Advisers urge JP Morgan investors to vote to split chair and CEO positions

Investors in JP Morgan have been urged to vote in favour of splitting the role of chief executive and chair at America’s largest bank, amid concerns over the power wielded by its billionaire boss Jamie Dimon.

ISS and Glass Lewis, which issue advice to some of the world’s biggest fund managers on how to vote at annual investor meetings, have thrown their weight behind a shareholder resolution that would ensure two separate people hold the office of chair and chief executive “as soon as possible”. Investors are due to vote on the resolution at the bank’s annual general meeting on 19 May.

Dimon, who is worth an estimated $2.6bn (£1.9bn), has held the dual role for two decades. Holding the two most senior roles in a company is widely frowned upon in corporate governance circles, particularly in Europe, but not banned.

“The size and complexity of JP Morgan suggests that it is difficult for any one person to run both the company and the board,” ISS said in its shareholder report.

“The board is responsible for overseeing management and instilling accountability, and conflicts of interest may arise when one person holds both the chairman and CEO positions, thereby leading both the management team and the board which oversees it,” ISS said. “Effective board oversight may be enhanced by independent leadership.”

Glass Lewis said that an independent chair would be “better able to oversee the executives of the company and set a pro-shareholder agenda.”

The guidance has put the proxy advisers on a collision course with Dimon, who has held the chief executive and chair roles at JP Morgan since 2005 and 2006, respectively.

The two firms have long been in Dimon’s crosshairs. He has accused Glass Lewis and ISS of having too much sway over shareholders, particularly when it comes to social and environmental issues. Dimon – seen as the world’s most powerful banker – has also taken a patriotic stance, highlighting that neither firm is American-owned. Glass Lewis and ISS are owned by Canadian and German firms, respectively.

The battle has also made its way to the White House. Trump in December signed an executive order aimed at reining in Glass Lewis and ISS, which he claimed were using their power “to advance and prioritise radical politically motivated agendas”.

JP Morgan (JPM) has since shunned their use at its asset management arm, which is instead using its own internal AI-powered platform to help decide how to vote at the annual general meetings of companies held in its portfolios, according to the Wall Street Journal.