Hillsborough Sheriff deputy patrols outside the gate of JP Morgan Chase annual stockholders meeting held Tuesday, in Tampa, Fla. JPMorgan Chase CEO Jamie Dimon will speak to shareholders five days after disclosing a $2 billion trading loss.
Associated Press Enlarge
TAMPA — The CEO of JPMorgan Chase survived a shareholder push today to strip him of the title of chairman of the board, five days after he disclosed a $2 billion trading loss by the bank.
CEO Jamie Dimon also won a shareholder endorsement of his pay package from last year, which totaled $23 million, according to an Associated Press analysis of regulatory filings.
Mr. Dimon, unusually subdued, told shareholders at the JPMorgan annual meeting that the company’s mistakes were “self-inflicted.” Speaking with reporters later, he added: “The buck always stops with me.”
Most of the shareholder ballots were cast in the weeks before Mr. Dimon revealed the trading loss.
His pay package passed with 91 percent of the vote. The vote to strip him of the chairman’s title won only 40 percent support. The bank did not announce separate results from before and after the loss was revealed.
Mr. Dimon was confronted at the meeting by shareholders upset about the trading loss, which has rattled investor confidence in the bank and complicated JPMorgan’s efforts to fight tougher regulation of Wall Street.
Rev. Seamus Finn, representing shareholders from the Catholic organization Missionary Oblates of Mary Immaculate, said that investors had heard Mr. Dimon apologize before for the foreclosure crisis and other problems.
“We heard the same refrain: We have learned from our mistakes. This will never be allowed to happen again,” Mr. Finn said. “I can’t help wondering if you are listening.”
Lisa Lindsley, director of capital strategies for an influential union of public employees that is also a major JPMorgan shareholder, said independent board leadership was in shareholders’ best interest.
“An all-powerful CEO is his own boss,” she said. “Looking for an infallible CEO is a fool’s errand.”
Investors have pummeled JPMorgan’s stock price since the loss was revealed. The stock lost 12 percent in two trading days and lost almost $20 billion in market value. It bounced back on Tuesday, rising 3 percent.
Mr. Dimon said he did not expect the trading loss to jeopardize JPMorgan’s quarterly stock dividend, which is 30 cents per share.
A law enforcement official said that the FBI’s New York office is heading an inquiry by the Justice Department into the JPMorgan loss. The official, who was not authorized to speak about the decision, spoke on condition of anonymity.
The official characterized the inquiry as preliminary.
There was a heavy police presence at the meeting, in an office park east of downtown Tampa. Protesters were there as well, including some who threw eggs at a poster with Mr. Dimon’s picture on it.
“We wanted to let Jamie Dimon know how we feel about what big banks have done to our economy,” said Marilyn Lyday, a member of the protest group Occupy Orlando.
Mr. Dimon got something of a vote of confidence from President Obama, who appeared on ABC’s “The View” for an episode airing today. Mr. Obama used the appearance to press for tighter regulation of Wall Street.
“JPMorgan is one of the best-managed banks there is,” the President said. “Jamie Dimon, the head of it, is one of the smartest bankers we got, and they still lost $2 billion and counting.”
Mr. Obama said the bank was “making bets” in the market for the complex financial instruments known as derivatives. Mr. Dimon has said the bank was hedging against financial risk.
A part of the 2010 financial overhaul legislation known as the Volcker rule would restrict banks from some trading for their own profit. Mr. Dimon and critics of the industry have disagreed over whether JPMorgan’s trading would have violated that rule.
In Washington, Treasury Secretary Timothy Geithner said JPMorgan’s trading loss strengthens the case for tougher rules on financial institutions, as regulators continue writing rules from the 2010 law.
Mr. Geithner said that the Federal Reserve, the Securities and Exchange Commission and the Obama administration are “going to take a very careful look” at the JPMorgan incident as they implement the rules.
“I’m very confident that we’re going to be able to make sure those come out as tough and effective as they need to be,” Mr. Geithner said. “And I think this episode helps make the case, frankly.”
At the annual meeting for the investment bank Morgan Stanley, which took place today in upstate New York, CEO James Gorman appeared to allude to the JPMorgan trading loss when he said: “Events of the last few days remind us that risk levels remain high in the global markets.”
He noted twice that Morgan Stanley has jettisoned or is in the process of dumping all of its businesses that do proprietary trading, or trading for the bank’s own profit.
Mr. Gorman also said, unprompted, that the bank maintains the right to take back pay from executives who act improperly. Mr. Gorman was confronted by shouting protesters who said the loss at JPMorgan was proof that banks are out of touch with their customers.
On Monday, Ina Drew, JPMorgan’s chief investment officer and one of the highest-ranking women on Wall Street, left the bank. Ms. Drew oversaw the trading group responsible for the $2 billion loss.
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