JPMorgan Chase chief executive Jamie Dimon has owned up to stock analysts and gone on TV to accept blame for a $2-billion trading mistake. Next he faces shareholders, who are considerably less wealthy since the blunder was disclosed.
While Dimon may be greeted by some colorful protesters when he arrives for the JPMorgan annual meeting in Tampa, Fla., Tuesday, the shareholders themselves are unlikely to call for his head.
For them, facing the crisis without Dimon might be a bigger nightmare than the trading loss itself.
"When a bank is dealing with this sort of a challenge, you want someone of his caliber to shepherd it through," said longtime JPMorgan shareholder Michael Holland, chairman and founder of money manager Holland & Co.
On Thursday, Dimon disclosed to analysts that the bank had lost $2 billion by making a bad bet with so-called credit derivatives.
Investors lopped almost 10 percent off JPMorgan's stock price the next day, and 3 percent more yesterday. Since Dimon made the announcement, almost $20 billion in market value has evaporated.
During the weekend, Elizabeth Warren, architect of the Consumer Financial Protection Bureau and a Senate candidate from Massachusetts, called for Dimon to give up his board seat at the Federal Reserve Bank of New York.
, White House press secretary Jay Carney, without singling out Dimon, said that Washington can't prevent "bad decisions being made on Wall Street." He pointed out that it was the bank and its shareholders, not bailout-weary taxpayers, who were suffering this time.
The executive responsible for trading strategy at JPMorgan, one of the highest-ranking women on Wall Street, became the first casualty. The bank said Monday that Ina Drew, 55, chief investment officer and a 30-year veteran, would retire and be replaced by Matt Zames, an executive in JPMorgan's investment bank.
Dimon said Drew's "vast contributions to our company should not be overshadowed by these events." He stressed that the company remains "very strong." "We maintain our fortress balance sheet and capital strength to withstand setbacks like this, and we will learn from our mistakes and remain diligently focused on our clients, who count on us every day," Dimon said.
Dimon has built a reputation as a cost-cutting zealot and an expert at keeping risk under control. He led JPMorgan into a stronger position than almost any other bank after the 2008 financial crisis, which brought him more praise than at any other time in his career.
While the $2-billion loss was a stunning figure, JPMorgan is more than big enough to absorb it: The bank made $19 billion last year alone.
But Dimon said on Sunday that the bank had "made a terrible, egregious mistake,"and at the meeting he will be talking to shareholders from a position of weakness for the first time.
Dimon will address shareholders, who will get to ask questions. They will also vote their approval or disapproval of his $23-million pay package from last year. The vote is nonbinding, and Dimon is unlikely to lose it.