(Changes "letter" to "call" in eighth paragraph)
By David Henry
NEW YORK May 17 Pension and endowment managers
on Friday called on U.S. regulators to review the rules for
shareholder voting after a firm collecting ballots for JPMorgan
Chase & Co cut off the bank's opponents from polling
The Council of Institutional Investors, which represents
managers of pensions, endowments, and foundations with more than
$3 trillion of assets total, said in a letter to the Securities
and Exchange Commission that votes at companies' annual meetings
are set up in a way that gives too much of an advantage to
A group of investors has proposed stripping JPMorgan head
Jamie Dimon of his title of chairman, leaving him only his role
as chief executive. Voting on the proposal closes on Tuesday,
May 21, at the bank's annual meeting in Tampa, Florida.
Earlier this week Broadridge Financial Solutions Inc,
which distributes proxy communications and collects votes,
stopped giving early vote tallies to the investors who have
proposed the measure. The Securities Industry and Financial
Markets Association, a trade group whose members include
JPMorgan, asked Broadridge to stop giving the sponsors that
information, said Lyell Dampeer, a senior executive at the
Dimon and the board, who have been campaigning to defeat the
measure, continue to get updates on incoming votes, and can
adjust their campaign strategy accordingly. Investors calling
for an independent chairman said their campaign is at a
disadvantage now that they are no longer receiving information
Next week's vote has come to be seen as a referendum on
Dimon and his ability to safely manage the biggest U.S. bank
after its $6.2 billion "London Whale" loss derivatives trades
Advisory firms Institutional Investors Services and Glass
Lewis & Co separately concluded that investigations of the
bank's trading losses showed the board had failed in its
oversight of JPMorgan executives.
Dampeer said Broadridge took the SIFMA call as a directive
from its customers that it had to obey. Corporations pay the
firm to distribute proxy materials and collect votes.
A JPMorgan spokesman declined to comment.
JPMorgan directors say that Dimon should hold both jobs. The
company's profits, strong balance sheet and corrective actions
after the London Whale debacle prove its current governance is
working, they say.
Michael Garland, who oversees corporate governance for New
York City Comptroller John Liu, one of the fund investors behind
the proposal, said May 6 was the last time he learned from
Broadridge how the voting was going. "It is hard to know what
kind of strategy to pursue and what kind of resources to
invest," Garland said.
A similar proposal last year for an independent chairman
received 40 percent of the vote. It had one sponsor, the
American Federation of State, County & Municipal Employees
pension fund. This year AFSCME has been joined by New York City
and state of Connecticut employee retirement plans and Hermes
Fund Managers from the United Kingdom.
Garland and officials of other public pension funds are
active members of the Council of Institutional Investors.
The Council said in its letter that the SEC should "do all
in its power to put an immediate stop to this patently unfair
and arbitrary change in practice." The group said that
Broadridge's obligations extend to the investing public in
general, not just its clients.
Dampeer said Broadridge wants the SEC to settle the issue.
An SEC spokesman declined to comment.
(Reporting by David Henry in New York; Editing by Bernard Orr,
Phil Berlowitz and Eric Walsh)