Overseers of government worker pension funds pressed JPMorgan Chase & Co. to strip chief executive Jamie Dimon of his additional title of chairman after the London Whale fiasco, renewing a proxy battle the bank won only narrowly last year.
Pension funds, including that of the American Federation of State, County and Municipal Employees (AFSCME), said on Wednesday they filed a shareholder resolution that says the bank would be better run if the chairman and CEO jobs were held by different people.
Backers cited in a statement what they called “mounting investor concerns with the board’s oversight” following more than $6-billion (U.S.) of losses last year from bad derivatives trades linked to a London-based trader – known as the London Whale for his outsized bets.
The group also cited other problems such as the cease-and-desist orders the bank received from regulators last month that require it to improve its internal controls, which Mr. Dimon oversees.
“It is impossible to imagine how board oversight of the company’s affairs will be strengthened while CEO Jamie Dimon leads the very board that is charged with overseeing his own shortcomings,” said Denise L. Nappier, the Connecticut Treasurer who oversees the Connecticut Retirement Plans and Trust Funds, which are part of the group.
Other filers of the proposal include those overseeing the pension assets of New York City teachers, police and firefighters, according to their joint statement.
The issue of splitting the chairman and CEO jobs has become a staple argument of shareholder activists and reformers.
Proponents say having the roles filled by a single person concentrates too much corporate power and can lead to conflicts of interest. Many companies defend the practice, however, saying it can be more efficient and that other measures can assure the board’s independence and oversight.
AFSCME last year filed a similar resolution that won 40 per cent support from JPMorgan shareholders. Later filings showed backers of the resolution included mutual funds sponsored by American Funds, which before had voted with management on a similar resolution.
JPMorgan spokesman Mark Kornblau declined to comment.
Last year the bank argued the split was not necessary because other directors were independent. AFSCME filed, then withdrew, a similar proposal last year at Goldman Sachs Group Inc. after the bank agreed to appoint an independent lead director.
AFSCME last week said it has filed similar proposals this year calling for independent chairs to be named at companies including General Electric Co., Lazard LLC and Wal-Mart Stores Inc.
Another backer of the resolution at JPMorgan this year is Hermes Equity Ownership Services, an adviser owned by BT Pension Scheme, which operates pension funds for British Telecom employees.