The days seem numbered for Jamie Dimon’s dual role of chairman and chief executive at JPMorgan. It’s about time.
Last year investors were unable to break up his role, narrowly losing in a proxy, but this year more shareholders have joined the battle. A coalition of the employee pension fund of the American Federation of State, County and Municipal Employees (AFSCME), the Connecticut Retirement Plans and Trust Funds, Hermes Equity Ownership Services, and the New York City pension funds announced in February that they want the issue added to the resolutions to be voted on at the annual shareholder meeting.
Last year JPMorgan argued that split roles were unnecessary as the bank had independent directors. Now, in the shadows of a $6.2 billion loss from the London Whale trading fiasco, such arguments are met with tumbleweed.
Even the firm’s internal report into the trading loss indicated that Dimon could have benefited from an extra pair of hands. It said that managers, including Dimon, were not aggressive enough with their responses to the losses. That’s being kind. Let’s just recap – Dimon was both chairman and chief executive while the firm lost $6.2 billion.
Even if the shareholders do vote to split the role, Dimon has the right of veto. Such a move would send shockwaves through the industry but would not be surprising from the man who had a profile in Vanity Fair, appeared on the Charlie Rose show, and who has seemingly done his best to make sure any popular contender to his empire does not stick around too long. Just take the highly regarded Bill Winters, who was ousted by Dimon in 2009. Or Jes Staley, who Dimon promoted to replace Winters but who then left the firm last year.
It is not in the best interests of JPMorgan to get rid of talented senior executives. Dimon has tried to create a one-man show that he is able to micro-manage in his two roles to ensure his brand remains protected. No other bank on Wall Street has so much on the shoulders of just one executive. It’s a risk, as last year’s trading loss proved.
So should Dimon’s role be split? Absolutely. It is JPMorgan, not JP Dimon, which Dimon seems to forget on a regular basis.