JP Morgan investors have been urged to vote to split the roles of chief executive and chief executive at America’s largest bank amid concerns about the power of its billionaire boss Jamie Dimon.
ISS and Glass Lewis, which advise some of the world’s largest fund managers on how to vote at annual investor meetings, have pushed for a shareholder resolution that would ensure that two separate people hold the positions of chairman and CEO “as soon as possible.” Investors are expected to vote on the resolution at the bank’s general meeting on May 19.
Dimon, whose fortune is estimated at $2.6 billion (£1.9 billion), has held the dual role for two decades. Filling the two highest positions in a company is widely frowned upon, but not forbidden, in corporate governance circles, particularly in Europe.
“The size and complexity of JP Morgan suggests that it is difficult for a single person to lead both the company and the board,” ISS said in its shareholder report.
“The board is responsible for overseeing management and establishing accountability, and conflicts of interest may arise when an individual holds both the position of chairman and CEO, thereby leading both the management team and the board that oversees it,” ISS said. “Effective board oversight can be enhanced through independent leadership.”
Glass Lewis said an independent chairman would be “better able to oversee the company’s executives and set a shareholder-friendly agenda.”
The guidance has put proxy advisers on a collision course with Dimon, who has held the positions of chief executive and chief executive officer at JP Morgan since 2005 and 2006, respectively.
The two companies have long been in Dimon’s crosshairs. He accused Glass Lewis and ISS of having too much influence over shareholders, particularly when it comes to social and environmental issues. Dimon – considered the most powerful banker in the world – has also taken a patriotic stance, stressing that neither company is American-owned. Glass Lewis and ISS are owned by Canadian and German companies, respectively.
The battle has also reached the White House. Trump signed an executive order in December aimed at reining in Glass Lewis and ISS, which he said used their power “to advance and prioritize radical politically motivated goals.”
According to the Wall Street Journal, JP Morgan (JPM) has now shunned their use in its asset management division and is instead using its own internal AI-powered platform to decide voting at the annual general meetings of the companies it holds in its portfolios.
JP Morgan is urging investors to oppose a single retail investor’s shareholder proposal to split the roles of chairman and chief executive and has written public letters to Glass Lewis and ISS urging them to rescind their recommendations.
The bank said there was no evidence that companies with independent chairmen performed better than rivals, adding that any suggestions that an independent chair would be better able to oversee executives and set a shareholder-friendly agenda contained “no reference to or consideration of JPM’s strong track record of absolute and relative outperformance compared to peers.”
The proposal revives a long-standing debate about whether board independence will be threatened by merging the roles typically divided in companies across Europe.
While JP Morgan’s board has said it intends to separate the two roles following Dimon’s resignation, ISS said there was “a distinct possibility” he would remain as chairman, meaning the effectiveness of any senior independent board member would be eclipsed.
The bank said in its correspondence with Glass Lewis that the proxy adviser sought to “undermine the flexibility needed by the JPM board to design a governance structure that allows for an orderly transition in management succession events, which does not serve the interests of shareholders.”
The bank said the current leadership structure “has overseen long-term, strong financial performance and continued, meaningful progress on key initiatives and the effective implementation of strategic priorities.” “We believe these results are tangible evidence of the Board’s commitment to shareholder interests.”
A JP Morgan spokesman said the bank had no further comment.
