Two ranking JPMorgan Chase directors issued a letter to shareholders Friday arguing against recommendations by proxy advisory firms to split the duties of chairman and CEO Jamie Dimon and to vote against some directors.
The board is unanimous in its view that it is best for Dimon to hold both roles and that the current governance structure "is working effectively," according to the letter signed by presiding Director Lee Raymond and William Weldon, chairman of the corporate governance and nominating committee.
The letter warned that a vote against current directors or to split the CEO and chairman roles "could be disruptive to the company and is not in shareholders' best interests."
The letter is a direct response to reports in the past seven days from advisory firms Institutional Investors Services and Glass Lewis. They concluded that investigations of the bank's $6.2 billion loss on the so-called London Whale derivatives trades showed the board had failed in overseeing JPMorgan executives.
Both firms recommended that shareholders vote against re-election of three board members who served on the risk policy committee when the losses occurred.
The advisory firms generally take the view that having a board chairman who is separate from the CEO leads to better oversight. They said the London Whale episode showed that JPMorgan was no exception.
The board's letter said the firms and others "have incorrectly and unfairly characterized management's mistakes as a failure by the risk policy committee."
The letter was issued ahead of the bank's annual meeting on May 21, when shareholders will vote on the board's recommendation that all 11 directors be re-elected for another year.
The ballot also includes a nonbinding resolution proposed by some shareholders that calls on the board to have a chairman who is independent from the CEO.
The vote on splitting the roles has come to be seen as a referendum on Dimon, 57, who was widely praised for leading the bank profitably and safely through the financial crisis and then saw his reputation tarnished by the trading debacle.