Pension Group Moves to Split JPMorgan Chairman, CEO Roles
A group of JPMorgan Chase shareholders urged support for its proposal to split the chairman and CEO roles at the big bank in a letter Monday. The proposal is number "6" in the proxy materials for JPMorgan's shareholder meeting, taking place May 21 in Tampa, Fla.
Among the multiple reasons cited for the split, the group points to lapses in oversight evidenced during the London Whale debacle. Perhaps the most compelling reason for splitting the roles: The bank's being in constant crosshairs with regulators. It's being investigated by eight regulators at present.
A confidential July 2012 letter to JPMorgan from its lead regulator, the Office of the Comptroller of the Currency, is quoted as saying "the capabilities of management or the board may be insufficient," thereby leading the OCC to downgrade the company's management rating from 2 to 3.
"It is incumbent on the board to restore credibility with regulators in light of multiple violations… that have cost the company $16 billion since 2009," the group led by the AFSCME Employees Pension Plan wrote in the letter. In addition, each job requires full-time attention, the letter says.
Earlier this month, a similar proposal to split the chairman and CEO roles by shareholders of Goldman Sachs stopped short of being included in the proxy when the company sat down to negotiate with the group. At JPMorgan, AFSCME says its attempts to discuss the matter with the board were thwarted.
According to Lisa Lindsley, director of capital strategies at AFSCME, JPMorgan's corporate secretary in December 2012 agreed to set up a meeting with management, who would brief the board. Lindsley says when the secretary got back to her at the beginning of the year, access to the board was declined. JPMorgan, for its part, says although AFSCME asked for a meeting with the board in its initial letter to JPMorgan, it did not renew that request on the conference call with the corporate secretary. JPMorgan says is still open to discussions with AFSCME.
Since then, the board has been arranging meetings with other various, large shareholders to gauge their support for the matter, for which 40 percent of investors voted in favor in 2011. The board has unanimously backed Jamie Dimon to continue in both roles.
—By CNBC's Kayla Tausche; Margaret Popper contributed reporting