This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

When CEO Is Superhero, Chairman Is Sidekick

Stocks in this article: JPM AAPL AIG

NEW YORK ( TheStreet) -- Shareholder activists calling for an independent chairman at JPMorgan Chase (JPM - Get Report) may be guided by principles of sound corporate governance, but they fail to see the biggest weakness in their case.

So long as Jamie Dimon stays CEO, he will be the boss.

JPMorgan's annual meeting is on Tuesday. Among the various proxy items subject to a shareholder vote is a proposal to split Dimon's dual roles as CEO and chairman of the board of directors.

Press reports suggest Dimon might quit if the vote goes against him. But if he does decide to stay and gives up his chairman title, it will probably make zero difference to how things are run at JPMorgan.

If history is any guide, when you have a strong CEO with a forceful personality, the chairman is often the one toeing the CEO's line and not the other way around.

Strong CEOs often have an overpowering influence on their boards, whether they are chairmen or not.

Steve Jobs was never chairman of Apple (AAPL - Get Report) except for a brief period during his illness. But it was always clear that Jobs called the shots at Apple.

The late Apple co-founder famously hand-picked his board. The company was often criticized by corporate governance experts for having a board that was too cozy with the co-founder and CEO.

But who would have been strong enough to stand up to Jobs' fiery personality and win an argument with him?

And can anyone really argue that that model did not work for Apple? Was anyone successfully able to argue that Jobs be fired because he had too much power? Surely, not the second time.


"There's no 'we' in 'CEO,'" American International Group (AIG - Get Report) CEO Bob Benmosche, told Bloomberg News in a recent interview.

The famously "in-your-face CEO" has a good relationship with AIG current chairman Steve Miller. But he constantly locked horns with former Chairman Harvey Golub, another strong personality, to the point of calling his relationship with Golub "ineffective and unsustainable."

In the end, it was Golub who turned in his resignation, not Benmosche. Golub said in a letter to the board that he was stepping down because "it was easier to replace a chairman than a CEO."

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs