"There's no 'we' in 'CEO,'" American International Group ( AIG) 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."
All this vote will really end up achieving then, at best, is the appearance of good corporate governance. At worst, it could backfire and prompt Dimon's exit, which given his track record, will likely hurt the stock. Shares of JPMorgan Chase are up 56% in the one year since it disclosed its biggest trading loss in history, outperforming the S&P 500 and the KBW Bank Index.
There is no doubt that Dimon is a highly influential CEO. His track record in successfully steering JPMorgan Chase through the financial crisis and the fact that the bank has posted record profits three years in a row -- the "London Whale" trading losses notwithstanding -- has earned him a vote on every important matter that affects the financial industry and the economy. That track record allows Dimon to voice his opinions more freely than his peers in the industry would. And because he is known for speaking candidly, his words carry even more weight. The board continues to back Dimon as Chairman and CEO because they do not question his authority when it comes to running JPMorgan. JPMorgan and Dimon's reputation have both been tarnished by the London Whale incident and the continuing political and regulatory scrutiny do not help. The bank continues to be the target of federal investigations on a range of regulatory violations from its handling of foreclosures, to its alleged violation of anti-money laundering rules to its bidding practices in the organized energy markets.
Perhaps JPMorgan Chase and the other big banks really are "too big to manage." But that is a different and more complicated debate, one that deserves a less superficial solution. -- Written by Shanthi Bharatwaj in New York. >Contact by Email. Follow @shavenk