The movement to force JP Morgan Chairman and CEO James Dimon to step down from the chairman job and serve as a mere CEO failed today, as shareholders rejected a proposal to split the jobs. In fact, with job-splitters garnering just 30-something percent of the vote they’re actually losing ground from where they were a year ago, which is surprising because they seemed to be gaining momentum with shareholder advisory firms. Dimon was able to push back by deploying a highly effective tactic that just happens to illustrate precisely why he shouldn’t hold both jobs: He threatened to quit.
He said that if he was forced to step down as chairman he would step down as CEO as well. And shareholders thought, not implausibly, that doing so would throw the firm into disarray and hurt its share price. So they stuck with Dimon.
That’s the kind of high-stakes bluffing and gamesmanship you don’t like to see from a banker. It also only makes sense if you assume that Jamie Dimon the Chairman is doing a terrible job. After all, any CEO might quit at any moment. Running a company is hard work, and CEOs are so rich already that it’s hard to use a pure financial incentive to get one to hang on if he decides he’d rather play golf. Plus any CEO might die in a car wreck on any given day. One of the very most important jobs a chairman can do is ensure that there’s some kind of reasonable succession plan in the works. Someone waiting in the wings who’ll have the confidence of the board and the executive team and who’ll be able to keep things running smoothly. There’s no such thing as a totally seamless transition, but it’s certainly possible to have a non-catastrophic one. Dimon held on to the Chairmanship by essentially saying he’d failed as Chairman. There is no succession plan beyond “après moi, le deluge.”