A personal affront
It’s not difficult to understand why he would feel that way. Such an outcome would surely be a vote against him personally, and would plant the blame for the London Whale boondoggle firmly on his shoulders.
That fiasco has lent new immediacy to the issue, since concerns still linger regarding the bank’s risk profile. The same question at last year’s meeting garnered 40% affirmative votes — and, though nonbinding, experts agree that an approval of more than half of stockholders this time around would make it unseemly for the board to ignore the mandate.
Does it matter?
Sharing these roles is not uncommon in many sectors, though, among big banks, the practice isn’t necessarily dominant. Similar to JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Co (NYSE:WFC)‘s John Stumpf holds both roles, though Citigroup Inc (NYSE:C)‘s CEO Michael Corbat doesn’t chair Citigroup Inc (NYSE:C)’s board; in fact, it was a strong chair, in the person of Michael O’Neill, that was able to push through the ouster of Vikram Pandit last year.
And, though Wells certainly has not been associated with the type of risk issues that made themselves apparent at JPMorgan Chase & Co. (NYSE:JPM), this question hangs in the air: Would splitting the roles make a difference?
The bank’s board doesn’t think it would be a good idea, but three of those persons are finding their own positions in jeopardy, as well. Then again, the board, which supports Dimon, also exhorts shareholders to look at the bank as a whole, and not just its more unpleasant parts — like the trading error — in isolation. In addition, at least one study, which took a look at the savings and loan industry, found that thrifts with a leadership paradigm like JPMorgan Chase & Co. (NYSE:JPM)’s fared better during that crisis than those that split the two roles.
On the other side of the question are investor advisory firms such as Institutional Shareholder Services, and Glass, Lewis & Co., which encourage shareholders to vote in favor of the proposal. Australian superfund First Super has also come out against Dimon and plans to contact partners such as BlackRock, Inc. (NYSE:BLK) to find out how they plan to vote.
BlackRock, Inc. (NYSE:BLK) and two other equity funds, Vanguard and Fidelity, voted in support of Dimon last year, but they haven’t yet made their current positions clear. BlackRock, Inc. (NYSE:BLK), for its part, will rely on outside contractor Governance for Owners to take care of the proxy vote issue on its behalf.
Now that Dimon has made his thoughts on the matter more clear, investors might consider the question of whether the colorful CEO is an integral part of the megabank’s overall success. If so, voting in favor of the proposal may very well cause Dimon’s departure, which might cause more problems at the bank than keeping the status quo intact. With only a little more than a week before the shareholders’ meeting, investors have a lot of thinking to do.
The article Would Jamie Dimon Really Leave JPMorgan Over This Proxy Feud? originally appeared on Fool.com.
Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends BlackRock, Inc. (NYSE:BLK) and Wells Fargo & Co (NYSE:WFC). The Motley Fool owns shares of Citigroup Inc (NYSE:C), JPMorgan Chase & Co. (NYSE:JPM), and Wells Fargo & Co (NYSE:WFC).
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