JPMorgan Chase & Co. (NYSE:JPM)‘s Jamie Dimon is used to being in the hot seat, but this may prove to be a bit more uncomfortable than usual.
A group of labor unions is looking to remove him from the position of chairman of the board, which he currently holds along with that of chief executive officer. It will probably come to nothing, but it could potentially do the bank some good if the shareholder proposal does come to pass.
We the unions
According to The Wall Street Journal, a “federation of labor union investors” — angry over the billions lost in last year’s London Whale trading scandal — wants Dimon removed as JPMorgan’s chairman, citing a conflict of interest when the same person holds both roles.
The federation’s stake in the superbank is only 0.4%. And since the shareholder proposal they’ve submitted is non-binding, even if the group rounded up more support and got the motion passed, Dimon could ignore it anyway.
Some yin for Dimon’s yang
So what’s the point then? Maybe to make a statement, to shine a light on the guy at the top of the heap who’s been perfectly comfortable replacing many of the people surrounding him in the wake of the London Whale, but not himself.
Maybe the group is just looking to embarrass the bank’s superstar CEO, realizing that, while Jamie Dimon loves being the center of attention, this isn’t the kind of attention he’s looking for.
Let it be known that I’m a JPMorgan shareholder as well as a fan of Dimon. He’s a renowned control freak, but a very big fish — or mammal, as it turned out to be — certainly got away from him last year. However, with all the house cleaning he did as a result, the bank is probably in better shape from a risk-management standpoint than it’s ever been.
The labor union federation has a point, though. In general, as investors, we’re very comfortable with having the same person hold the role of COB and CEO. But it doesn’t have to be that way.
They split the roles at Bank of America Corp (NYSE:BAC). Why not at JPMorgan, or any other bank or publicly held company, for that matter? It never hurts to have a strong independent person around, especially when you’re dealing with someone as strong and independent as Dimon.
Morgan Stanley (NYSE:MS) recently beat off a similar attempt by shareholders. And over at Goldman Sachs Group, Inc. (NYSE:GS) , a group of shareholders is currently trying to remove CEO Lloyd Blankfein from the position of chair. That effort, like the one at JPMorgan, will likely come to naught, and the institutions we invest in might be all the worse for it.
The article Another Big Bank Is Under Activist Attack originally appeared on Fool.com and is written by John Grgurich.
Fool contributor John Grgurich owns shares of Goldman Sachs and JPMorgan Chase. Follow John’s dispatches from the bleeding heart of capitalism on Twitter @TMFGrgurich. The Motley Fool recommends Goldman Sachs. The Motley Fool owns shares of Bank of America and JPMorgan Chase.
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