Pension funds urge JPMorgan Chase to oust Dimon as chairmanFebruary 20, 2013: 4:51 PM ET
"Give up the chairman role Jamie Dimon." That's what a coalition of investors in four major pension funds told JPMorgan Chase's (JPM) board Wednesday. Dimon has served as the bank's CEO and chairman since late 2006.
The coalition, which includes the Connecticut Retirement Plans and Trust Funds as well as the New York City Pension Funds, called on the bank to name an independent board chairman. Shareholders will vote on this plan at the company's annual meeting in May. The bank had no comment about the proposal.
The pension fund group cited concerns over "the board's oversight in the wake of the London Whale losses, recent regulatory sanctions, and its failure to fully demonstrate that it can manage the size and complexity of its balance sheet."
In its press release, the pension coalition cited "clear conflict of interests" when a CEO essentially runs its board of directors as chairman. The group also noted that both the board of directors and Dimon signed off on risk controls that ultimately failed to catch errant trades by the so-called London Whale that have led to at least $6 billion in losses.
"Without an independent board chair, JPMorgan will be unable to restore investor confidence and ensure future compliance — both integral to protecting and creating long-term value," said NYC Comptroller John C. Liu, who is investment advisor, custodian, and trustee of the New York City Pension Funds, in the release.
It's unclear whether these strong words will affect the shareholder vote. The coalition holds roughly 17 million out of the roughly 3.1 billion JPMorgan shares owned by the public. Last year, the same proposal received support from 40% of the bank's shareholders.
Most big company CEOs still serve as the chairman as well. But that is slowly changing. In 2012, 21.5% of S&P 500 firms had an independent chairman, compared to 18.1% in 2010, according to the proxy advisor firm Institutional Shareholder Services.