Sunday, May 27, 2018
Business

With nary a scratch, JPMorgan Chase CEO Jamie Dimon survives annual shareholder meeting

Maybe Dimons are forever.

JPMorgan Chase CEO Jamie Dimon slid through Tuesday's annual shareholder meeting in Tampa as if he was coated with Teflon. He suffered a few scoldings from investors upset over the bank's recent $2.3 billion trading loss involving complex derivatives. But he evaded the verbal pummeling and shareholder blowback a bank executive of lesser stature might have received.

Nobody inside the highly secured investors' meeting called for his ouster. Shareholders even rejected a proposal to weaken Dimon's power by splitting his two titles, CEO and chairman, with another person.

Nobody could hear the few dozen protesters, outside chanting "hey hey ho ho, big banks have got to go," far from shareholders.

While some shareholders complained about the bank's trading loss, first disclosed last week, others used their chance to speak directly to Dimon, 56, and the board of directors to address other concerns. They ranged from the bank's poor handling of home foreclosures to investing in companies that contribute to genocide in Sudan.

Before making prepared comments to a few hundred shareholders and employees, Dimon volunteered that the $2.3 billion trading loss was "poorly vetted," reflected "flawed" oversight and "never should have happened."

Said Dimon, the bank's CEO since 2005: "I can't justify it."

Some media wags say Dimon is on an "apology tour." Maybe. But the CEO's "we messed up" message appeals to many who are tired of hearing executives deflect responsibility with "It's not my fault."

Being forthright, however, has its limits. What wasn't disclosed during Tuesday's meeting was the news that the Justice Department has opened an inquiry into the bank's trading loss, and that the Federal Bureau of Investigation's New York field office is leading the inquiry.

The probe was first reported by the Wall Street Journal citing unnamed sources. One question sure to be asked is: What did Dimon know of the loss and when did he know it?

The Securities and Exchange Commission also is investigating whether the bank broke any laws.

At Tuesday's meeting, many bank shareholders came seeking reassurance, not only about the big trading loss but about the bank's stock price. Shares of JPMorgan Chase plummeted late last week on the news of the trading loss. Shares are down 11 percent since then with more than a $15 billion loss in market value. Shares rose Tuesday by 1.26 percent to close at $36.24.

Tampa lawyer John Grandoff III, a partner at Hill Ward Henderson and a bank shareholder, stood and delivered a compliment to Dimon's leadership. "I think you are doing a fabulous job," he said.

Losing money — even $2.3 billion by a $2.3 trillion bank — isn't a crime, Grandoff said after the meeting. Putting Washington further in charge of deciding what is risky and what is not at banks would be a mistake, he suggested.

On the flip side, if a bank and a CEO as well regarded as JP Morgan Chase and Dimon can slip up, how many lesser banks may be making riskier and perhaps larger complex trading bets that might backfire and force another federal bailout?

Contact Robert Trigaux at [email protected]

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