Should Jamie Dimon Say Goodbye to His Role As Chairman?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

A group of powerful investors is calling for the head of JPMorgan Chase (NYSE: JPM  ) CEO Jamie Dimon. Well, at least one of his heads. The coalition wants to split the duties of CEO and Chairman, both of which Dimon currently performs.

At this point, it doesn't look like it's going to happen, though it's time to consider the idea.

AFSCME asks again
The coalition includes the AFSCME Employees Pension Plan, the Connecticut Retirement Plans and Trust Funds, Hermes Equity Ownership Services, and the NYC Pension Funds. Together these groups hold $820 million in JPMorgan shares.

According to the group's press release, the filing to name an independent board chairman "reflects mounting investor concerns with the board's oversight in the wake of the London Whale losses, recent regulatory sanctions, and its failure to fully demonstrate that it can manage the size and complexity of its balance sheet."

A similar proposal, filed by the AFSCME Employees Pension Plan last year and voted on by shareholders, garnered a 40% approval rating. JPMorgan shareholders will have the chance to vote on this new proposal in May.

Foolish bottom line
This shareholder proposal couldn't have come at a worse time for Dimon. JPMorgan has had the bad week of bad weeks.

The good news for Dimon is, the board will likely back him in his current dual-role job structures. But this good news for Dimon is also bad news for shareholders, and potentially the taxpaying public at large.

With trillions of dollars in assets, JPMorgan is a beast for any one person to stay reliably on top of, and Jamie Dimon isn't just any old CEO. In this Fool's opinion, he's the best risk manager in the business.

His obsessive fear of risk is exactly what kept JPMorgan away from the worst excesses of the housing boom, and even allowed the superbank to scoop up Bear Stearns as it was failing back in 2008: a boon not just for the bank but also for the country, as a bankrupt Bear might have touched off the financial crash months sooner.

The London Whale incident, while never a threat to the solvency of the bank, nevertheless showed that even the best CEOs can't keep their eye on everything going on in a giant organization like JPMorgan. A second, critical eye on the bank's operations could only be a help.

Unfortunately, that doesn't look like it's going to happen. But there's always next year.

Looking for in-depth analysis on JPMorgan? Check out a new Motley Fool report on the superbank, written by Ilan Moscovitz -- The Motley Fool's senior banking analyst and JPMorgan Chase specialist.

You'll learn where the key opportunities for the superbank lie, where its core growth will come from, and the potential business risks. You'll also get an analysis of its leadership team. For immediate access click here now.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2329416, ~/Articles/ArticleHandler.aspx, 9/29/2016 6:42:54 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 8 hours ago Sponsored by:
DOW 18,339.24 110.94 0.61%
S&P 500 2,171.37 11.44 0.53%
NASD 5,318.55 12.84 0.24%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 4:00 PM
JPM $66.71 Up +0.35 +0.53%
JPMorgan Chase CAPS Rating: ****