The days seem numbered
for Jamie Dimons dual role of chairman and chief
executive at JPMorgan. Its about time.
Last year investors were
unable to break up his role, narrowly losing in a proxy, but
this year more shareholders have joined the battle. A coalition
of the employee pension fund of the American Federation of
State, County and Municipal Employees (AFSCME), the Connecticut
Retirement Plans and Trust Funds, Hermes Equity Ownership
Services, and the New York City pension funds announced in
February that they want the issue added to the resolutions to
be voted on at the annual shareholder meeting.
Last year JPMorgan argued
that split roles were unnecessary as the bank had independent
directors. Now, in the shadows of a $6.2 billion loss from the
London Whale trading fiasco, such arguments are met with
Even the firms
internal report into the trading loss indicated that Dimon
could have benefited from an extra pair of hands. It said that
managers, including Dimon, were not aggressive enough with
their responses to the losses. Thats being kind.
Lets just recap Dimon was both chairman and chief
executive while the firm lost $6.2 billion.
Even if the shareholders
do vote to split the role, Dimon has the right of veto. Such a
move would send shockwaves through the industry but would not
be surprising from the man who had a profile in Vanity Fair,
appeared on the Charlie Rose show, and who has seemingly done
his best to make sure any popular contender to his empire does
not stick around too long. Just take the
highly regarded Bill Winters, who was ousted by Dimon in
Jes Staley, who Dimon promoted to replace Winters but who
then left the firm last year.
It is not in the best
interests of JPMorgan to get rid of talented senior executives.
Dimon has tried to create a one-man show that he is able to
micro-manage in his two roles to ensure his brand remains
protected. No other bank on Wall Street has so much on the
shoulders of just one executive. Its a risk, as last
years trading loss proved.
So should Dimons role be split? Absolutely. It is
JPMorgan, not JP Dimon, which Dimon seems to forget on a