JPMorgan's Dimon survives referendum
Shareholders of JPMorgan Chase voted Tuesday to let Jamie Dimon keep both the chairman and chief executive roles, but they signaled that the bank needed better oversight, giving only narrow approval to three of the bank's board members.
It was a mixed verdict in a closely watched test of corporate governance at U.S. companies. Dimon emerged in a stronger position after the proposal to split his roles won just 32 percent of the shareholder vote, less than the 40 percent a similar proposal got last year.
But the tepid support for the three directors came as a rebuke of the bank following a surprise $6-billion trading loss JPMorgan suffered last year.
Prominent shareholder advisory firms had urged JPMorgan shareholders to withhold their support for those directors, who served on the bank's risk policy committee at the time of the loss.
JPMorgan was an unusually strong company to be targeted by shareholder activists. It has been turning in record profits, and its stock price is at a 12-year high. Dimon has been widely praised for his astute stewardship of the bank through the 2008 financial crisis, though his reputation has been tarnished since the trading loss, which seems to have caught him flat-footed, came to light.
Dimon, speaking after the vote, said the bank was taking the feedback from the bank's shareholders "very seriously."
The outcome was a disappointment to the shareholder groups that had lobbied to split the chairman and chief executive roles.
A "yes" vote would have served as a request to the bank to strip Dimon of his role as chairman of the board and have someone from outside the company do the job. Since CEOs answer to their boards of directors, headed by the chairman, the thinking goes that having the roles split would result in greater accountability for the chief executive.
Dimon called the London trading loss "extremely embarrassing." He promised that the bank was overhauling priorities and fixing practices that regulators were concerned about.