Jamie Dimon survived a shareholder push that threatened to strip him of his board title at JP Morgan—five days after the bank disclosed a $2 billion trading loss.
Dimon also won a shareholder endorsement of his 2011 pay package, which totaled $23 million.
He told shareholders the company’s mistakes were self-inflicted and added: “The buck always stops with me.”
Most of the shareholder ballots, however, were cast in the weeks before Dimon revealed the trading loss.
His pay package passed with 91% of the vote. The vote to strip him of the chairman’s title won only 40% support, and the bank didn’t announce separate results from before and after the loss.
Dimon was confronted at the meeting by shareholders upset about the trading loss, which has rattled investor confidence in the bank and complicated JPMorgan’s efforts to fight tougher Wall Street oversight.
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Investors have pummeled JPMorgan’s stock price since the loss was revealed. Its stock lost 12% in two trading days and gave up almost $20 billion in market value. It bounced back Tuesday, rising 3%.
The FBI’s New York office is said to be heading an inquiry into the incident “because of the company and the dollar amounts involved here.”. One official characterized the inquiry as preliminary.
“We are aware of the matter and are looking into it,” said a Justice Department official who has been briefed on the probe but was not authorized to speak publicly. “This is a preliminary look at what if anything might have taken place.”
The FBI, Fed, the Securities and Exchange Commission and regulators in Britain are all investigating the loss on trades, which have sunk the bank’s bottom line and its reputation. All will take a close and careful look at the situation, the events leading up to it, and how it will affect the remaining trading rules yet to be implemented.
Due to protestors, there was a heavy police presence at the meeting; with some protestors throwing eggs at a poster with Dimon’s picture.
“We wanted to let [him] know how we feel about what big banks have done to our economy,” says Marilyn Lyday, a member of Occupy Orlando. In response to anger earlier this week, Dimon said he wants a more equitable society and does not mind paying higher taxes. But, attacking all of business is “very counterproductive.”
Dimon did get something of a vote of confidence from President Barack Obama, though.
“JPMorgan is one of the best-managed banks there is,” the president says. “Jamie Dimon, the head of it, is one of the smartest bankers we’ve got, and they still lost $2 billion and counting.”
Obama said the bank was “making bets” in the market for the complex financial instruments known as derivatives. Dimon has said the bank was hedging against financial risk.
In Washington, Treasury Secretary Timothy Geithner said JPMorgan’s trading loss strengthens the case for tougher rules on financial institutions, as regulators continue writing rules from the 2010 law.
Geithner said that the Federal Reserve, the Securities and Exchange Commission and the Obama administration are taking a careful look at the JPMorgan incident as they implement the rules.
“I’m confident that we’re going to be able to make sure those come out as tough and effective as they need to be,” says Geithner. “And this episode helps make the case.”
At the annual meeting for the investment bank Morgan Stanley, James Gorman said, “Events of the last few days remind us that risk levels remain high in the global markets.”
He noted twice that Morgan Stanley has jettisoned or is in the process of dumping all of its businesses that do proprietary trading, or trading for the bank’s own profit. .