Two years ago, when CtW Investment Group demanded JPMorgan Chase & Co. to exclude several members from its corporate board, Michael Pryce-Jones, a senior analyst at the activist shareholder, now claims the effort was a thankless task.
Pryce-Jones goes on, adiing that other investors are expected to meet his group’s proposal with puzzlement, silence or scorn.
“When we tried to do this in 2011, there was zero appetite,” he told reporters. “Everyone was still seeing Jamie Dimon in a positive light. There was a halo around JPMorgan.”
This year, the response to his campaign has been absolutely different, Pryce-Jones added.
“People tell us they’ve actually taken time to look at this board’s composition and they’re dumbstruck,” he said. “People have turned and said to us, ‘We didn’t know it was so bad,’ or, ‘We never realized the board was so inexperienced.’ It’s a regular thing we hear now.”
As The Huffington Post writes, “JPMorgan’s shareholders have become increasingly restless with the bank’s management over the past year, in light of the seemingly unending media and congressional attention to scandals within the institution.”
These activist investors now predict that the current year could bring numerous challenges to the bank’s management which will be finally successful.
They name the bank’s next annual shareholder meeting as an event that could bring start to major changes, including the possibility some directors will be forced to quit or that bank CEO and chairman Jamie Dimon could be made to give up one of his titles.
These activist investors also revealed that the dynamic of the bank is changing. “Our sense is that investors who previously opposed the proposal have been listening this year,” said Michael Garland, assistant New York City comptroller.
Lisa Lindsley, the director of capital strategies at the American Federation of State, County and Municipal Employees, a shareholder who also proposed to split the CEO and chairman roles, said the number of legal and regulatory issues facing JPMorgan have turned the institution into the “Lindsay Lohan of banks.”
“It’s good for shareholders that these stories have come out,” Lindsley said. “There’s been a shift in people’s perception about Jamie Dimon, and how he’s supposedly the only person that can be both chairman and CEO.”
She went on and mentioned an investigation headed by Sen. Carl Levin (D-Mich.) of the bank’s “London Whale” losses that found the federal Office of the Comptroller of the Currency had downgraded its rating of JPMorgan’s management team.
“It’s really a shame that we had to count on Senator Levin to let us know what was going on inside JPMorgan,” Lindsley said, noting that particular fact speaks to wider issues of transparency.
“No one on the outside really knows what’s been going on at the bank,” said Pryce-Jones, the CtW analyst. “Suddenly these things come out and people realize even those on the inside don’t know what’s going on.”