Jamie Dimon just gave a speech and answered shareholder questions at JP Morgan’s annual shareholder’s meeting.The focus is expected to be on JP Morgan’s most recent $2 billion trading loss, which was revealed less than a week ago.
We live-blogged the most important points of Dimon’s speech, so you can catch it below:
We started with opening remarks from CEO Jamie Dimon as he introduced the board of directors (“they play a huge part of making this a great company”).
Dimon got right into it — “you probably want to hear about…May 10th” (no kidding). He explained what happened in the CIO office and the internal review (action taken as necessary).
About that action:
“Ina has served the firm for 30 years and is a great partner… but both Matt Zames and Daniel Pinto are excellent risk managers.”
“No client were effected, not customers were effected
“We are not against new regulation… we support 70-80% of Dodd-Frank. We all want better, stronger regulation, capital rules etc…. We agree with the intent of the Volcker Rule… continue to believe in the need to hedge to mitigate risk.
“We want to do what we always do, admit our mistakes, learn from them, and fix them.”
Dimon followed that up by going into how well JP Morgan did last year. Losses were due to mortgage issues but earnings power should grow over time (in the midst of volatility of course). “Each of our businesses is the best in the world.”
He then ended his comments and the meeting has moved on to shareholder proposals.
Things got interesting around proposal 5:
A PENSION SHAREHOLDER IS CALLING DIMON OUT! They’re saying that Dimon should not be CEO and Chairman of the Board because it means that he overs sees himself:
“Shareholder have lost $50 billion in market cap… we as shareholders do not believe any CEO is infallible… given lagging shareholder returns, shareholders would benefit from independent oversight.”
No worries for Dimon, though, the board immediately shot that down.
The Presbyterian Church brought proposal 6. They filed a resolution for more transparency when it comes to subprime mortgages and mortgage servicing. It was the 2nd time they’ve filed this — they want JPM to tackle servicing problems brought to light in ’09 and ’10. There has been a lack of action (and losses as a result), says the speaker, that makes the $2 billion loss look pale.
“We want greater attention from our bank on getting this real estate crisis behind us…. and rebuilding the lives of millions of Americans.”
And of course, this proposal was also rejected.
Next proposal — more transparency for lobbying/on direct and indirect political spending. “Deregulation and weak regulation encouraged by corporations political spending… endangers the economy.” Of course, the $2 billion loss was brought up to illustrate this point.
Here’s what the speaker wanted from JP Morgan:
“…we’re asking the bak to disclose payments to trade organisations that provide political services… without these reports these corporations can ignore the wishes of their shareholders.
After that there was a proposal that JP Morgan divest itself from companies that contribute to genocide. He also proposed this last year and specifically cites oil investments in Sudan. “There is no compelling reason for these investments.”
Now on to the Q&A:
Loans and robo-signing came up again. The speaker said that Jamie Dimon sounded committed to changing the banks ways after the $30 billion settlement in February.
“However… our company continues to trade in CDS and engage in proprietary trading… Mr. Dimon can you please help us to understand why? We’re wondering Mr. Dimon… do you still believe companies can self-regulate on their own accounts.. have your views on the Volcker Rule evolved… should our company be spending $7 million on lobbying…? We can’t help if wondering if you’re hearing the voices on this issue…”
The second question addressed the separation between the CEO and Chairman of the Board (Jamie Dimon), proposal five. But the speaker went farther than that, and asked if it’s good corporate governance for Dimon to be head of the Federal Board of New York.
The Fed board is advisory, said Dimon. He pointed out that he can’t even vote for President of the board.
Moving on. More on loan servicing from a California shareholder. This guy just made a joke: “You are not the worst servicer, Bank of America has risen to that level.” (Burn to everyone).
More on mortgages: “The $28 billion have lost to date and the $8 billion you have on your balance sheet, dwarfs the $2 billion you lost in trading,” said the speaker.
The next speaker asked about Dimon’s stance on Volcker. Dimon countered by asking him to read his last four shareholders letters, points out that there are over 7,000 lobbyists in Washington and only around 30 are in financial services. He argued for more collaboration, not less.
The next speaker said that the $2 billion loss is an opportunity for JP Morgan to become an outspoken supporter of “meaningful” regulation like Volcker.
No comment from Dimon.
Next speaker, a former loan modifier: “If Chase can afford to gamble with $2 billion, why can’t they afford to reduce the principle on mortgage holders… Not even people who don’t pay their mortgages, people who can afford a modification. We’re talking about real people here, not just dollar signs and investors.”
Now the comments are over and the meeting will go over the proposals and how the votes went on the board. Here are the important ones:
40.1% vote for and independent chairman (Wow, that’s more than we expected)
4.3% voted for loan servicing reform
9.2% voted for divestment from companies that support genocide.
Pretty standard if you ask us.