Financial giant promises more talks on CEO-chairman role and comprehensive report on ethical concerns
JPMorgan has secured the withdrawal of shareholder proposals battling the dual role of Jamie Dimon and calling for a comprehensive report on ‘the bank’s credibility problem’.
In return, the financial giant promised more talks on the joint role of chairman and CEO plus a report following the $23 billion in regulatory and legal settlements paid by the bank last year.
One proposal, from the Needmor Fund, had aimed to oblige the bank to appoint an independent chairman upon the current CEO’s succession. A proposal last year that would have split the roles – both currently held by Dimon – garnered 32 percent shareholder support.
The withdrawal came after the ‘company and investors agreed to explore together a multi-stakeholder colloquy to discuss the factors a board might consider when making the decision on whether to separate the positions,’ according to a statement released by the shareholders through the Interfaith Center on Corporate Responsibility (ICCR).
In a separate statement, JPMorgan says it ‘emphasized that it continues to welcome an ongoing dialogue with the proponents and other corporate governance professionals focusing on major issues related to the chair and CEO roles at public companies.’
In a related negotiation, the bank also reached an agreement with the Sisters of Charity of Saint Elizabeth and other shareholders who had filed a proposal that would have forced JPMorgan to compile a report on ethical and legal concerns.
The shareholders agreed to withdraw the proposal after JPMorgan committed to issuing a report ‘similar to that proposed,’ the bank says. ‘This report will consolidate the relevant information and provide it to shareholders in a readily available document.’
As originally proposed, the report would have forced JPMorgan to address ‘the bank’s credibility problem,’ according to the ICCR. The report would have covered checks and balances to avoid future issues, whistleblower protection measures, new board oversight and accountability measures and compensation details for executives who were involved in scandals or responsible for omissions in oversight.
‘The numerous scandals faced by JPMorgan in the last year deeply disturbed investors in the bank who called on management and the board to swiftly address the underlying issues,’ says Timothy Smith of Walden Asset Management, which represents the Needmor Fund. ‘We believe that the combination of these two resolutions sent a clear signal about the seriousness of the issues facing the bank. We are pleased that there was forward motion on both resolutions.’
