Business

JP Morgan Chase CEO Dimon defeats coup

Giuseppe Macri Tech Editor

The ‘sage of Wall Street’ worked his magic at Tuesday’s JP Morgan Chase shareholders meeting, where chairman and chief executive Jamie Dimon retained both of his positions after several damaging assaults by the federal government.

The head of the nation’s biggest bank emerged victorious over a proposal by the American Federation of State, County and Municipal Employees (AFSCME), along with some discontented shareholders, to remove Dimon as chair after only 32 percent voted against him.

Despite additional pressure by the New York City Comptroller’s Office, Hermes fund managers, and the state of Connecticut, Dimon emerged from the annual meeting with 8 percent higher support than in 2012 — when 40 percent of shareholders voted in agreement with the same measure.

“We can’t tell you we don’t make mistakes and there’s not a bad apple among [us],” Dimon said while fielding questions from shareholders, according to Fortune. “The U.S. does have the best, deepest, wisest and most transparent capital markets. There are flaws, but let’s not throw the baby out with the bathwater.”

JP Morgan Chase came under increased scrutiny last year after losing more than $6 billion while investing in risky credit derivatives — an element that contributed heavily to the financial housing crisis that cast the Great Recession spell over the American economy in 2008.

The Senate Permanent Subcommittee on Investigations published a report in March suggesting Dimon and the bank were aware of the risky nature of these investments and, after the loss, attempted to conceal them.

Prior to last year’s headline-landing loss disclosure, which Dimon initially understated at $2 billion, the chief and chair was widely considered the ethical star in the otherwise dark void of Wall Street investment banks involved in the worst financial crisis since the Great Depression.

Opposition shareholders took advantage of Tuesday’s meeting to raise the greater question of whether large investment banks with so much proprietary economic influence should trust the need for an independent chairman.

Almost 70 percent of shareholders voted to extend the current leadership structure despite the now-anticlimactic expectation that Dimon would face a wave of stockholder opposition in response to last year’s aforementioned “London Whale” trading debacle.

JP Morgan retains more than $2 trillion in assets, and despite last year’s loss, Dimon has led the company into record profit margins far beyond those of his investment banking peers, who have only recently begun to reclaim levels held prior to 2008.