Earnings Per Share

12 Months Ended

Dec. 31, 2020

Earnings per share

Basic earnings per share (“EPS”) is calculated using the two-class method. Under the two-class method, all earnings (distributed and undistributed) are allocated to common stock and participating securities. JPMorgan Chase grants RSUs under its share-based compensation programs, predominantly all of which entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to dividends paid to holders of the Firm’s common stock. These unvested RSUs meet the definition of participating securities based on their respective rights to receive nonforfeitable dividends, and they are treated as a separate class of securities in computing basic EPS. Participating securities are not included as incremental shares in computing diluted EPS; refer to Note 9 for additional information.

Diluted EPS incorporates the potential impact of contingently issuable shares, including awards which require future service as a condition of delivery of the underlying common stock. Diluted EPS is calculated under both the two-class and treasury stock methods, and the more dilutive amount is reported. For each of the periods presented in the table below, diluted EPS calculated under the two-class method was more dilutive.

The following table presents the calculation of net income applicable to common stockholders and basic and diluted EPS for the years ended December 31, 2020, 2019 and 2018.


Year ended December 31, (in millions, except per share amounts)	2020		2019		2018
Basic earnings per share
Net income	$	29,131	$	36,431	$	32,474
Less: Preferred stock dividends	1,583		1,587		1,551
Net income applicable to common equity	27,548		34,844		30,923
Less: Dividends and undistributed earnings allocated to participating securities	138		202		214
Net income applicable to common stockholders	$	27,410	$	34,642	$	30,709

Total weighted-average basic shares outstanding	3,082.4		3,221.5		3,396.4
Net income per share	$	8.89	$	10.75	$	9.04

Diluted earnings per share
Net income applicable to common stockholders	$	27,410	$	34,642	$	30,709

Total weighted-average basic shares outstanding	3,082.4		3,221.5		3,396.4
Add: Dilutive impact of SARs and employee stock options, unvested PSUs and nondividend-earning RSUs, and warrants	5.0		8.9		17.6
Total weighted-average diluted shares outstanding	3,087.4		3,230.4		3,414.0
Net income per share	$	8.88	$	10.72	$	9.00