Jamie Dimon, CEO and Chairman of JPMorgan Chase (JPM), will find himself in the hot seat this week when the company’s shareholders are expected to vote on whether or not he should keep both of his roles at the bank.
Just over one year ago the world's largest bank revealed that it had lost $6.2 billion in the London Whale scandal. The controversy involved a trader in the UK making outlandish bets on complicated debt packages with little to no oversight.
Dimon apologized for the banks mistake and testified in front of congress, the chief of investments was replaces and other top officials were rearranged. Now Dimon may lose his chairmanship as well.
Last year, 40% of shareholders voted to strip Dimon of his title. This year representatives from the New York City Comptroller's office and the union group AFSCME will attend the meeting to try to sway more shareholders against Dimon's dual role.
"Even a Master of the Universe can be swallowed by a London Whale," commented AFSCME president Lee Saunders referencing Tom Wolfe's Bonfire of the Vanities, which documents the harrowing fall of an once elite banker.
Howard Davidowitz of Davidowitz & Associates sees things differently. "I think the smartest thing that everybody could do is kiss Jamie Dimon’s butt," he tells The Daily Ticker's Lauren Lyster. “This guy is the most effective leader of a bank in the United States.”
"In my business, we judge people by results. Bottom line results…here’s how you judge risk management, how good or bad are the bank's returns?" he says.
Though Davidowitz believes that the chairman and CEO roles should often be separated it works in this case, "I think as a theory and in practice it might be a good idea to split the Chairman and CEO roles" he says, “but if you’ve got a Jamie Dimon, the first thing you do is everything you can to keep him happy.”
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