Shareholders led by Connecticut retirement plans and other pension fund organizations unsuccessfully attempted to have the head of JPMorgan removed. Less than one-third of the voters actually supported the measure to have the Chief Executive Officer (CEO) stripped of a great deal of his authority.
At JPMorgan, the same individual holds position as both chairman of the company and the CEO position. The shareholder dispute was designed to prevent this individual from holding both positions. This is the second time that the shareholders have attempted to take such an action, but this time the measure obtained even less support than on the prior occasion.
These sorts of actions are generally brought if shareholders feel that officers or directors have breached their fiduciary duty to the company in some manner. The bank had lost close to $6 billion in recent years due to choices made concerning derivatives purchased by the company. The losses made national headlines as calls were being made to break some of the bigger banks up following the financial meltdown in 2007 and 2008.
However, supporters of the CEO may have been fearful that this executive may have simply left the company if his authority had been diminished. This in turn may have created more adverse publicity for the company than if he was to remain at the helm.
Determining whether such an action should go forward is often dependent upon whether success of such an action will or will not ultimately hurt the company. Shareholders, officers and directors alike often need the advice and counsel of legal authorities and attorneys that not only understand the standards and duties that everyone related to the company need to follow, but also understand the bigger picture of what corporations are attempting to accomplish.
Source: Huffington Post, “Jamie Dimon Survives Shareholder Vote,” by Shahien Nasiripour, May 21, 2013