JPMorgan's board takes some power from Dimon

Mon Sep 9, 2013 4:27pm EDT
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By David Henry

(Reuters) - JPMorgan Chase & Co's (JPM.N: Quote) board, under fire for the bank's trading losses and myriad government probes, said on Monday that it was adding two directors and handing more power to its lead independent director, steps that give it extra supervision over Chairman and Chief Executive Jamie Dimon.

Critics said the moves did not go far enough to rein in Dimon, who piloted the bank through the financial crisis but is struggling to improve his relationship with regulators in the aftermath of the meltdown. Dimon has played a key role in selecting board members in the past.

The new directors are Linda Bammann, a bank risk expert who worked for Dimon when she was at Bank One and JPMorgan, and Michael Neal, who until June was the chairman and CEO of General Electric Co's (GE.N: Quote) GE Capital.

The board of the largest U.S. bank said it was giving new powers to its lead independent director, Lee Raymond, including the right to call board meetings at any time and the right to preside over meetings that pertain to Dimon. Previously, Raymond could only call meetings of other independent directors, and only ran meetings when Dimon was absent. Raymond is the former chairman and CEO of ExxonMobil Corp (XOM.N: Quote).

To some investors, Bammann is too close to Dimon, and the bank's steps to bolster the lead independent director role are undermined by the position being held by Raymond, a longtime Dimon backer.

"Bringing in someone who was a former deputy of Jamie Dimon's is absolutely the wrong move," said Michael Pryce-Jones, a spokesman for CtW Investment Group, which had campaigned this year against the re-election of three directors, two of whom have since resigned. Neal, he added, worked for a too-big-to-fail financial company himself, which could make him less likely to challenge Dimon.

"These are just the wrong folks. There are plenty of outside perspectives they could have brought in. Instead, they didn't want to rock the boat."

The bank has for months been fending off shareholder complaints about Dimon's power over the board of directors, as well as the composition of the board. In May, a group of investors tried to strip Dimon of his chairman title, arguing that last year's London Whale trading losses revealed that he needed oversight from a separate chairman.   Continued...

JPMorgan Chase & Co CEO Jamie Dimon gestures as he talks about the state of the global economy at a forum hosted by the Council on Foreign Relations (CFR) in Washington October 10, 2012. REUTERS/Yuri Gripas