Jamie Dimon, center, on Capitol Hill. (AP Photo/Lawrence Jackson)
As JPMorgan Chase’s annual shareholder meeting ended on Tuesday, the conveners played Bruce Hornsby’s song “The Way It Is.” The celebratory DJ-ing came after shareholders voted down a proposal that would separate the role of the board’s chairman from that of the CEO; Jamie Dimon currently fills both roles. JPMorgan, which has been so successful in its fight to escape any accountability from regulators, has now also triumphed over the “threat” of an independent board chair more accountable to shareholders. To win, it dispatched many of the same tactics it uses to erode financial reforms: backroom dealing, Wall Street front groups and outright threats.
JPMorgan’s reputation continues to be marred by scandal. To name just a few of its myriad offenses: The company is being pursued for illegal manipulation of the electricity markets, fined for violating embargo laws and chastised by regulators for weak controls against money laundering. The Senate Permanent Subcommittee on Investigations, in its report on the London Whale trades (which I wrote about in March for The Nation), also outlined multiple areas where JPMorgan had lied to investors and to Congress, and likely violated securities law.
JPMorgan’s attitude in the face of its wrongdoing remains arrogant and defiant. In an April letter to Shareholders, Dimon wrote, in a bold orange font, “Satisfying all the regulatory requirements will take diligent, sustained effort and will touch every part of the company.” Only a company run on hubris would have the audacity to say, as JPMorgan has effectively said, that obeying the law is going to take a lot of work.
In the wake of this ongoing mismanagement, a coalition of investors, including the American Federal of State County and Municipal Employees (AFSCME) and the NYC Pension Funds, put forward a shareholder proposal to split the chairman-of-the-board role from the CEO. The board of directors is responsible for overseeing JPMorgan’s CEO, so allowing a CEO to chair its own board is an egregious conflict of interest, and yet one that remains prevalent in American corporations. So prevalent, you need look no further than JPMorgan’s own eleven-member board, which includes three members (four if you count Dimon himself) who served as CEO and chairman of their firms: David M. Cote of Honeywell, Lee Raymond of Exxon and William C. Weldon of Johnson & Johnson.