JP Morgan shareholders decisively rejected an effort by a highly politicized group of shareholder activists to divest CEO/Chairman of the Board Jamie Dimon of the latter title:
Jamie Dimon won more investor support this year than in 2012 to remain chairman, surviving a push to divide the roles after the biggest U.S. bank suffered a record trading loss.
The proposal to divide Dimon’s duties drew 32 percent of votes, down from 40 percent last year, the lender said today at its annual meeting in Tampa, Florida.
Matthew Yglesias pompously proclaims his ability to read the minds of thousands of shareholders, opining that:
Dimon was able to push back by deploying a highly effective tactic that just happens to illustrate precisely why he shouldn't hold both jobs: He threatened to quit.
He said that if he was forced to step down as chairman he would step down as CEO as well. And shareholders thought, not implausibly, that doing so would throw the firm into disarray and hurt its share price. So they stuck with Dimon.
In contrast, I have way of knowing for sure why thousands of disparate and anonymous shareholders voted the way they did. Lacking Yglesias' ESP, I'm limited to throwing out theories. For example, the shareholder activists who supported this effort to strip Dimon of his Chairman title likely were not interested in good governance. After all, who were the leaders of the effort? They were outfits like the American Federation of State, County & Municipal Employees (AFSCME) pension fund and the NY City pension funds. AFSCME, of course, is a major Democrat supporter and NYC Comptroller John Liu--who controls those funds--is himself a Democrat with aspirations for higher office. Jamie Dimon, of course, has famously earned liberal ire. As the WSJ opined recently:
For the sin of steering the bank through the disaster intact, the JP Morgan Chase chairman and CEO now finds himself the target of a political campaign to weaken his authority and shut him up. ...
Though a longtime Democrat, Mr. Dimon became a Beltway-union-media target by speaking out against Washington's regulatory frenzy in the wake of the 2010Dodd-Frank law. He has highlighted the costs of the myriad new rules emanating from the capital, such as the Volcker Rule, which is still unfinished three years on. As a rare CEO of a big bank who avoided the worst of the mortgage crisis, Mr. Dimon carries an influential voice, and one that many politicians would rather not hear.
Charles Gasparino likewise noted that the dump Dimon "effort is being pushed by union and public pension funds run by liberal politicians" and speculated that:
Despite some recent mishaps, including an errant trade that led to a $6 billion “London Whale” trading loss, investors still regard Dimon as America’s most capable banker. He famously steered Morgan clear of the excess that led to the 2008 banking collapses — and even with the Whale loss, it cranked out a record $21 billion in profits last year.
Yet not a day seems to go by without a strategically leaked story that JPMorgan is being investigated by some federal agency. In one account, a regulator told Dimon he’s losing credibility with people in Washington. Yes, the political dolts whose policies caused the 2008 crash are losing confidence in the one banker who steered clear of it.
But the bull’s-eye on Dimon is real. As a lifelong Democrat, his disdain for President Obama’s high taxes, massive government growth and over-regulation of businesses (particularly the big banks) was all the more powerful. ...
So maybe JP Morgan's shareholders figured there was no reason to toss Jamie Dimon under the bus just to make a bunch of Democrats and their union allies happy.
Just a theory.