Tuesday, December 12, 2017
Business

Shareholders reject splitting CEO/chairman roles at JPMorgan Chase meeting in Tampa

TAMPA — National media who cover the financial markets' epicenter in New York descended on JPMorgan Chase's annual meeting Tuesday in Tampa in search of a great shareholder showdown. A dozen security officers checked and rechecked cars entering the company's east Tampa office park.

It was billed as a pivotal moment in corporate governance, one that could set a precedent for going toe-to-toe with the most powerful chieftains on Wall Street.

Instead, it fizzled into a nonevent.

Unlike previous meetings, there were no organized protests outside and few surprises inside the two-plus-hour event. And, for JPMorgan Chase chairman and CEO Jamie Dimon, arguably the most powerful banker in the country, there was no need to worry.

A much-hyped motion to force Dimon to give up his title as board chairman garnered only 32 percent of the vote, far shy of what many were predicting and even less than the 40 percent the measure drew last year.

"I was a little bit surprised it didn't get a higher vote … but a third of shareholders (in support) isn't insignificant," said Lisa Lindsley of the AFSCME union, which introduced the motion to split chairman and CEO duties. It was an uphill fight, Lindsley indicated, considering "the resources and pressures that the management and the board of JP­Morgan brought to bear on shareholders and really pulling out all the stops in terms of political pressures and business relationships."

Activists have tried to get Dimon to give up the dual role four times before. But this year was different. Dimon's reputation as a Wall Street wunderkind took a hit after a massive trading blunder. Dimon on Tuesday apologized once more to shareholders for lack of oversight of a Chase trader known as the "London Whale," whose bad bets cost the bank more than $6 billion.

But Dimon insisted the company should not be defined by that loss but rather how as a financial titan with $2.4 trillion in assets it has performed overall. The megabank reported record profits for the third consecutive year, along with rising stock prices. While the meeting was under way, JPMorgan stock was trading above $53 a share, its highest level since 2007.

The JPMorgan Chase board, arguing against the proposal, has said that the company already ensures oversight through the rotating appointment of a presiding director. Other than Dimon, all other directors are independent, including the current presiding director, retired Exxon Mobil chairman and CEO Lee Raymond.

Raymond rebuffed criticism that he and other board directors aren't willing to challenge Dimon. "You don't get to (these) leadership positions by being a wallflower," he said.

Raymond called finding a successor for the 57-year-old Dimon a top priority, one given even more importance following some recent departures in upper management. He gave no timetable for succession, however, saying only, "I hope that time is much in the future. … I have no illusion we will be able to clone Jamie."

More than 20 shareholders spoke, many critical of Chase on a wide range of topics: mortgage foreclosure abuses; investing in companies that help fund genocide; the meltdown of the auction rate securities market; Chase's refusal to say how it spends its lobbying dollars.

Chase was slow to build a presence in Florida consumer banking until it bought Washington Mutual's branch network in 2008. Chase has since grown to about 340 branches statewide with more than 17,000 employees in Florida.

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