JPMorgan investors should oust most of board, Glass Lewis says

Buffett, Langone

The bank’s board urged shareholders in March to vote against naming a separate chairman, saying that Dimon’s dual role remains the “most effective leadership model.” He has since drawn public backing from billionaire investor Warren Buffett, who has said he personally holds stock in the bank, and Kenneth Langone, the billionaire founder of Home Depot Inc.

Last year’s losses in the chief investment office were the focus of a probe by the U.S. Senate Permanent Subcommittee on Investigations. The panel said in a March report that the bank dodged regulators and misled investors amid souring bets by trader Bruno Iksil, dubbed the London Whale because his positions were so big. Managers manipulated risk models and pressured traders to overvalue positions in an effort to hide mounting losses, according to the report.

While the bank acknowledged lapses relating to the CIO’s losses, an independent board committee found that mistakes weren’t attributable to the risk committee, Kristin Lemkau, a spokeswoman for the bank, said earlier this week.

Investors would risk shortening Dimon’s tenure if they appoint a separate chairman and their company’s stock may lose its “premium valuation,” Charles Peabody, an analyst at Portales Partners LLC, said last month in a note to clients.

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