Maybe this was the tempest in a teapot. After weeks of debate over whether Jamie Dimon should, or even could, keep his dual roles as chairman and chief executive of JPMorgan, shareholders have spoken. In the end, only 32 per cent supported a proposal to install an independent chairman, even less than the 40 per cent who voted in favour of a similar proposal last year. The $6bn that the London Whale scandal cost the bank, the questions it raised about risk oversight and the allegations of misleading regulators and investors were not sufficient to sway shareholders’ belief in Mr Dimon’s long-term performance.
The vote was non-binding but, if a majority had wanted an independent chairman, JPMorgan would certainly have been under pressure to act. So much so that rumours circulated that Mr Dimon might have left outright if the vote had gone the other way. While there seemed to be mixed opinions about whether having a separate chairman was a good idea, at least in principle, there was pretty quick consensus that the risk of losing Jamie was not. CLSA, for example, estimated that JPMorgan’s market value would decline by $20bn, or just over 10 per cent. Ironically, such a reaction indicates that Mr Dimon may indeed be too powerful. Or, if so much still rides on a single person, that banks are still too fragile. Or both.
Teapot or not, the vote created enough waves that JPMorgan might have to do something. The board looks vulnerable. More than 40 per cent of shareholders voted against three members of the bank’s risk committee. And one of them was conspicuously absent from the meeting. Both JPMorgan’s board and management are implicated in the Whale debacle (and presumably responsible for the bank’s long-term success) but board members are clearly more expendable.