Dimon Seen Keeping Chairman, CEO Roles in Preliminary Voting

May 21 (Bloomberg) -- Bloomberg's Erik Schatzker reports that JPMorgan chairman and chief executive officer Jamie Dimon has survived a vote to split his roles per a report from the New York Times. A full tally of the results is due later today. He speaks on Bloomberg Televisions' "In The Loop."

JPMorgan Chase & Co. (JPM) 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, Dimon was on track to get less support for retaining the dual roles than at last year’s meeting, when 40 percent 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 Dimon, 57, to cede the chairmanship and for JPMorgan 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.

“JPMorgan changes after this annual-meeting season, even if all the votes go in the direction” its leaders wanted, Mayo told Bloomberg Television’s Erik Schatzker. The firm will probably overhaul its risk committee and designate a new lead director, a post currently held by Lee R. Raymond, 74, Mayo said. It also may bolster succession planning.

Photographer: Chris Ratcliffe/Bloomberg

James "Jamie" Dimon, chief executive officer of JPMorgan Chase & Co. Close

James "Jamie" Dimon, chief executive officer of JPMorgan Chase & Co.

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Photographer: Chris Ratcliffe/Bloomberg

James "Jamie" Dimon, chief executive officer of JPMorgan Chase & Co.

Risk Committee

“The last seven years have been great for Jamie Dimon --my question is, what about the next seven years?” Mayo said. “The bigger issue at JPMorgan is key-man risk” and whether the board has someone who can step into Dimon’s shoes.

A majority of preliminary ballots supported three members of the board’s risk committee who were singled out for removal by investor adviser Institutional Shareholder Services, according to the New York Times, which reported the backing for Dimon earlier today. Among them, Ellen V. Futter received the least support, the newspaper said. She is the only director not present at today’s meeting in Tampa, Florida, where preliminary results will be announced.

“In terms of the composition of the risk committee you should stay tuned,” Raymond told investors at the meeting, without elaborating.

Futter, 63, is president of the American Museum of Natural History in New York. ISS also opposes David M. Cote, the 60-year-old CEO of Honeywell International Inc., and James S. Crown, president of Henry Crown & Co.

The risk panel’s members “contribute a lot, and they have for their full tenure here,” Dimon said today.

Director Resignations

Incumbent directors who fail to win enough votes in an uncontested election must resign immediately, according to JPMorgan’s bylaws. The board, through a process managed by the corporate-governance committee, must decide whether to accept the resignation at a future board meeting, the bylaws show.

A vote to back Dimon, who’s credited with guiding JPMorgan 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 JPMorgan gained momentum as the board blamed the so-called London Whale trading loss partly on Dimon in a January report while cutting his pay 50 percent.

Bruno Iksil, the trader who made the bets, was nicknamed the London Whale because his positions were so big.

Maintaining Pressure

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,” Lindsley told Dimon at today’s meeting. She criticized the bank’s succession planning and said AFSCME’s proposal wasn’t a referendum on Dimon’s leadership. “No one person should be indispensable,” she said.

JPMorgan could give more authority to Raymond, the former chairman and CEO of Exxon Mobil Corp., or agree to split the roles in the future, after Dimon leaves, according to a person with knowledge of the firm’s deliberations.

BofA Precedent

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 Inc (GS)., 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.

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. (BRK/A) chairman and CEO who has described Dimon’s annual letter to shareholders as a must-read.

To contact the reporter on this story: Dawn Kopecki in New York at dkopecki@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

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