With the annual meeting for JPMorgan (NYSE:JPM) shareholders just 10 days away, two key directors within the company have made it clear the board wants no part of a proposed censure of Jamie Dimon. Activist groups are campaigning to split the top roles at the company and hope to take that fight to May 21′s meeting in Tampa. According to a letter released Friday, the board sees the proposal as bad for all concerned.
Lee Raymond and William Weldon, presiding director on the JPMorgan board and chairman of corporate governance respectively, signed off on a letter to shareholders that was unequivocal in its support of chairman/CEO Jamie Dimon. Though some shareholders want to split the leadership roles and leave Dimon with one, the prominent directors said the move would be “disruptive to the company and not in shareholders’ best interests.”
The London Whale incident — in which JPMorgan lost $6.2 billion on a bad call — has changed the way some shareholders view Dimon. This group believes the event London fiasco would have been avoided had there been more oversight within the company, something which could be achieved with dual leadership roles. Weldon and Raymond couldn’t disagree more…
In their mind, critics of Dimon and JPMorgan’s leadership structure “have incorrectly and unfairly characterized management’s mistakes as a failure by the risk policy committee.” They reasserted the view that increased oversight would not have helped the company avoid the mistakes that lost JPMorgan so much money and that all directors should be reelected .
Of course, JPMorgan is not suffering, and can proudly say that $6 billion won’t affect the company’s overall outlook. Earnings are impressive and stock prices continue to grow, while returns on equity have averaged over 15 percent for years. The board sees Dimon’s leadership as the reason behind these very positive trends, notwithstanding the losses incurred in London, and went so far as to remind the firms seeking Dimon’s demotion of the other side of the page.
“We highlight the performance of the Company not to diminish the events of last year or the lessons learned from them, but to provide important context,” wrote Weldon and Raymond, vocalizing a sentiment shared by Warren Buffett, among others. To JPMorgan’s board, London was bad, but a world without Jamie Dimon would be far worse.