JPMorgan has been sued by the attorneys general of Massachusetts and New York for wrongdoing in connection with assignments of mortgage and the use of the Mortgage Electronic Registration System. It has also been operating under regulatory consent orders related to the mortgage industry's foreclosure settlement with federal regulators. But as the largest U.S. bank holding company operating in the post-crisis environment, following an industry bailout through the Troubled Assets Relief Program, or TARP, it is to be expected that JPMorgan face its share of regulatory and legal hurdles. Does anyone really think the regulatory and political pressure on the company would ease of Dimon were to leave? State attorneys general have nothing to lose and everything to gain, whenever they hold press conferences bashing the big banks. That will continue, as long as possible, whether or not Dimon is at the helm of JPMorgan Chase.
The media has given plenty of clout to proxy advisory firms like Glass Lewis and Institutional Shareholder Services, who have both advised shareholders to vote to split JPMorgan's CEO and chairman roles. Those firms have conveniently jumped on the anti-Dimon bandwagon, saying that having a chairman to watch over a CEO would equal better corporate governance.
It's also interesting to look at JPMorgan's stock performance under Dimon, as it compares to its peers among the largest U.S. banks. Dimon took over as JPMorgan Chase CEO in January 2006. From the end of 2005 through Monday's market close at $52.29, JPMorgan's shares returned 58%. Here's how stocks of the remaining "big six" U.S. banks fared over the same period, ranked from the worst return to the best:
- Shares of Citigroup (C) closed at $51.60 Monday, for a negative return of 88% since the end of 2005.
- Bank of America (BAC) closed at $13.51, for a negative return of 65% since the end of 2005.
- Morgan Stanley (MS) closed at $25.07, for a negative total return of 40% since the end of 2005.
- Goldman Sachs (GS) closed at $158.90, for a positive total return of 34% since the end of 2005.
- Wells Fargo (WFC) closed at $40.20, for a positive return of 56% since the end of 2005.
- JPMorgan's shares at Monday's close traded for 8.8 times the consensus 2014 earnings estimate of $5.94 a share, among analysts polled by Thomson Reuters.
- Citigroup's shares traded for 9.7 times the consensus 2014 EPS estimate of $5.32.
- Morgan Stanley traded for 9.9 times the consensus 2014 EPS estimate of $2.54.
- Goldman Sachs was trading for 10.4 times the consensus 2014 EPS estimate of $15.27.
- Bank of America traded for 10.5 times the consensus 2014 EPS estimate of $1.29.
- Wells Fargo traded for 10.6 times the consensus 2014 EPS estimate of $3.81.
Interested in more on JPMorgan Chase? See TheStreet Ratings' report card for this stock.
-- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn