4. Dimon's Double Duty
Before we start talking about JPMorgan's (JPM) corporate governance crisis, it's worth stating for the record that Dick Fuld held both the titles of CEO and chairman of the board at Lehman Brothers.
Dick Fuld's job as CEO was to manage Lehman Brothers. The board's job was to protect Lehman's shareholders by making sure Dick Fuld was doing his job. Unfortunately, Lehman's board members -- motley, ignorant and negligent crew they were -- relied on Fuld for their direction instead of the reverse.
Lehman, we needn't remind everybody yet still will, declared bankruptcy in September 2008, taking down the entire global economy with it.All right, folks. With all those wonderful memories firmly returned to mind, the floor is open for those burning to make the case that Jamie Dimon should exit the bank's May 21st shareholder meeting holding both titles. Step right up. We're waiting. Talk all you want about how Dimon is unlike Fuld in that Jamie steered his bank away from the financial crisis as opposed to into it. We won't dispute it. Feel free to restate the fact that the company still earned $21.7 billion last year even after the $6.2 billion "London Whale" hit. We concede that point too.
We'll also grant Jamie-backers that Berkshire Hathaway (BRK-B) CEO Warren Buffett believes he should continue to hold the dual role of chairman and CEO. The so-called Oracle of Omaha said at his shareholder meeting this past weekend that he's "100% for Jamie." All three pro-Jamie arguments -- and we're sure there are a ton more -- are very convincing indeed. And for the record, while we agree with the recent recommendations of proxy advisory firms Glass Lewis and ISS Proxy Advisor Services that Dimon relinquish his chairman role, those decisions really don't factor too much into our thinking. You see, those firms have their own agenda. They want the best possible outcome for JPMorgan and its shareholders. We, on the other hand, are worried about the worst case scenario at the 'Too Big to Fail' bank and its impact on everybody else. And no matter how brilliant or compelling an argument one can make on Jamie's behalf, we have a stronger one to rebut it. Put simply: We won't be Fuld again.
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