2. Dimon Defeats Dumbest
It wasn't a shocker like "Dewey Defeats Truman," but Jamie Dimon's blowout victory Tuesday sure was surprising considering all the ink spilt over the election.
To be honest, it kind of makes us feel dumb for thinking it was going to be an issue.
Jamie Dimon will get to keep his chairman and CEO titles at JPMorgan Chase (JPM), ending weeks of uncertainty over his future at the country's largest bank. The tally from the bank's annual meeting showed 32.2% of the shareholders voted in favor of a proposal to split the chairman and CEO roles. That is down -- yes, down! -- from 40% the proposal received last year, definitively proving Dimon's threat to walk if he lost the vote was a game-changer. Shares of JPMorgan jumped 1.4% Tuesday to finish at $53.Shareholders also voted to reelect all the board members including the three members of the risk committee -- Honeywell CEO David Cote, James Crown, president of private investment company Henry Crown and Company and Ellen Futter, president of the American Museum of National History. What can we say? Color us wrong. All the dangers highlighted in the endless columns -- including yours dumbly -- about the best possible corporate governance at a bank which holds over $2.3 trillion in assets proved pointless.
London Whale, London Schmale. Too Big to Fail, Too Big to Schmail. The shareholders wanted, and got, their man. But what about us non-shareholders who didn't get a chance to vote? What do we get from Jamie consolidating his power at an organization large enough to bring down the American economy? We already have the unelected Fed Chief Ben Bernanke on the buy side, what's our upside for having an equally omnipotent Jamie Dimon on the sell side? Well, we get succession risk for one. While everybody is having a conniption about who will take over Berkshire Hathaway (BRK-B) when Warren Buffett steps down, that's not our concern at all. He runs an insurance company and owns a lot of stock. Big deal. Jamie, on the other hand, effectively runs a quasi-branch of the U.S. government. If he should fail at both roles -- and we are not saying he will -- then taxpayers will be on the hook for his mistakes, no matter what anybody says about living wills and resolution authorities. That much we learned from Lehman CEO and Chairman Dick Fuld (not to equate the two) during the 2008 bank crisis. And that's why the JPMorgan shareholder vote held larger consequences than hurting Dimon's feelings. "We intend to have a competent and capable successor to Jamie. But we hope that time is much in the future . . . I have no illusions that we would be able to clone Jamie," said lead director Lee Raymond. There you have it fellow Americans. If, heaven forbid, Jamie Dimon gets hit by a bus or eats a bad shrimp, the former CEO of ExxonMobil will be right there to dig into the banks derivative positions until a lesser man than Jamie's clone can assume the position. Sleep tight, folks. And don't forget to say a prayer for Jamie Dimon before bedtime. The future of your retirement is in his hands and that's the only say non-shareholders get.
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