JPMorgan Chase [NYSE: JPM] shareholders voted to allow CEO Jamie Dimon to keep his dual role as CEO and chairman of the board of directors, which critics say gives him too much unchecked power over the biggest bank in the U.S. by assets.
About 68.8 percent of the shareholders voted to keep Dimon's existing executive roles. Dimon has been chairman of the board since Dec. 2006 and CEO and president since Dec. 2005. He has been a director since 2000, according to the company.
"The voting showed that a lot of shareholders are upset with recent risk management problems, but aren't sure exactly where to place the blame," said James Sinegal, director of financial services research at Morningstar.
Shares of JPMorgan Chase & Co. were up 1.4 percent to $53.02 at the close of New York trading on Tuesday.
At the company's annual shareholder meeting in Tampa, the outcome was a disappointment to activist investors like the American Federation of State, County, and Municipal Employees union, the State of Connecticut and others who sponsored the proposal to split Dimon's roles.
This isn't the first time a group has tried to split Dimon's roles. Last year, a similar proposal got support from 40 percent of those who voted their shares.
Votes for the other members of the board kept the existing members in place, although Ellen Futter, president and trustee of the American Museum of Natural History, only received 53 percent of votes to support her continued role. She has been a director on JPMorgan's board since 1997.
One of the bank's recent issues is the so-called London Whale trade debacle that resulted in losses of $6 billion for the bank.
"One reason I don't think many changes were made is that there aren't clear answers to a lot of corporate governance questions," Sinegal said of Tuesday's outcome. "It's hard to determine the right mix of leadership skills and technical knowledge on a board, and balance industry expertise with the need for different perspectives. It's also hard to blame the current risk management committee for the bank's troubles without giving them credit for its relatively good performance during the financial crisis."
Sinegal said he was surprised that the proposal to separate Dimon's chairman and CEO roles received less support than last year, but he said he supported the decision.
"Companies like Berkshire Hathaway and Apple have done well with one person in both roles, and it would be difficult to find someone as talented as Dimon to fill the chairman spot," Sinegal said.
Dennis Kelleher, president and CEO of Better Markets Inc., is in the other camp, saying a bank's past positive performance is not sufficient evidence against reforming corporate governance.
"All Wall Street 'too big to fail' banks had record performance before 2008, quarter after quarter and year after year," he said. "Unfortunately for the American people, much of that performance came from high risk and reckless trading that ultimately crashed the global financial system."
Kelleher points to Dimon's admission in April 2012 that the London Whale's trading loss was a "tempest in a teapot" as an example of "pure arrogance before he had the facts." Dimon later explained that he made that comment with the information he had at the time. The next month JPMorgan's chief investment officer Ina Drew announced she was resigning from the company.
With a lack of accountability at JPMorgan, Kelleher said the profits of the bank and shareholders are not the only things at risk.
"What's at stake for the American people is bigger than the profits of JPMorgan. The last financial crisis is going to cost the U.S. more than $12.8 trillion. The next will cost more. We don't need just effective regulation but also effective governance," Kelleher said.