Stanford Graduate School of BusinessAfter surviving a vote on whether or not he should keep his dual role as CEO and Chairman of the largest bank in the U.S., Jamie Dimon gave a super positive speech about JP Morgan to a room full of shareholders.
The speech had a warm, Mighty Ducks victory kind of feel to it, but it didn’t stop shareholders from voicing support for the measure to split Dimon’s role immediately after he spoke. It’s number six on a laundry list of proposals to be considered at the meeting.
But first, Dimon’s speech.
You have to admit, JPM is a massive force. Dimon cited its $97 billion in revenue, $1.8 trillion in credit or capital lent, 1 million mortgages issued… the list goes on.
That said: as Dimon said halfway through his speech, “There are a few things that occurred this year that we’re not proud of.”
He called the London Whale trading loss “embarrassing” and said that the bank expected to have more issues with authorities. However, he added, JPM is “doing everything necessary to comply with regulators.”
Dimon closed his speech reiterating his commitment to Europe, listing opportunities for growth and finally making a pledge:
“We promise you we will be a port of safety in the next storm.”
The shareholders that spoke next tried to tell Dimon that the storm lied within the company. The take away argument they made was that instead of seeing their vote to split his roles as a vote on good corporate governance in general, Dimon’s supporters turned it into a popularity contest.
“Good corporate governance is not a personality contest,” said the first speaker. Turning the vote into a referendum on Dimon’s performance detracted from the point that the positions of CEO and Chairman are simply different jobs.
Dimon, she added, shouldn’t be his own boss.
Additionally, the speaker worried about succession planning. At JP Morgan, there is none.
“No one person should ever be indispensable,” the speaker said.
The next speaker was a representative of the NY City Comptrollers Office, which runs the city’s pension fund holding about 11 million shares of JPM.
“Shareholders interests are best served when a CEO runs a business on the one hand, and the Chairman runs an independant board on the other,” said the speaker. “It’s unrealistic… and imprudent to have the CEO running the board…The bank leads its peers… but it also leads its peers in regulatory violations.”
A few other proposals got brief attention before board leader Lee R. Raymond, a former chief executive of ExxonMobil took the floor and responded to Dimon’s detractors.
Basically, he said the board voted to support Dimon unanimously.
“To put the debate over our board structure in context… this is the same board… that helped guide this company through risks associated through the financial crisis, and through the Bear Stearns and Wa Mu transactions without a single negative quarter… We don’t think this is time for disruption.”
So there you have it. At this point, shareholders are still taking the mic and talking about this proposal. We’ll keep you posted as to how colourful they get (if at all).