An estimated 22,000 JPMorgan Chase employees will get 10% average pay increases in a five-year, $20 billion investment plan spurred by a windfall from the federal tax overhaul, the bank said Tuesday.
The New York-based bank also said it will open branches in new U.S. markets, boost its small-business lending by $4 billion, increase mortgage lending in low- and moderate-income communities and raise community-based charitable investments by 40% to $1.75 billion over five years.
The announcement is the latest by U.S. companies that have unveiled investment and spending plans prompted by the December action by Congress and the Trump administration to cut the top corporate tax rate from 35% to 21% and make other changes to help the nation's business industry.
"Having a healthy, strong company allows us to make these long-term, sustainable investments," Jamie Dimon, the bank's chairman and CEO, said in a formal announcement. "We are excited about further investing in our outstanding workforce and expanding into new U.S. markets."
In a similar announcement, The Walt Disney Company on Tuesday said more than 125,000 of its eligible employees would receive a $1,000 one-time cash bonus. U.S.-based workers who have been with the entertainment and media giant since Jan. 1, 2018 will get the bonus in two payments this year, in March and in September, the company said.
Disney will also make an initial $50 million investment in a continuing education program aimed at covering tuition costs for hourly employees. The company said it plans to provide up to $25 million in additional annual funding going forward.
JP Morgan's plans for increased investment and spending fueled by the tax cuts comes the week after JPMorgan reported strong fourth-quarter loan growth. Although the bank said then it would take a $2.4 billion one-time charge related to the sweeping overhaul, Dimon said the lower business tax rate would make U.S. companies "more competitive globally."
JPMorgan, the nation's largest bank by assets, said it is increasing and accelerating the speed of hourly wages for many of its employees. Effective Feb. 25, salaries will rise from between $12 per hour and $16.50 per hour to between $15 per hour and $18 per hour in more than 100 cities, depending on the local cost of living.
For instance, wages for New York City, San Francisco, Boston and Jersey City employees of the bank will jump to $18 per hour, while workers in Chicago, Detroit, and Wilmington, Del., will see their salaries rise to $16.50 per hour, the bank said.
In a move aimed at reducing the impact of medical expenses, JPMorgan said the bank will reduce its medical insurance deductibles by $750 per year for employees who earn less than $60,000.
JPMorgan's previously announced annual award of $750 for eligible employees will be paid this month, the bank said.
On the community expansion front, JPMorgan plans to open as many as 400 new branches over the next five years, with the new locations employing approximately 3,000 people, the bank said.
JPMorgan also plans to open locations in 15 to 20 new markets during the next five years. The bank currently has 5,130 branches in 23 states. Despite being a leading banker in those states, JPMorgan as yet hasn't been in such major markets as Boston and Philadelphia and Washington, D.C.
The plans for increased charitable spending will be based on JPMorgan's $150 million investment in Detroit's economic recovery, the bank said. The company said it recently announced a $40 million investment plan for Chicago's south and west sides, as well as a $10 million investment in Washington, D.C.'s underserved neighborhoods.
Along with increasing lending to small businesses, JPMorgan said it would hire 500 new bankers to support local firms in areas already served by the bank. The effort is projected to achieve a $4 billion increase in small business lending over three years.
In moves designed to speed lending for affordable housing, the bank said it plans to hire 500 new home lending advisers and raise its lending commitment in low- and moderate-income communities by 25% to a total of $50 billion during the next five years.
Additionally, JPMorgan said it would raise home-ownership grants by nearly 70%, from $1,500 to $2,500, for customers in low- and moderate-income communities.
Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc