Too big to fire
by David Atkins
We already knew that JP Morgan is too big to fail, and its powerful CEO Jame Dimon too big to jail. But now it appears that even after a string of multi-billion dollar losses, Dimon is too big to fire:
Jamie Dimon, the nation’s most powerful banker, can hold onto his title of chairman after JPMorgan Chase’s shareholders decisively defeated a proposal to split the two top jobs.
The vote to split the roles of chairman and chief executive — both of which have been held by Mr. Dimon since 2006 — received only 32.2 percent of shares voted. That is down from a vote of roughly 40 percent in support of a similar proposal last year.
All 11 directors of the bank’s board were also re-elected.
Shares of JPMorgan were up more than 2 percent in midday trading.
The votes were a convincing show of shareholder support for Mr. Dimon and the board even amid persistent questions about the bank’s controls and its dealings with regulators. Those questions have emerged after a multibillion-dollar trading loss in the bank’s chief investment office in London surprised investors last year.
Why did shareholders re-elect him?
The shareholder vote on the proposal for an independent chairman was closely watched and provided some uncomfortable scrutiny of Mr. Dimon’s leadership.
Yet some industry analysts have said that a vote in support of Mr. Dimon was assured by the complexity of JPMorgan Chase. A vote to divest Mr. Dimon of the chairman title might have prompted him to walk away, threatening to disrupt the rosy stream of profits the bank has earned for three years.
So Jamie Dimon uses his connections to assure that the government bails out his business that would otherwise have gone defunct, while continuing to extract enormous rents from the real American economy to enrich himself and his predatory friends. His business is too big and too complex to be allowed to fail, a fact which he uses to his advantage.
And even after enormous losses to the bank are revealed–losses that accrued in large part due to the complexity of the banking system–shareholders are too fond of the ill-gotten gains he provides and too fearful that no one else will understand the overwrought complexity of the business to even consider firing him.
We essentially have a class of totally unaccountable royalty on Wall Street today.
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