One of the great allures of Wall Street is that it is a bottom-line business, or at least it was. Bank share prices tended to follow book value rather hypnotically, and assessing executive performance was based almost solely on metrics. Now, with the financial collapse still fresh in the minds of investors, Wall Street has become more image conscious. There is no greater proof than the fact that shareholders are seriously considering stripping Chief Executive Jamie Dimon of his chairman role.
Sure, you can make the argument that Dimon presided over a firm that suffered through one of the largest and most public trading nightmares in history, and he wasn’t all that transparent in the aftermath. Or you could say that, despite the $6.2 billion charge, J.P. Morgan booked a record year in terms of profit, walking away from the collapse relatively unscathed compared to its rivals. Both are legitimate arguments, but only one follows the dollar signs.
You can also say that Dimon’s regime was responsible for all the red tape in which regulators are currently wrapping the bank. But that’s a reality that won’t change under a different chairman or chief executive. Who’s better suited than Dimon to drag J.P. Morgan out from a regulatory headlock, as he has done previously? A host of numbers-minded chief executives like Warren Buffett have backed Dimon, but today’s final tally will still likely be close.
CalPERS, California’s massive pension fund, said that it will vote to split the two roles. Several other organizations have suggested they will follow suit. J.P. Morgan’s response to the campaign has signaled both its support of Dimon and the vulnerable state of its top man. Unlike the lead-up to last year’s proxy meeting, when 40% of the vote went against Dimon, J.P. Morgan has gone on the offensive, blinding activist shareholders to the tally while reaching out and contacting major shareholders in an effort to grease the wheels. The bank – and the board – is nervous.
Dimon’s saving grace may be the makeup of the bank’s largest investors. The five largest J.P. Morgan shareholders are companies run by CEOs who are also chairmen.
The vast majority of people who work in banking don’t necessarily have a full understanding of the financial instruments that drive the industry. The CFA Institute is out to change all that with their latest program.
White House Counsel Kathryn Ruemmler learned of the IRS targeting scandal in the week of April 22, more than two weeks before President Obama was reportedly notified of the controversy.
Former Senator Judd Gregg has been named the new chief of the Securities Industry and Financial Markets Association (SIFMA), Wall Street’s top lobbying firm. Gregg had been serving as a senior adviser to Goldman Sachs since leaving Washington in 2011.
On Friday, SAC Capital told its clients that it would no longer provide "unconditional" cooperation with the federal government’s insider trading probe. Now we know why. Prosecutors are considering pressing criminal charges. Founder Steven Cohen has been subpoenaed.
U.S. hedge fund Monarch Capital is opening an office in London as it expands its distressed debt trading focus. No word yet on hiring plans.
Seeking to pounce on a wounded competitor, Thomson Reuters and Markit are teaming up to create a rival instant messaging product that would rival that of Bloomberg. The more important news is that Goldman Sachs and Deutsche Bank are backing the effort. Maybe I was wrong.
Buzz Around the Office
A pair of bumbling 20-year-olds found themselves behind bars after butt-dialing a 911 dispatcher while breaking into a car. “This fool really called 911?” one of the suspects said. “Damn.” Indeed.
List of the Day: Recruiter Flubs
If recruiters aren’t calling you back, this may be the reason.