Jamie Dimon, chief executive officer of JPMorgan Chase (NYSE:JPM), will face angry shareholders, who are pushing for more power in the boardroom despite rising stock prices, at the company’s annual meeting in Tampa on Tuesday.
Shareholders could vote to separate the positions of chairman and chief executive, which have both been occupied by Dimon since 2006. Shareholder protests are usually only fruitful at companies that are struggling, but if successful this move would signal a significant power shift in corporate America.
Some investors argue that an independent chairman is necessary to counterbalance the chief executive. If shareholders reject the proposal, it will be a powerful act of faith in Dimon’s leadership. Whether or not the positions are separated, changes that would create a greater distribution of power within the company are expected. The board is expected to face shareholder’s questions as well, as they want to be sure that the board is not just Dimon’s puppet. Critics believe the board is not independent enough and has not been properly monitoring risk-taking behavior at the bank. The board did firmly support Dimon as CEO and chairman.
Many companies, including 7 out of 10 of JPMorgan’s largest owners, are run by men who occupy both CEO and chairman positions. Dimon has been incredibly successful running JPMorgan, and has come to symbolize the American archetype of a businessman atop a bank too big to fail. Dimon successfully pulled JPMorgan through the financial crisis of 2008 and, whether the CEO and chairman positions are separated or not, shareholders are eager to know who will replace him. After coming under scrutiny in the aftermath of the London Whale trading fiasco last year, Dimon has faced harsh criticism for his power over the board and his approach to risk-management.
There are many arguments for and against combining the roles of CEO and chairman. It has been rumored that Dimon will quit if he loses his position as chair, and as he continues to shuffle his executive chairs, uncertainty about who his successor would be is growing. Earlier this month presiding director Lee Raymond and governance committee chair William Weldon wrote a letter to shareholders arguing for Dimon to keep both roles, but the letter may only have given fuel to their opposition.
A vote forcing Dimon to relinquish his role as chairman could lead to crisis for the bank, but would also bring what some believe is a much needed power-shift both within JP Morgan and corporate America as a whole.