JPMorgan Chase & Co. (NYSE:JPM) Chairman and CEO Jamie Dimon said today that he might quit if the company decides to split his two roles. Now Forbes staff writer Halah Touryalai reports that one analyst believes the bank’s stock will decline 10 percent if he ends up leaving.
JPMorgan: To Split Or Not To Split?
An influential proxy advisor recommended voting Dimon out of the chairman position last week in the wake of the London Whale trading incident. Calpers and other shareholders came out in support of splitting the roles just days later, although the directors of the board are urging shareholders to vote against splitting Dimon’s roles. We are now about a week away from JPMorgan Chase & Co. (NYSE:JPM)’s annual shareholder meeting, which will decide Dimon’s fate in relation to the chairman position.
Touryalai focused on CLSA analyst Mike Mayo’s three main reasons he’s predicting that JPMorgan shares will decline if Dimon leaves. He points out that Dimon is tops among his peers in terms of generating stock price returns under his direction.
In addition, there’s no clear successor to Dimon, so finding a replacement would be very difficult and could be time-consuming. Also changing the bank’s CEO would just add increase the difficulties involved in changing up operations and other management, if the decision is made to replace them too.
Of course the London Whale trading incident was a major disaster, so it makes sense that shareholders will think carefully about pushing Dimon out as chairman. But unfortunately this may mean tossing Dimon out completely, which as Mayo explains, might not be in shareholders’ best interest.
