Jamie Dimon, JPMorgan Chase & Co's outspoken chairman and chief executive, won a vote of confidence on Tuesday as shareholders recommended that he keep his chairman title, giving him a greater margin of approval than last year.
Investors who had pressed for Dimon to be stripped of his chairman title said they believed they lost because of the chief executive's hints he would quit if he did not win the vote.
Just 32.2 per cent of shareholder votes were in favor of a proposal to create an independent chairman, compared with 40.1 per cent last year, the bank said at its annual meeting in Tampa, Florida. Dimon smiled as he left the meeting, and the bank's shares rose to their highest level since 2001.
The CEO could not claim total victory. Three JPMorgan directors were re-elected by an unusually slim majority. The three directors were on the board's risk management committee, which is widely seen as having fallen down after the bank lost $6.2 billion from risky derivatives bets last year known as the London Whale trades.
But investors said the bank had worked hard to convince shareholders to vote against the proposal to split the chairman and CEO spot, holding countless meetings with board members and executives.
"The company pulled out all the stops," said Lisa Lindsley, director of capital strategies for the American Federation of State, County and Municipal Employees (AFSCME), one of the shareholders that sponsored the proposal to split the chairman and CEO roles.
When push came to shove, "people were worried Dimon was going to walk," said Leon Kamhi, executive director of Hermes equity ownership services - one of the sponsors of the split chair proposal.
Last year's vote came before most of the $6.2 billion in derivatives trading losses came to light.
Lee Raymond, a former ExxonMobil CEO who now serves as lead independent director on JPMorgan's board, told shareholders before the tally was announced that the episode is not a reason to split the CEO and chairman roles.
"Just the opposite," he said during a question-and-answer session at the meeting. "We don't think this is time for disruption."
Raymond, who is viewed as a counterweight to Dimon on the board, did say that changes were afoot on the board's risk committee but he did not elaborate.
Shares of JPMorgan rose 2 per cent to $53.35, their highest since February 2001.
Among big-bank CEOs, Dimon ranks first for stock returns and has been praised for leading the bank through the financial crisis with a strong balance sheet and no quarterly losses.
"Take a winning football team. One could always ask the question whether the team would have been as effective without the quarterback," said Benjamin Ram, a co-manager of the $1.6 billion Oppenheimer Main Street Select fund.
"The team gets part of the credit, but Jamie Dimon as the leader also gets the credit," Ram added.
Ram's fund has 6.4 per cent of its assets in JPMorgan shares, according to Lipper, a Thomson Reuters company. He declined to comment on how he was voting.
In the run-up to the vote, Institutional Investors Services and Glass Lewis & Co - two proxy advisory firms whose recommendations are often followed by institutional investors - issued reports critical of the board, particularly the members of the risk committee, whose experience they found wanting.
At the time of the London Whale losses, the committee was made up of James Crown, president of a large family investment company; David Cote, the CEO of Honeywell International Inc and Ellen Futter, who heads the American Museum of Natural History in New York. All three remain on the panel, augmented by a fourth member.
Futter, who won only a 53.1 per cent approval from shareholders, did not attend Tuesday's meeting. The Wall Street Journal reported earlier on Tuesday that Futter would likely resign from the board if she won only a slim majority of the votes.