CEO Jamie Dimon Keeps Chairmanship at Shareholders Meeting

on May 22, 2013

At JPMorgan Chase’s annual shareholders meeting on Tuesday, May 21, chief executive Jamie Dimon prevailed against shareholder activists looking to strip him of his chairmanship of the bank. Investors however showed their dissatisfaction with the management by only barely re-electing three directors who oversaw a $6.2 billion (₤4.09 billion) trading loss last year attributed to “London Whale” Bruno Iksil.

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The proposal to split the chairman and chief executive duties received support from only 32 percent of the votes, down from 40 percent last year. The result put an end to a threat that Dimon might leave and
JPMorgan’s share price rose 1.4 percent in New York to close at a six-year high. The stock climbed an
additional 0.15 percent to $53.10 in afterhours trading on Tuesday.

Dimon had shown shareholders that JPMorgan could shake off the London Whale loss and still report a record annual profit, Portales Partners analyst Charles Peabody said on Bloomberg television. “There are certainly warts and criticisms, and I’ll be the first to point them out,” said Peabody, who has a sell recommendation on the bank’s stock after its recent advances. “But I think he’s done a great job.”

Among big-bank chief executives, Jamie Dimon ranks first for equity returns and for delivering a robust balance sheet with no quarterly losses. Some investors nevertheless believed that Dimon could use more oversight by installing an independent chairman at the largest U.S. bank to improve accountability. Proxy advisers at Institutional Shareholder Services and Glass Lewis & Co had advised investors to vote for splitting the two roles as well as ousting some directors. However, when reports surfaced that Dimon might quit the bank if he is stripped of the chairmanship, Tuesday’s vote became a choice between keeping things as they are or having to look for a new chief executive. Another factor that helped Dimon was that he has no obvious successor at the bank, so taking action that might drive him away was viewed as highly risky.

Instead, investors at the meeting turned their frustration with the 2012 trading loss toward three of the bank’s independent directors – David Cote, James Crown and Ellen Futter. Futter, who is also the president of the American Natural History Museum, was barely re-elected to the board with a 53.1 percent support. As a member of the risk committee she has been criticised for alleged failures over the London Whale loss. Futter didn’t attend the AGM on Tuesday with no explanation offered for her absence. David Cote, CEO of Honeywell, received 59.3 percent of the votes and James Crown, president of Henry Crown and Company – 57.4 percent.

!m[JPMorgan’s Share Price Climbs as Threat of Dimon Leaving Dissipates](/uploads/story/2428/thumbs/pic1_inline.png)
A board shake-up is expected, though not right away, according to sources close to the bank quoted by The Wall Street Journal. “A no vote north of 40% is a vote of no confidence,” said William Patterson, emeritus executive director of CtW Investment Group, which represents pension funds with approximately six million shares ownership in JPMorgan. “A divided shareholder vote is not a mandate.” Lee Raymond, JPMorgan board’s presiding director, told shareholders on Tuesday to “stay tuned” for potential changes to the makeup of the risk committee.
**JPMorgan share price was $53.10 as of 22.05.2013, 08.00 GMT.**


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