UPDATE: According to CNBC, the vote to split the CEO and chairman roles was defeated in a narrow vote. More updates to come.
At the bank’s annual shareholder meeting last year, 40% of shareholders voted to strip Dimon of his chairman role. They’ll gather today in Tampa, FL to cast ballots on four separate proposals, the biggest one being Dimon’s future at the firm.
AFSCME, a union group, the New York City Comptroller's Office and other fund managers have been lobbying shareholders to split the position. Andrew Ross Sorkin, co-host of CNBC’s “Squawk Box” and editor of The New York Times’ DealBook blog, says Tuesday’s vote to break up the CEO and chairman titles will be “tight” but it may not be in shareholders’ best interest to relieve Dimon of his chairmanship duties.
“If you’re a long-term shareholder in JPMorgan you want Jamie to be there for at least for some period,” Ross Sorkin says in an interview with The Daily Ticker. A vote could “hasten [Dimon’s] departure from the firm within two or three years.”
Ross Sorkin points out that even if shareholders voted overwhelming to replace Dimon as chairman, the vote is ultimately nonbinding. Board members will have the final say on Dimon’s tenure and they’re reluctant to shake things up, he adds.
JPMorgan has greatly outperformed its banking counterparts over the last few years. The biggest U.S. bank by assets emerged from the financial crisis relatively unscathed and shares of JPMorgan have gained 32% since Dimon assumed the CEO and chairman roles. Dimon’s leadership and reputation did come under attack after last spring’s “London Whale” debacle in which the bank lost $6 billion from risky credit default swaps. Ross Sorkin does not dispute that there may be a political element behind Tuesday’s vote.
“People are frustrated with the way [Dimon] has approached regulators,” Ross Sorkin says. “Some people are making this a referendum on Jamie Dimon.”
Would Dimon leave the bank, as he alluded to in a recent Wall Street Journal interview, if shareholders decided to separate the two roles?
Not likely, argues Ross Sorkin.
“It’s very hard to just take your ball and go home," Ross Sorkin says. “He did build this institution.”
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