As Jamie Dimon fights to keep his dual roles as CEO and board chairman of JP Morgan, his powerful friends are letting the public know they have his back. Today, AIG chief Robert Benmosche told Bloomberg Television that there is no “we” in CEO, and added it would be dysfunctional for the CEO and chairman to be overseeing separate areas. But the cheerleading from business leaders probably won’t have much influence over how shareholders vote on May 21.
Dimon is facing a close vote on a shareholder proposal that would split the CEO and chairman positions. The idea has been gaining momentum, with some shareholders backing the idea while others who have traditionally supported the bank are on the fence. The proposal is non-binding, but a close vote would likely cause JP Morgan to make some changes as it wouldn’t want to be seen as going against shareholder wishes.
The pressure on Dimon stems from the $6.2 billion “London Whale” trading loss JP Morgan had last year. The incident has led to a US Senate investigation, while influential proxy advisory firms said the bank had woefully inadequate risk management.
Supporters of Dimon argue that the trading loss didn’t have a big impact on the bank, and that was thanks to Dimon’s leadership. For the first quarter this year, JP Morgan reported a 33% increase in profit, to $6.5 billion, beating analyst estimates. But others argue that Dimon faces a conflict of interest problem since the board chairman plays an important oversight role.
As the vote nears, other business leaders have been rallying around Dimon. Media mogul Barry Diller called Dimon opponents “busybodies without a clue.” Last week, News Corp CEO and chairman Rupert Murdoch tweeted that Dimon was one of the smartest and toughest guys around. Former GE CEO Jack Welch made similar comments last week on Twitter.
But more important than Dimon’s important friends is what Dimon himself has said about the issue. Dimon has reportedly said (paywall) that he would consider leaving JP Morgan if he is stripped of his chairman title. That may just be an idle threat, but it’s one that investors may be reluctant to test.