Q: What do Warren Buffett, Rupert Murdoch, Mayor Michael Bloomberg, former Treasury secretary Hank Paulson, venture capitalist Marc Andreessen, and Home Depot co-founder Ken Langone have in common? (Besides being rich white men, that is.)
A: All of them joined Jamie Dimon in battle as the JPMorgan Chase CEO fought to keep his job as the bank's board chairman.
Corporate governance isn't usually a sexy topic. But as JPMorgan held its annual meeting in Tampa today, all of Wall Street was watching one specific governance proposal on the ballot — a nonbinding resolution that would have split the bank's CEO and board chairman roles. If the proposal had been passed by shareholders and adopted by the board, Dimon would have been stripped of half of his powers, effectively dealing him a no-confidence vote after a year of regulatory problems and investigations stemming from the London Whale trading losses.
The threat of having Dimon taken down a peg — and potentially having him quit altogether in protest — was enough to send JPMorgan into a furious behind-the-scenes lobbying effort to keep the popular CEO in power. The bank's countercampaign worked: Only 32 percent of the bank's shareholders voted to split the roles, fewer than had voted for a similar proposal last year.
That will come as a relief to the bank, which has spent hundreds if not thousands of man-hours trying to keep Dimon in his seat.
"It was very much an effort across the bank," one person familiar with JPMorgan Chase's lobbying efforts told Daily Intelligencer, adding that "Jamie was not the one making calls on this."
The quest to keep Dimon in his chairman spot began in earnest several weeks ago, when advisory firms Glass-Lewis and ISS, which advise shareholders on how to vote, came out in favor of splitting the CEO and chairman roles. Pension funds like CalPERS soon joined in the call to deprive Dimon of his chairmanship, and eventually, the bank felt it was in danger of losing the battle. Matters got worse when Dimon reportedly suggested he would consider leaving the bank if his roles were split. The threat was too much for JPMorgan to contemplate, and the all-out lobbying blitz began.
The effort to keep Dimon looked more like a presidential campaign than a normal lobbying effort. Executives divided and conquered: Joe Evangelisti and Kristin Lemkau, two of JPMorgan's top spokespeople, contacted reporters and influential columnists and got messages of support placed in visible spots like Politico's "Morning Money" newsletter; William Daley, a former JPMorgan Chase executive and President Obama's former chief of staff, was tasked with reaching out to union leaders; Sarah Youngwood, the bank's investor relations head, and Marianna Lake, the bank's CFO, were dispatched to make nice with large shareholders and pension funds; and bank executives including Jimmy Lee, the bank's top deal-maker, called top corporate leaders to urge them to support Dimon in their public appearances.
"It became a media battle," the person close to JPMorgan's efforts said. "And then people started coming and saying, 'How can I help?'"
The charm campaign worked, as CEOs and corporate chieftains turned out in droves. TV airwaves filled with gushing hosannas to Dimon's leadership ability, boasts about JPMorgan's record profits last year, and dire warnings about what a Dimon-less JPMorgan might look like. Ken Langone had a fit on Bloomberg TV, saying he was "terrified" of what would happen to the bank if Dimon were to step down. Marc Andreessen called Dimon "one of the great all-time CEOs in the financial services industry." And last week, Rupert Murdoch tweeted, "JPMorgan would be up a creek without Jamie Dimon as Chairman. One of the smartest, toughest guys around. Didn't bend when times got hard."
The business media matched the Dimon backers' enthusiasm with its own. Bloomberg Businessweek put Dimon on its cover and quoted many of his fans in the corporate elite. And Francesco Guerrera, the Wall Street Journal's Money & Investing editor, gave his reporters a direct order two weeks before JPMorgan's shareholder meeting, according to a source: Every day until the meeting, a new JPMorgan story had to be in the paper. (Guerrera says it was "not true" that he had ordered the wall-to-wall coverage.)
Part of the interest around Dimon's potential demotion was due to the raft of corporate governance questions that have arisen since the London Whale episode, which dealt a black eye to Dimon's reputation as a keen risk manager and raised questions about how effectively he could oversee both the bank's day-to-day operations as well as the strategic matters of a board chairman. Felix Salmon, Justin Fox, and a number of JPMorgan shareholders have asked whether Dimon, no matter how talented a CEO, could use better oversight.
All of this raises one crucial question: Who cares? After all, the shareholder vote, even if passed, wouldn't have been binding. And even if the board had decided to strip him of his chairmanship, Dimon would still have remained CEO of one of the world's biggest banks.
The clearest explanation for the massive interest in this story line is probably that today's vote was the last chance to dent Jamie Dimon's armor, after a year in which his behavior has at times been erratic and his leadership skills questionable. That the effort to unseat him failed overwhelmingly, after a media campaign that mobilized many of the world's richest and most powerful men in his support, is a testament to how thick that armor really is. No matter what happens, it seems that as long as Jamie Dimon is making money for JPMorgan, he can get away with basically anything.
"I love coming to work here every day," Dimon wrote in an employee memo after the votes were tallied, "and hope to be doing it for years to come."