The KBW Bank Index ( I:BKX) was up slightly to close at 61.53. Heading into JPMorgan Chase's annual shareholder meeting, the big question was whether or not shareholders would approve a proposal to separate James Dimon's dual roles as CEO and chairman of the board of directors. Shareholders rejected the proposal, with only 32.2% in favor, according to the company's preliminary vote count. This was lower than the 40% who voted in favor of a similar proposal at the 2012 annual meeting. The negative vote came despite the support for the measure among proxy advisory firms Glass Lewis and Institutional Shareholder Services.
In a note to clients following the vote, Sterne Agee analyst Todd Hagerman wrote that the measure to split Dimon's roles was "rather convincingly voted down . . . indicating more broad-based support for the current scope of the combined CEO/Chairman role." "Given Jamie Dimon's successful stewardship of JPM, our view is that fewer disruptions to his role ultimately benefits JPM and its shareholders," Hagerman wrote. Now that the flurry over Dimon's continuing role has been settled, "the incremental headline risk associated with a potential management re-shuffling should subside, with an increased investor focus on the company's otherwise solid operating results," according to Hagerman. With a regulatory target on its back in the wake of the "London Whale" hedge trading losses within the firm's Chief Investment Office last year, as well as several other regulatory actions or investigations, JPMorgan Chase continues to trade at a significant discount among the "big six" U.S. banks:
- JPMorgan's shares at Tuesday's close traded for 8.9 times the consensus 2014 earnings estimate of $5.94 a share, among analysts polled by Thomson Reuters.
- Citigroup's (C) shares on Tuesday closed at $ 51.66 and traded for 9.7 times the consensus 2014 EPS estimate of $5.32.
- Morgan Stanley (MS) closed at $25.12 and traded for 9.9 times the consensus 2014 EPS estimate of $2.54.
- Shares of Bank of America (BAC) closed at $13.44 and traded for 10.4 times the consensus 2014 EPS estimate of $1.29.
- Goldman Sachs (GS) closed at $160.73 and traded for 10.5 times the consensus 2014 EPS estimate of $15.27.
- Wells Fargo (WFC) closed at $40.68 and traded for 10.7 times the consensus 2014 EPS estimate of $3.81.
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-- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn