NEW YORK – JPMorgan Chase shareholders Tuesday voted to let Jamie Dimon — the chairman and CEO — keep both his jobs, but the bank’s board faces added pressure after some of its members barely won a majority.
The Wall Street banking titan, under pressure over the huge so-called London Whale derivative losses a year ago, beat back a shareholder proposal to strip Dimon of one of his leadership roles.
The proxy vote mustered just 32.2 percent of the ballots Tuesday, even less than the 40 percent a similar measure garnered last year. But shareholders sent a strong message of concern about the effectiveness of board oversight in the wake of the London debacle, in which the bank lost $6.2 billion in an out of control derivatives trading operation.
Three members of the bank’s risk committee received less than 60 percent support as shareholders said they shared some of the blame for the losses.
Dimon expressed regret for the derivatives fiasco, but said the company was working hard to put the problem behind it. “We try to admit our problems, fix them and move on,” Dimon said during the meeting.
Afterward, he added in a formal statement: “We appreciate the support shown by shareholders and the thoughtful way many have engaged with us as they determined how to vote on these issues. We take the feedback from shareholders very seriously.”
Shareholder groups had hoped to prod the board via a nonbinding vote to remove Dimon from the chairmanship. Though widely praised for his leadership during the 2008 financial crisis, he came in for heavy criticism after the London Whale losses. The term was coined after the nickname of one of the traders involved.
Shareholder activists argued that the losses demonstrated the need for an independent chairman to act as a check on Dimon. JPMorgan countered that its aggressive investigation and followup to the losses, which included slashing Dimon’s pay, showed strong oversight.
In addition, the bank, the largest in the U.S. by revenue, pointed to its record profits and strong performance in the stock market as further reasons to reject the proposal.
JPMorgan heavily courted key investors ahead of the vote. During one investor meeting, the charismatic Dimon threatened to leave the bank if shareholders approved splitting the two executive jobs, according to reports.
Marty Mosby, an analyst at Guggenheim Partners, said the outcome showed shareholder confidence and support for Dimon’s long-term track record.
“But it also shows their support for the board’s reaction to last year’s (trading) loss and how they’ve handled that over the last year.”
However, not all critics were satisfied.
Dimon had “a kind of a cat-that-ate-the-canary look on his face throughout the meeting,” said Lisa Lindsley, director of capital strategies at public employee union AFSCME, which sponsored the proposal to split the chairman and CEO roles.
“He probably sees it as a big victory,” Lindsley said. “I do think that’s how he sees it, but it’s unfortunate for the rest of us.”
Yet if Tuesday’s vote shored up Dimon’s authority, it left the board itself in question. Some shareholders at the meeting sharply questioned Dimon and Lee Raymond, presiding director on the board, on the qualifications and effectiveness of members of the bank’s risk committee.
Three of those panel members came under heavy criticism over the London losses, and earned less than 60 percent support from shareholders. AFSCME’s Lindsley said the three should resign, calling the vote “a clear sign that a number of things on the board need to change.”
Raymond hinted that it may undergo a makeover soon, telling the meeting, “In terms of the composition of the risk committee, you should stay tuned.”
JPMorgan shares closed 1.4 percent higher Tuesday at $53.03, up nearly 21 percent since the beginning of 2013.