JPMorgan: This Board Game's Not Over Yet

After U.S. stocks closed at another all-time high yesterday, they continued upward this morning, with the S&P 500 (SNPINDEX: ^GSPC  ) and the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI  ) up 0.55% and 0.45%, respectively, at 10:05 a.m. EDT.

JPMorgan: That's just the way it is?

That's just the way it is.
Some things'll never change.

Shareholder activists must have found a bitter irony in those two lines from the 1986 hit "That's Just the Way It Is" by Bruce Hornsby and the Range, which was played at the end of the webcast of Dow component JPMorgan Chase's (NYSE: JPM  ) annual meeting yesterday.

In the end, after a pitched battle between the board and shareholder activists and much media speculation regarding the outcome, Jamie Dimon retained his dual role as CEO and chairman of the board of directors.

Oddly, the vote to strip Dimon of the chairman's role received less support this year -- roughly a third of the vote -- than it did a year ago, before the full extent of the "London Whale" fiasco was known (not to mention that the bank has suffered a grave deterioration in its relationships with regulators thanks to this and other missteps).

For a compendium of some of the problems highlighted by the London Whale scandal, see "48 Damning Pieces of Evidence From the JPMorgan Whale Trade Investigation."

But while shareholders may have spared Dimon, they were not so kind with several other directors. Formally, all directors received at least 50% support for their re-election. Nevertheless, with favorable votes of 53.1%, 57.4%, and 59.3%, respectively, the margin of "victory" for Ellen Futter, James Crown, and David Cote is sufficiently small that it equates to a vote of no confidence. According to figures from shareholder advisory firm ISS, prior to Tuesday's vote, "just six nominees out of the 2,127 people elected to 237 boards this year had failed to receive support in excess of 60 per cent of votes cast."

It's not coincidence that all three directors are on the risk committee, but I'd like to know what some of them were doing on this committee in the first place. What expertise does the president of the American Natural History Museum (Futter) bring to risk management at a global investment bank? Dimon may be off the hot seat, but not everyone else is. JPMorgan investors should continue to demand change at the board level.

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