Dimon has little to lose in shareholder vote

May 20, 2013

By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Jamie Dimon has little to lose if JPMorgan’s shareholders choose to split the chairman and chief executive roles at Tuesday’s annual meeting. Quitting, a response that has been hinted at by the board in recent weeks, would be a rather childish move. There are better options for all concerned.

First, the bank could stick to the letter of the proposal that’s up for a vote. Put forward by the American Federation of State, County and Municipal Employees, it leaves the timing of finding an independent chairman up to the board. So JPMorgan’s directors could say that they will split the two top roles only, say, in two years or when Dimon leaves, if that happens sooner.

In the meantime they could, like their counterparts at Goldman Sachs before them, strengthen the role of the presiding director, a title currently held by Lee Raymond, formerly chairman and chief executive of Exxon Mobil.

Much better, Dimon could cede a sliver of ego to regain the support of shareholders by accepting their decision. This would leave him with two options. He could relinquish the CEO’s duties and just keep the title of chairman. That would clear the way for new blood running the bank day-to-day. Or he could remain as CEO under a new independent chairman.

Granted, there is no obvious successor as CEO – one indication that Dimon hasn’t discharged all the duties a big company’s chairman should. Heavyweights like Bill Winters, Jes Staley and Charles Scharf have all left in recent years. But Chief Operating Officer Matt Zames and corporate and investment bank co-head Mike Cavanagh could be worth a shot – even perhaps as joint CEOs, though such job-shares can be messy.

Dimon would, however, hardly be an independent chairman and he might find it hard to step back. So the best bet for him and the company might be if he stayed on as CEO. That would be least disruptive, and he probably wouldn’t even need to take a pay cut. Sure, with a separate chairman Dimon would not hold as much sway in the boardroom as he currently does. But since he has performed less well as chairman than CEO anyway, that would be a change for the better.

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