Jamie Dimon's Had Enough of Meetings
Anyone who has attended the shareholder meeting of a Fortune 500 company will have felt a twinge of agreement at JPMorgan Chase & Co. CEO Jamie Dimon's characterization that they are a waste of time.
The romantic notion that these meetings are a democratic exercise of shareholder rights bears little relation to reality, where important votes tend to be sewn up in advance through proxy firms and big investors. Most AGMs involve sitting in cavernous and poorly attended amphitheaters, listening to investor complaints and bland speeches, waiting for vote results that rarely surprise.
But it's not a good idea for a figurehead like Dimon, a billionaire who serves as both chairman and CEO of the biggest U.S. bank by market value, to so frontally attack the corporate-governance calendar. It looks self-serving.
AGMs are where Dimon's own combined job has come under the most public scrutiny, with shareholders regularly voting on whether to separate the two roles, in line with international best practice. Dimon and his board regularly win the vote, sure, but not always with the same margin. It's a debate he's unlikely to relish.
Turn to JPMorgan's annual report, and you're left with the impression that ditching the AGM is but the thin end of the wedge. In addition to shareholder meetings, the CEO blasts class-action lawsuits, excessive reporting requirements, the short-termism of quarterly earnings, negative media scrutiny and board meetings. The latter tend to promote box-checking of legal and regulatory items over crucial management and strategy, according to the company.
The world's non-executive directors might sympathize with this. Of the 248.2 hours spent on average every year by directors on board-related matters, only about 61 of those are spent reviewing reports and materials, according to the National Association of Corporate Directors. The rest is made up of travel, meeting and event attendance, education, and other things.
But for JPMorgan to criticize all this is rather rich. The bank is one of the world's biggest, with $2.5 trillion in assets, and is no stranger to risk-management blow-ups. In 2013, after a trading position initially dismissed by Dimon as a "tempest in a teapot" ended up losing the bank billions, my Bloomberg News colleagues asked the question: "Can anyone really run JPMorgan?" A few months later, JPMorgan reshuffled its board and gave more power to its senior independent director. Shareholders evidently care about those box-checking exercises.
Dimon is a wealthy, successful, and powerful executive, and people obviously care about what he has to say. But after an investor day in which he floated the idea of building a social network to rival Facebook, said the biggest battle of all time would take place on the mobile phone, linked equities trading revenue to snowfall, and conducted a straw poll on whether to scrap quarterly earnings forecasts, he may already have too much to focus on without reinventing governance as we know it.
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