Majority Of Shareholders Still Support JPMorgan
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Here's a sign of how firmly entrenched Jamie Dimon is at JP Morgan Chase. The bank lost at least $2 billion in just a few weeks of failed trades.
GREENE: The news came out just before the annual shareholder meeting in Tampa. But Dimon, really one of the few giants of Wall Street still standing after the financial crisis, turned aside bid to curtail his power.
INSKEEP: He came into that meeting as JP Morgan's chairman of the board and CEO. That is the loose equivalent in government terms of having the same person as both speaker of the House and president. Dimon kept his titles, even though, as NPR's Yuki Noguchi reports, he faces a vocal group clamoring for change.
YUKI NOGUCHI, BYLINE: One of the biggest bones of contention has to do with whether JP Morgan is fighting regulations that passed after the financial crisis. Jamie Dimon says he supports 70 to 80 percent of what's known as the Dodd-Frank financial reform law.
JAMIE DIMON: We all want better, smarter stronger and better regulation that is based on facts and analysis. Second, as I wrote in my chairman's letter, and I quote, "We agree with the intent of the Volcker Rule."
NOGUCHI: The Volcker Rule would put limits on a bank's ability to trade its own funds, limiting, in essence, both the risk and the rewards on those trades. Dimon told the audience of more than 500 shareholders that he supports some limits but not all. He argued the bank is also regulating itself. Those failed trades, he said, violated the bank's own rules about risk.
This response did not satisfy at least one longtime shareholder. Reverend Seamus Finn is with the Missionary Oblates of Mary Immaculate and is a shareholder activist.
REVEREND SEAMUS FINN: Up until now, we've basically been getting, you know, all sorts of efforts on their part to thwart the major piece of legislation that was put in place - not to make it better. So we would like them to take the opportunity to make it better. Thus far I don't think they've been doing that.
LISA LINDSLEY: I think the takeaway is that Wall Street has already driven our economy into the ditch once, and I don't think that the financial sector has learned anything from the crisis.
NOGUCHI: That is Lisa Lindsley, director of the American Federation of State County and Municipal Employees Union. Lindsley presented a proposal to strip Dimon of his chairman title and give it to someone outside of bank management. That proposal failed along with several other measures put forward by shareholders.
Lindsley noted most of the votes were cast before the revelation of the big losses last week. Her proposal still won 40 percent, which is much higher than in previous years.
LINDSLEY: Shareholders are coming around to that idea.
NOGUCHI: Paul Hodgson is a senior research associate with GMI Ratings. He says separating the leadership roles helps moderate the kinds of risks that banks take.
PAUL HODGSON: If the CEO is the boss of the board as well as of the executive management, then you don't have any kind of balance of power. And you know, this country is supposed to be about checks and balances. And if we can't institute that in corporate arenas, then we'll get the kinds of mistakes that we saw being made last week.
NOGUCHI: He says now over half of Fortune 500 firms have separate chairmen and CEOs, up from only a fifth of companies just a few years ago.
Yuki Noguchi, NPR News, Washington.
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