementing the President’s Executive Order, the first half of 2025 was marked by multiple congressional inquiries, including meetings held by the Subcommittee on Capital Markets of the House Committee on Financial Services and the House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust, all focused on proxy advisory firms. Concurrently, several states, including Texas, have initiated actions against these firms. Moreover, a November 12, 2025 Wall Street Journal report disclosed that the Federal Trade Commission (FTC) is investigating ISS and Glass Lewis for potential antitrust violations. This FTC investigation reportedly scrutinizes whether the firms have leveraged their market dominance to impose specific governance positions or to unduly restrict clients’ voting independence. Should the FTC pursue enforcement, it could mandate significant structural changes, such as separating research functions from voting recommendations or unbundling services.

In response to these mounting pressures, both ISS and Glass Lewis have actively sought to reinforce their value and credibility. ISS has released statements defending its independence and research rigor, while emphasizing compliance efforts and engagement with policymakers and clients. Notably, in October 2025, Glass Lewis publicly announced a shift in its approach, committing to increased methodological transparency and expanded stakeholder engagement to address concerns regarding bias and influence. Its subsequent December 2025 methodology changes, moving toward customized client voting frameworks and away from standard “benchmark” policies, further underscore a recognition by market leaders of the limitations of a uniform, one-size-fits-all approach.

What This Means for Issuers

JPMorgan’s transition is far more than a symbolic gesture. As one of the world’s largest asset managers, holding significant voting stakes across thousands of public companies, its adoption of an internal AI-driven platform is poised to materially influence how institutional investors evaluate critical areas such as say-on-pay disclosures, board composition, and governance proposals, beginning with the 2026 proxy season. Given ISS and Glass Lewis’s historical near-duopoly, their methodology shifts have traditionally exerted disproportionate influence on shareholder voting outcomes. JPMorgan’s departure, and the potential for other major asset managers to follow suit, signals a fracturing of this long-standing consensus. This evolving landscape presents both significant risks and strategic opportunities for companies as they prepare for the 2026 proxy season.

Combined with the Executive Order, ongoing investigations, and litigation, JPMorgan’s action collectively signals a profound shift in the proxy advisory landscape. The escalating scrutiny from regulators, lawmakers, and influential market participants such as JPMorgan indicates that the traditional role and influence of these firms are undergoing unprecedented reevaluation.

The potential reclassification of proxy advisors as ERISA fiduciaries remains a particularly important potential development. If this is implemented, ISS and Glass Lewis would be required to adhere to specific governance standards and to demonstrate that their voting recommendations are predicated solely on participants’ financial interests. This “strict financial interest” standard has garnered criticism from those who argue that the firms’ current methodologies may conflate financial materiality with broader environmental, social, and governance (ESG) priorities. The inherent uncertainty surrounding this potential reclassification alone could further accelerate client defections, mirroring JPMorgan’s recent move.

As a result, companies that have relied on a singular “proxy advisor playbook” will need to proactively recalibrate their approaches. Below are some proposed action steps:

• Map Your Shareholder Base. Proactively identify which of your significant institutional holders (by shares and influence) may be transitioning away from traditional proxy advisors or adopting their own AI-driven voting frameworks. While the numbers do not yet indicate a majority, this trend is growing.
• Revisit Your Proxy Narrative. Shift focus from exclusively catering to ISS and Glass Lewis methodologies. Instead, prioritize clarity, materiality, and a compelling narrative about pay-for-performance and governance that resonates with direct investor engagement and is adaptable for emerging AI-driven voting platforms, which may prioritize different data points.
• Prepare for Policy Fragmentation. As investors adopt increasingly divergent voting frameworks, a single governance or executive compensation practice may no longer yield uniform shareholder outcomes. Be prepared to engage multiple constituencies with tailored messaging and adaptable strategies.

• Monitor Regulatory Developments. The Department of Labor (DOL), the Federal Trade Commission (FTC), and the Securities and Exchange Commission (SEC) are all actively reviewing aspects of the proxy advisory ecosystem. Changes to proxy advisor standards, ERISA fiduciary status, or disclosure rules could significantly reshape the landscape midstream, requiring timely adaptation.