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Breakingviews: Splitting JPMorgan's top job

Tuesday, May 07, 2013 - 03:25

May 7 - Breakingviews editors discuss the growing pressure to separate the bank's CEO and chairman roles and why doing so would be about good governance more than current boss Jamie Dimon.

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Breaking up is hard to do it JPMorgan I'm talking about the proposal to split the chairmanship and CEO of the bank. Both positions now held by Jamie diamond diamond of course and this year last year the proposal got 40% shareholder. Support this year it's up again. Proxy service. Glass lewis' recommended that this proposal passed of this year though it. It may be a little different things maybe a little different so what's going -- yeah I mean last year was really. It was the -- immediate reaction to. The London -- trade which has just come out Jamie and editor apologized profusely. It obviously blew up didn't wasn't a big deal for the other bottom line of the bank -- -- six billion dollar loss but in the grand scheme of things not a big deal. This year the question that that's been raised by rob Cox. Measure which is the way a lot of the split votes have been have been approached to -- like you do bad therefore you shouldn't be chairman and CEO. In fact maybe the question really is this is just really good governance you know to have an independent chairman and it shouldn't be looked at as a punitive measure. The answer is JPMorgan different in this regard of innocent is a case more compelling for the bank as opposed to other companies are as a sort of a blanket good thing and why should it. So it's a blanket -- I think especially for banks big ranks having independent chairman CEO it means it should be. A better way of governing their banks so you have these big complex institutions. Jamie's done for example hands. The head of the chief investment officer report directly to him is the officer that lost the money Basra. And yet he'd mess Anderson for seven years ago to trust he he trusted has seen much that was critical oversight came -- very little. Hoffman is not his -- was still left him a multimillionaire he we have much of a comeback from the bolt right dock -- -- that was etc. I. He's the one he's brought the crux of everything particularly I mean that everything. -- point also -- that -- so you have glass Lewis and ISS which are too big firms that advise. Investors how to how to vote when they can't make up their own minds right or influence them. But the other thing you had come out this week which is kind of extra ms. Warren Buffett who's saying. Although he I think -- both -- Not as saying that it's actually a better way to have the role let's let me because of well firstly get cover from the chairman in terms deal with regulators and shareholders and CEO can set the strategy in place and move ahead and focus on that. But the bigger thing is. When things do go wrong you wanna have an independent chairman who can lead the charge to replace the C right Jamie Dimon is not gonna replace Jamie Dimon and that's just isn't gonna happen out. The argument becomes some people won't make the case that'll lead director can fulfill the sale of a strong lead director of feel the same role the question is whether or not you can find a person that has that kind of strong voice and maybe it's easier to do that when you have just an independent person and that's. We did the silliest thing about as holy direct presiding -- thing is the basic I will come up with -- different way to create channel without giving him the chairman's title and a so one -- just if he's didn't chairman's role given the chairman's title there is no reason to the -- -- Well how well tells we'll see what happens at JPMorgan I guess the vote is coming up by the end of this likes him. In the meantime I'll stay tuned for more breaking views tomorrow.

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Breakingviews: Splitting JPMorgan's top job

Tuesday, May 07, 2013 - 03:25