JPMorgan Chase & Co. (NYSE:JPM) board is set to face angry shareholders when they meet Tuesday at Tampa for the annual meeting of shareholders.
Jamie Dimon, Chairman and Chief Executive Officer of JPMorgan Chase & Co. (NYSE:JPM) is facing shareholder revolt as the investors prepare to vote on whether he should be allowed to keep both Chairman and Chief Executive Officer jobs.
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A group of JPMorgan Chase & Co. (NYSE:JPM) shareholders demanded an independent chairman to help protect the bank from a repeat of the London Whale scandal.
The result of vote is non-binding. This implies Jamie Dimon could continue as before. However, earlier reports suggest Jamie Dimon might consider leaving the bank if the shareholders vote to split his duties.
Earlier, two of the largest U.S. proxy advisory firms Institutional Shareholders Services and Glass, Lewis & Company recommended that shareholders vote in favor of a split. The advisory firms’ views found support from California’s public pension system Calpers.
Glass, Lewis & Company, in its proxy report, argues that an independent chairman is better able to oversee the executives of a company and set a pro-shareholder agenda.
In April last year, JPMorgan Chase & Co. (NYSE:JPM) reported a loss of $6.2 billion in a London-based division responsible for using trades to hedge the bank’s overall risk in markets. Bruno Iksil was the trader who was at the heart of the incident. The incident acquired the name ‘London Whale’, as the huge positions that Bruno Iksil took on behalf of JPMorgan were big enough to move markets.
However, Jamie Dimon has support from quite a few investors as well. T. Row Price Group, one of the bank’s top ten investors has publicly supported Jamie Dimon ahead of the shareholder meeting.
Interestingly a similar proposal mooted last year to split the roles got approval from only 40 percent of shareholders, with Blackrock, Vanguard and Fidelity equity funds supporting Jamie Dimon. However they haven’t yet disclosed their strategy for the current year.
According to CNN Money, kicking board members out is rather rare in corporate America with only about one out of every 3,000 corporate directors loses his re-election each year.
Last week, Jamie Dimon received support from Cisco Systems, Inc. (NASDAQ:CSCO) Chairman and Chief Executive Officer as he felt JPM should keep both the posts together.
Shares of JPMorgan Chase & Co. (NYSE:JPM) have been broadly flat since Jamie Dimon assumed the chairmanship in December 2006.