JPMorgan's Dimon keeps job, shareholders support pay packageReported by Proactive Investors on Tuesday, 15 May 2012 (on May 15, 2012)
JPMorgan Chase & Co. (NYSE:JPM) Tuesday held its annual general meeting, where CEO Jamie Dimon was expected to be berated over $2 billion in recent trading losses, and see a vote on his pay package.
Hundreds of shareholders turned out for the meeting and early in the afternoon, reports from Bloomberg confirmed that Dimon received a shareholder endorsement of his pay package and kept his title of chairman of the board, five days after disclosing the trading loss at the bank.
Admittedly, reports have said that most ballots were cast before CEO Jamie Dimon revealed the loss.
Dimon's pay package from last year — $23-million, according to an Associated Press analysis — was non-binding, and reportedly passed with 91 per cent of the vote.
A vote to relieve Dimon of the chairman's title only received 40 percent of the vote.
On May 10, the CEO said in a conference call that the trading strategy leading to the losses was "flawed, complex, poorly reviewed, poorly executed and poorly monitored" and characterized the mistake as "egregious" and "self-inflicted".
On May 11, the company said in a press release that The New York Times had further revealed that United States and British regulators had been in discussions with JPMorgan for almost a month about the trading group suffering the losses.
The company also said that the law firm of Finkelstein Thompson LLP was investigating claims on behalf of J.P. Morgan shareholders regarding the trading strategy and resulting losses.
On Monday, the company reported that Investor Uprising published a column by Marvin Kitman looking at the $2 billion in trading losses.
Kitman, a long-time Investor Uprising contributor and former Newsday columnist, said that as a holder of a Chase bank account, his confidence was "badly shaken" by the revelation that the bank had booked a loss of $2 billion on derivatives trades out of its London office.
Kitman asks why the bank would even consider a trade on European sovereign debt with the entire region in chaos and crisis, something the average citizen could learn by picking up the newspaper.
"Why, even I would know, without going to that school of banking, you'd be better off going to the racetrack than betting on those Eurozone ponies," writes Kitman.
Also on Monday, Ina Drew, the bank's chief investment officer and one of the highest-ranking women on Wall Street, left the bank. Drew oversaw the trading group responsible for the $2-billion loss.
President Barack Obama was quoted as saying that JPMorgan's loss in high-risk trading shows the need for the Wall Street rules that Congress passed two years ago.
Many post-crisis rules governing risk-taking by banks are still being written.
Among them is the so-called Volcker rule, which would block banks from trading for their own profit, a practice known as proprietary trading.
The company also announced on Tuesday that Bernstein Liebhard LLP has launched a securities class action lawsuit on behalf of a class of purchasers of JP Morgan Chase & Co common stock during the period between April 13, 2012 and May 11, 2012.
Plaintiffs are seeking recover damages on behalf of all class members who purchased or otherwise acquired JP Morgan common stock during the aforementioned period.
Despite all the controversy, JP Morgan’s stocks were on the rise on Tuesday afternoon, up almost four percent and trading at $37.22.
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