J.P. Morgan Chase & Co. Chief Executive Officer Jamie Dimon won approval from investors to keep his chairman title in preliminary voting ahead of today's shareholder meeting, according to two people with knowledge of the tallies.
Still, Mr. Dimon was on track to get less support for retaining the dual roles than at last year's meeting, when 40% of shareholders favored an independent chairman, the people said, requesting anonymity because the count isn't public. The outcome could change as final ballots are cast today. Joe Evangelisti, a spokesman for the New York-based lender, declined to comment on the results.
Calls for Mr. Dimon, 57, to cede the chairmanship and for J.P. Morgan to oust some board members have mounted since last May, when the firm disclosed lapses at its chief investment office that led to more than $6.2 billion in losses. Regardless of whether those efforts succeed, the board will need to address investor concerns, said Michael Mayo, an analyst at CLSA Ltd.
“J.P. Morgan changes after this annual-meeting season, even if all the votes go in the direction” its leaders wanted, Mr. Mayo said. The firm will probably overhaul its risk committee and designate a new lead director, a post currently held by Lee R. Raymond, 74, Mr. Mayo added. It also may bolster succession planning.
“The last seven years have been great for Jamie Dimon — my question is, what about the next seven years?” Mr. Mayo said. “The bigger issue at J.P. Morgan is key-man risk” and whether the board has someone who can step into Mr. Dimon's shoes.
A majority of preliminary ballots supported three members of the board's risk committee who were singled out for removal by shareholder adviser Institutional Shareholder Services, according to the New York Times, which reported the backing for Mr. Dimon earlier today. Among them, Ellen Futter received the least support, the newspaper said. She isn't present at today's meeting in Tampa, Fla., where results will be announced.
A vote to back Mr. Dimon, who's credited with guiding J.P. Morgan to three straight years of record profit, would be a defeat for investors who say companies need separate chairmen to balance leadership and provide additional oversight. The proposal at J.P. Morgan gained momentum as the board blamed the so-called London Whale trading loss partly on Mr. Dimon in a January report while cutting his pay 50%.
Bruno Iksil, the trader who made the bets, was nicknamed the London Whale because his positions were so big.
The AFSCME Employees Pension Plan, which was among investors sponsoring the proposal, will keep pressing the bank for a more independent chairman if this year's measure is rejected, said Lisa Lindsley, director of capital strategies for the Washington-based union.
“We do not see this measure as a panacea, but rather a badly needed first step to strengthen the board,” Ms. Lindsley told Mr. Dimon at today's meeting. She criticized the bank's succession planning and said AFSCME's proposal wasn't a referendum on Mr. Dimon's leadership. “No one person should be indispensable,” she said.
J.P. Morgan could give more authority to Mr. Raymond, the former chairman and CEO of Exxon Mobil Corp., or agree to split the roles in the future, after Mr. Dimon leaves, according to a person with knowledge of the firm's deliberations.
The last time shareholders of a large U.S. bank voted for divided oversight was in April 2009, when Bank of America Corp. investors stripped the title of chairman from CEO Kenneth Lewis in a rebellion against management's handling of the firm's takeover of Merrill Lynch & Co.
Lloyd C. Blankfein, chairman and CEO of Goldman Sachs Group (GS) Inc., avoided a similar vote on his firm's proxy statement this year by agreeing with shareholder advisory firm CtW Investment Group to expand the duties of lead independent director James Schiro.
Mr. Dimon received backing from investors including Home Depot Inc. founder Ken Langone, who called the banker the “finest” CEO in the U.S., and billionaire Warren Buffett, the Berkshire Hathaway Inc. chairman and CEO who has described Mr. Dimon's annual letter to shareholders as a must-read.