Jamie Dimon survives investor rebellion at JP Morgan
Activists' proposal to separate chairman and CEO jobs wins fewer votes than last year
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Wednesday 22 May 2013
Shareholders and activists clamouring for greater executive oversight at the helm of America's biggest bank suffered a blow yesterday after a proposal to split the chairman and chief executive roles at JP Morgan was defeated at its annual meeting, attracting fewer votes than last year.
About 32 per cent of shareholders who voted favoured a motion to strip Jamie Dimon, the bank's CEO, of his parallel role of chairman. Last year, a similar proposal received 40 per cent support. There was, however, a sizeable protest vote against a clutch of directors – which could trigger a boardroom shake-up.
Support for the proposal to split Mr Dimon's roles receded despite the "London Whale" trading loss, which emerged ahead of last year's annual meeting, but the full details of which only became known afterwards.
The bank took a hit of about $6bn (£3.9bn) as a result of the botched trades, which triggered regulatory and Congressional scrutiny, management changes and, more recently, a reduction in Mr Dimon's pay package for 2012. The board decided to slash his package to $11.5m, down from just over $23m for 2011.
Shareholders also voted in favour of the re-election of the bank's board of directors, although they lodged protest votes of more than 40 per cent against Ellen Futter, James Crown and David Cote. The three directors sit on the board's risk policy committee. Two of America's most prominent shareholder advisory firms, Glass Lewis and Institutional Shareholders Services, had called on shareholders to vote against the three directors. In a sign that the board may be shaken up, JP Morgan's lead director, Lee Raymond, told shareholders they should "stay tuned" on the composition.
The main winner to emerge from yesterday's annual meeting in Florida was Mr Dimon himself. Ahead of the meeting, reports had indicated that he might contemplate leaving the bank if the proposal to curb his responsibilities had succeeded in winning more than 50 per cent support, even though the motion was non-binding. His success at steering JP Morgan through the financial crisis has won him the admiration and support of many on Wall Street and beyond, including Warren Buffett, the investor who last year mooted his name as a possible replacement for Timothy Geithner at the US Treasury.
Earlier this month, Mr Buffett reiterated his support by saying that he was "one hundred per cent" for Mr Dimon. Now, his success in Florida is likely to cement his position as one of the country's most powerful executives, and comes after JP Morgan engaged in a concerted lobby effort to convince shareholders that he was the right man for both jobs.
In a letter to shareholders ahead of the meeting, Mr Raymond and William Weldon, who heads the JP Morgan board's governance committee, said sufficient mechanisms existed to ensure that Mr Dimon's powers are kept in check.
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