Shareholders of J.P. Morgan Chase & Co. at Tuesday's annual meeting narrowly defeated an investor's resolution for greater company disclosure to show how its lending activities affect climate change.
The proposal was one of six resolutions — all opposed by the company — that were defeated at the annual meeting, which was held via telephone due to concerns about the coronavirus.
The environmental resolution received 48.6% of the votes. The total is preliminary. Official numbers will be published in a few days in the company's 8-K statement.
"Shareholders today sent the message that it is past time for Chase to catch up with its peers, implement a strategy to decarbonize and de-risk its lending portfolio, and help build a more secure future for all," said Danielle Fugere, president of As You Sow, an environmental and corporate social responsibility advocacy group, in a news release following the annual meeting.
"It is critical that financial heavyweight J.P. Morgan Chase accelerate ambition to clean up its fossil fuel financing," said Ms. Fugere. "Investors can no longer tolerate business as usual in these unprecedented times." She also spoke at the annual meeting in support of her organization's resolution.
As You Sow wanted the company to issue a report "outlining if and how it intends to reduce the GHG (greenhouse gas emissions) associated with its lending activities in alignment" with global temperature goals established by the Paris Agreement.
The company opposed the resolution, telling shareholders in its proxy statement that it is "prioritizing its commitment to finance sustainable development" and "supporting companies that are working to strategically transition to a lower carbon economy and that are managing environmental and social risks responsibly."
The company said it offers "transparent disclosure" of its strategy and performance on ESG issues, sharing the information on its website and directly with shareholders.
Also at the annual meeting, a resolution calling for the chairman of the board of trustees be "an independent member of the board whenever possible" received 42% of the votes. Official numbers will be published in a few days in the company's 8-K statement.
If the board members determine that a chairman is no longer independent, it should choose a new independent chairman, the resolution said.
Jamie Dimon is both CEO and chairman, and Lee R. Raymond, former chairman and CEO of ExxonMobil Corp., is the lead independent director.
The company urged a "no" vote on the resolution, telling shareholders in a proxy statement:."The board annually reviews and evaluates its leadership structure. For 2020, the board determined to maintain a combined role of chairman and CEO."
The proxy statement said the lead independent director's role serves as "an independent counterbalance" to the chairman.
All existing directors were re-elected – and one new director was elected – by large majorities with none receiving less than 84.6% of the vote, including Mr. Raymond.
Mr. Raymond has been criticized by some large pension funds, a group of state treasurers and environmental groups for his fossil fuel background. They said his status as lead independent director sends an unwelcome signal to investors about J.P. Morgan's commitment to improving the environment.
The company announced in a May 1 filing with the SEC that it would choose a successor to Mr. Raymond as lead independent director "by the end of the summer." The lead independent director is chosen by other independent directors on the board.
Mr. Raymond, 81, has been lead independent director since 2001. At Tuesday's annual meeting, Mr. Dimon was asked if Mr. Raymond would retain his roles as chairman of the board's compensation and management development committee and member of the corporate governance and nominating. Mr. Raymond's future duties are "up to the board," Mr. Dimon said.
The shareholder resolution cited Mr. Raymond's 19 years as lead independent director as a reason for making changes.
"Long tenure in a director is the opposite of independence, and independence can be the most important attribute for a director — especially a lead director," the resolution stated. "The roles of chairman and CEO are fundamentally different and should be held by two directors — a CEO and a chairman who is completely independent of the CEO."