City fund backs plan to remove Dimon as chair

Michael Bow
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JP MORGAN is facing renewed pressure from investors, including one of the largest fund managers in the City, to split Jamie Dimon’s role as both chief executive and chairman at the company.

Dimon breaks UK conventions by holding both roles but a consortium of UK and US investors yesterday urged other shareholders to support plans to appoint an independent chair at JPM’s forthcoming annual meeting in May.

In a letter to shareholders, the group said that expecting one individual to do both roles was “unrealistic”.

It added that splitting the role would add credibility with regulators in light of the massive London Whale losses, which cost the bank $5.8bn (£3.79bn)

City outfit Hermes Equity Ownership Services (HEOS), the voting advisory arm of UK money manager Hermes Fund Managers, is among the group guiding the plan.

HEOS executive director Leon Kamhi said the group believed the role of chairman and chief executive should always be separated.

A similar vote at last year’s meeting garnered around 40 per cent support and this year more are expected to vote for the idea. “It’s a non-binding vote so has no legal ramifications but it will put significant pressure on the company,” he told City A.M.

The American Federation of State, County and Municipal Employees and Connecticut Retirement Plans and Trust Funds have helped lead the proposals.

The New York City Pension Fund – a major political player on Wall Street, where JPM is based – is also backing the proposal, with New York mayoral candidate John Liu a signatory to the letter.

JPM said the current set up was the “most effective leadership model”.