JP Morgan chief given a boost before vital vote on job-split
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.
Saturday 18 May 2013
JP Morgan Chase shareholders are being asked to vote against a proposal that calls for a splitting of Jamie Dimon's dual role as the giant American bank's chairman and chief executive. The motion will be put to a vote at the annual meeting on 21 May.
If the proposal succeeds, it would constitute a personal blow to Mr Dimon. His stewardship of the bank during the financial crisis won him many admirers on Wall Street. But the so-called London Whale trading debacle, which left the bank with losses in excess of $6bn (£4bn), triggered intense regulatory scrutiny of the bank's governance structure. It has also refocused attention on Mr Dimon's powerful position at the bank. Earlier this year, the bank's directors slashed his pay package by around 50 per cent for 2012, citing the fallout from the trading scandal.
The letter to investors, which was disclosed in a regulatory filing on Thursday, reiterates the bank's position that shareholders should both back Mr Dimon's dual role and the re-election of all members of the board's policy and audit committee at the annual gathering on Tuesday. Glass, Lewis, a prominent shareholder advisory firm, has called for the appointment of an independent chairman and said investors should oust most of the bank's board. In a report published earlier this month, it said shareholders should vote to replace six of the bank's 11 directors, including three on the risk committee and three on the audit committee. Another advisory group, Institutional Shareholder Services, has also backed the splitting of Mr Dimon's roles, and said three directors on the board's risk committee should be replaced.
Reports have suggested that support for the proposal to split the role is running slightly ahead of the backing a similar motion received last year. But Mr Dimon received a boost earlier this week when one of the bank's largest institutional shareholders seemed likely to endorse his position: one of the equity funds of T Rowe Price Associates backed his dual roles, suggesting that other funds may also support his position. Overall, T Rowe Price funds hold around 2 per cent of the bank's shares.
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