Financial Times is reporting that JPMorgan Chase's (NYSE:JPM) Jamie Dimon may have slipped the hangman's noose, and will not lose the proxy vote to have him removed as chairman of the country's biggest bank. The company's largest shareholders may have come to their collective senses, as should we all.
Those were the days, my friend
Financial Times cites "people familiar with the matter" as saying "some of JPMorgan Chase's largest shareholders are sparing Jamie Dimon but voting against other directors."
The director that's received perhaps the most negative attention is Ellen Futter. Currently the president of the American Museum of Natural History, she's seen as having no business serving on the board of the country's biggest bank, and arguably the country's most complex financial institution.
"The idea that sitting on a financial institution board is a job for the well-intentioned amateur," says Anne Simpson, head of corporate governance for the massive and vastly influential California Public Employees' Retirement System, "those days are gone."
This isn't about me
If this is true, and Dimon is going to remain as CEO and COB, then investors will have real reason to celebrate.
The movement to strip Dimon of his role as chairman has been ill-considered at best, and spiteful at worst: with investor-advisory firms and a certain swath of the media making this upcoming proxy vote far more about Dimon than about good corporate governance.
Dimon has done nothing but perform for JPMorgan and its investors since he became CEO in 2005 and COB in 2006. The superbank has reported record profits for three straight years , and hasn't reported a quarterly loss since he came on. And JPMorgan came through the financial crisis in arguably the best shape of any of the Big Four banks, including Wells Fargo.
And while the botched London Whale trades were a serious risk-management issue, Dimon went overboard in revamping top management to try and insure nothing of the sort would ever happen again. Finally, a $6 billion or so loss for a bank with more than $2 trillion in assets is truly not that big a deal in a relative sense.
The proxy vote is non-binding, but a majority "yes" could compel the board to take the proposed action anyway. Dimon has made it known he might leave the bank if he's stripped of his chairman position, but with any luck, this report that the bank's biggest shareholders have lined up behind him is true, and he will continue in his dual roles. This should come as welcome news to any JPMorgan investor.
As for the rest of the directors, I agree with Calper's Anne Simpson that the board of a key financial institution is no place for amateurs. Removing Dimon may not be good corporate governance, but removing the amateurs, or the simply unqualified, undoubtedly is.