NEW YORK: JPMorgan Chase shareholders yesterday rejected a proposal to split the chairman and chief executive roles, handing bank chief Jamie Dimon a big victory.
The shareholder proposal to split his two roles won just 32.2 percent of votes cast, according to preliminary results released at the bank’s annual meeting in Tampa, Florida. Shareholders at the nation’s largest bank by revenues also reelected the entire JPMorgan board, although some board members won by slim majorities.
The much-anticipated annual meeting was the first since the full scope of the bank’s $6.2bn 2012 London trading loss became known.
Shareholder activists argued that the trading loss—nicknamed the London whale for one of the key traders involved — demonstrated the need for an independent chairman as a check on Dimon.
JPMorgan countered that its aggressive investigation and follow-up to the loss, which included slashing Dimon’s pay, showed strong oversight. In addition, the company pointed to its record profits and strong performance in the stock market as further reasons to reject the proposal. A similar shareholder proposal received 40 percent of the vote last year.
While the vote amounted to a stronger-than-expected endorsement of Dimon, the outcome suggests some changes to the board could be forthcoming. Companies sometimes dump directors who are reelected by slim margins.
Three members of the board’s embattled risk-policy committee received far lower vote totals than the other board members. David Cote garnered 59.3 percent of the vote, James Crown won 57.4 percent and Ellen Futter obtained 53.1 percent. All other board members received more than 90 percent of the vote.
Leading proxy advisory services ISS and Glass Lewis had recommended votes against the three risk committee members, along with supporting the shareholder measure to split the chairman and chief executive roles.
The advisory services argued that the risk committee did a poor job of overseeing the trades in the London whale debacle. JPMorgan countered that the risk committee consisted of the same board members who led the bank through the dark days of the 2008 financial crisis. Some shareholders who spoke at the meeting sharply questioned Dimon and presiding director Lee Raymond on the qualifications and effectiveness of the risk committee members.
AFP
