Pension funds file proposal calling for independent chairman at J.P. Morgan Chase
By Barry B. Burr | February 20, 2013 3:35 pm
A group of institutional investors representing $818 million in shares filed a shareholder proposal at J.P. Morgan Chase & Co., calling for an independent chairman of the board of the company, according to a joint statement Wednesday from the group.
The five New York City pension funds, which have a combined $126 billion in assets, and the $26.2 billion Connecticut Retirement Plans & Trust Funds were joined as co-filers by the $850 million American Federation of State, County and Municipal Employees Pension Plan and Hermes Equity Ownership Services, which is owned by the £36 billion ($55 billion) BT Pension Scheme, London, and assists pension funds and other institutional investors in engaging with companies on corporate governance issues.
Jamie Dimon, CEO and president, has been chairman of J.P. Morgan Chases since 2006.
“Unchecked risk-taking and oversight failures have cost J.P. Morgan more than $6 billion in losses and seriously damaged its reputation,” John C. Liu, New York City comptroller, who oversees the city pension funds, said in the statement. “Without an independent board chair, J.P. Morgan will be unable to restore investor confidence and ensure future compliance — both integral to protecting and creating long-term value.”
Denise L. Nappier, Connecticut state treasurer and sole fiduciary of the state pension system, said in the statement, “At the heart of the company’s failures … is the question about independence. It is impossible to imagine how board oversight of the company’s affairs will be strengthened while CEO Jamie Dimon leads the very board that is charged with overseeing his own shortcomings.”
John Keenan, AFSCME corporate governance analyst, said in an interview that representatives of the group have had discussions with J.P. Morgan Chase executives without any resolution.
The New York City pension funds owned 9.7 million J.P. Morgan Chase shares as of Feb. 14; the Connecticut system, almost 1.4 million shares, as of Dec. 27; and the AFSCME fund, 74,984 shares as of Nov. 1. Hermes Equity Ownership Services represented 5.5 million shares as of Dec. 31.
The combined value of the co-filers’ 16.7 million shares is based on the Wednesday’s $48.97 midday trading price per share. J.P. Morgan Chase had 3.8 billion shares outstanding.
Mark Kornblau, J.P. Morgan Chase spokesman, said company executives declined to comment.
J.P. Morgan Chase hasn’t issued its proxy statement.