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.